- Author: Ria DeBiase, Communications Director, Giannini Foundation of Agricultural Economics
The Prop. 12 pork panic is overblown, say UC agricultural economists, but so are the new law's benefits to hogs
California's Proposition 12 will soon require farms to add space for certain farm animals, including breeding pigs, or mother sows. As the January 2022 date for full implementation of Prop. 12 approaches, some pundits warn of upcoming bacon shortages and up to 60% higher pork prices, while others downplay any negative effects on Californians.
What are the real impacts of Prop. 12, which was approved by California voters in 2018?
UC Davis economists estimate that California pork consumers will lose $320 million per year (roughly $8 per person) from the market impacts of Prop. 12. California consumers will pay about 8% more for pork regulated under Prop. 12 and will consume around 6% less of that pork per year.
Co-author Richard Sexton, UC Davis distinguished professor of agricultural and resource economics, noted, “The roughly 9% of North American sows affected will each get about 20% more housing space. But, the additional space will be for those sows that already have more space, not those confined in small individual stalls.”
California's Prop. 12 is now set to be implemented as planned following the 9th Circuit Court's recent rejection of legal challenges. Republican senators from Iowa have proposed federal legislation to stop implementation of Prop. 12, fearing economic damage to their hog farmers, but federal action is unlikely. Meanwhile, Prop. 12 supporters claim that the new regulations will give more space to sows confined to stalls so small that they can't turn around.
Prop. 12 requires each sow whose piglets are raised for uncooked cuts of pork sold in California – about 9% of North American sows – to have a minimum of 24 square feet of space. Because Prop. 12 applies only to sows, not to their offspring who are raised for meat, it will apply to well less than 1% of the 90 million North American hogs.
Around 30% of North American sows are already in group housing with 20 square feet each, rather than confined in stalls. The high cost of converting stalls means that the California pork supply will come from sows already in group housing. “Thus,” said Sexton, “the California Prop. 12 regulations will not help those sows confined in stalls to gain more space and mobility.”
The added costs of 20% more space for group-housed sows that are transitioned to comply with Prop. 12 – plus the costs of segregation, product tracing and new labeling – will cause the cost of regulated pork products in California to rise by about $0.25 per pound. The UC Davis research also indicates almost no change in the prices of pork products sold outside of California.
To learn more about the coming impact of Prop. 12 on California consumers and the North American pork supply chain, read the full article by Ph.D. candidateHanbin Lee, Sexton and distinguished professor Daniel A. Sumner, all in the UC Davis Department of Agricultural and Resource Economics: “Voter-Approved Proposition to Raise California Pork Prices.” ARE Update 24(6): 5–8. UC Giannini Foundation of Agricultural Economics: https://giannini.ucop.edu/filer/file/1629132628/20134.
ARE Update is a bimonthly magazine published by the Giannini Foundation of Agricultural Economics to educate policymakers and agribusiness professionals about new research or analysis of important topics in agricultural and resource economics. Articles are written by Giannini Foundation members, including University of California faculty and Cooperative Extension specialists in agricultural and resource economics, and university graduate students. Learn more about the Giannini Foundation and its publications at https://giannini.ucop.edu.
- Author: Jeannette E. Warnert
Proposition 12, a measure on California's Nov. 6 ballot, builds on the successful ballot measure Prop. 2, which 10 years ago required veal calves, breeding pigs and egg-laying hens to be kept on farms that allowed them to turn around freely, lie down, stand up and extend their limbs, reported Paul Rogers in the Mercury News.
However, CDFA issued guidelines that said chickens could still be kept in cages and be in compliance with the law. That prompted sponsors - including the Humane Society, the American Society for the Prevention of Cruelty to Animals and other groups - to propose Prop 12, which will tighten the law. If passed by a simple majority, the new proposition would require 43 square feet of space for each calf raised for veal by 2020, 24 square feet for each breeding pig by 2022 and one square foot per hen by 2020, with all egg-laying hens required to be cage-free by 2022 — in other words, allowed to roam around a barn or large coop. Farmers from other states would also have to comply with these dimensions to sell their products in California.
Since Prop 2 went into effect, egg prices increased by 9 percent. California is also producing fewer eggs. In 2007, 5.3 billion eggs were laid by California chickens, with a value of $346 million. By 2015, California chickens laid 3.5 billion eggs with a value of $210 million.
Some of the decline would have happened anyway, said economist Daniel Sumner, director of UC Agriculture and Natural Resources' Agricultural Issue Center.
“The egg industry has been declining for decades in California,” Sumner said. “Raising eggs is about converting corn and soybeans to eggs. It's expensive to haul corn and soybeans around. And we don't grow corn and soybeans in California.”
But Sumner predicted if Prop 12 passes, it will raise the price of some types of eggs, perhaps by as much as 50 percent, and the price of veal and pork by about 20 percent.
“People spend 50 to 100 dollars a year on eggs,” Sumner told reporter Lesley McClurg of KQED. “It'll go up to $100 to $150.”
Though another factor could also be at play in egg prices: an uncertain future.
“The concern for the people investing in these new standards is that it's not at all clear that they're going to last very long,” says Sumner.