When free markets hits the frying pan, consumers often get burned

On November 6, 2018, 12 million Californians voted by a 63-37% majority to introduce minimum welfare standards for livestock and poultry products — primarily eggs, pork and veal — sold in the nation’s most populous state.

The initiative, dubbed Proposition 12, was a strong endorsement of two previous actions (one by voters in 2008, the other by the state legislature in 2010) on California’s animal welfare standards. Their collective effect was to ban California companies from selling “eggs and uncooked pork and veal” from “animals raised in a manner” that did not meet the new state standards.

These standards were essentially no battery cages for laying hens and no gestation cages for sows. The battery cage law, in place since 2008, is widely accepted, and almost every egg sold in the state comes from a cage-free hen.

However, the pregnancy cage law has spent most of its four-year existence in federal courts. According to the American Farm Bureau Federation and the National Pork Producers Council, what matters is the law’s “effectiveness” to control commercial behavior beyond California’s borders,” explains the August 24 Agri-Pulse newsletter.

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That means, the two groups claim, that every hog farmer in America must obey California law if they want to sell pork in the Golden State.

While that sounds like a logical economic argument, no federal court has considered it a valid legal argument. The anti-Prop-12 plaintiffs lost every hearing and every appeal, including their most recent one, in June 2021 when the US Supreme Court declined to review the lower court’s decision.

So no Supreme Court hearing, case closed, right? Not exactly.

In late March 2022, the Supreme Court agreed to hear arguments on a petition by the AFBF and NPPC regarding the constitutionality of California law. (The hearing is scheduled for October.) The move jeopardizes Prop 12’s current legal standing and freezes its already-delayed implementation.

The Supreme Court complaint pleased the AFBF and NPPC. Farm Bureau President Zippy Duvall said he was “pleased” with the court’s move because “a state’s misguided law should not dictate farming practices for an entire nation.”

But does California’s Prop 12 actually “dictate” how every American pig farmer must raise pigs? After all, California accounts for just 13% of the US pork market.

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Hog farmers who have made changes to their production system to accommodate Prop 12 recently told the Associated Press (AP) that they don’t believe it. In fact, two hog farmers cited in the September story — one from Ohio and the other from Illinois — see the law as a market-creating opportunity for them to “fetch premium prices by selling specialty hogs” in the California market.

And neither is a small business owner: The Ohio farmer keeps “a herd of about 1,500 sows,” according to the AP, and the Illinois farmer “raises about 40,000” animals a year.

As such, these for-profit agricultural entrepreneurs who have invested heavily to shift their production to higher-value markets — just as agricultural groups, land grant universities and lenders have been pushing for years — now see agricultural leaders undermining their efforts through federal courts.

“Every industry has to make changes to adapt to what consumers want, whether it’s the market or legislation,” the Illinois farmer told AP. “Most would prefer the marketplace, but they” — 12 million Californians — “voted on it, so someone has to fill that consumer need.”

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Well, no, responds the nation’s largest farm group, AFBF, and its largest hog group, NPPC, both of which claim to represent family farms. “If consumers really wanted that,” an NPPC advocate told the AP, “they would buy pork chops for $15 or $25 a pound, but they don’t.”

If you follow this attorney’s logic—rather than the law, his specialty—the NPPC and AFBF are simply saving Californians from the costly mistake of caring about where their food comes from. Killing a profitable new opportunity for farmers everywhere is just collateral damage.

Which, coincidentally, also protects Big Ag’s entrenched position in the industrial red meat markets, the prime beneficiary of any Supreme Court victory.

The Farm and Food File is published weekly in the US and Canada. Source material and contact information will be posted on farmandfoodfile.com.