How Will You be Affected by Proposition 12?
Jacquelyn Babcock, Director
FACTA LLC
Animal Welfare, Assurance, Certification and Training
Since its passage by voters in 2018, California’s Proposition 12 has clouded the skies for pork, veal and egg producers like a distant storm – threatening, but far enough away to hope it would turn in another direction.
On May 11, 2023, the last hope for a sideways turn was dashed when the U.S. Supreme Court rejected a challenge by the National Pork Producers Council, which argued that Prop. 12 violated the U.S. Constitution’s Commerce Clause. A 5-4 majority of the Court upheld the California law, with Justice Neil Gorsuch writing, “Companies that choose to sell products in various states must normally comply with the laws of those various states. While the Constitution addresses many weighty issues, the type of pork chops California merchants may sell is not on that list."
The Court’s decision paved the way for the first deadline that pork, veal, and egg producers must meet to take effect on July 1, 2023. Producers selling affected meat and eggs must only sell products in California that meet the standards set by Prop. 12. The next deadline – January 1, 2024 – will require producers to provide the State of California with audited animal welfare statements certifying their compliance.
What Prop. 12 Does
Prop. 12 prohibits the sale of veal, pork, and poultry eggs if the animals from which the products came – or the sows or laying hens – were confined to cages, pens, or areas below minimum square footage requirements defined by the law.
Specifically, calves raised for veal must have at least 43 square feet of usable floor space per calf, and egg-laying hens (chickens, turkeys, ducks, geese, and guinea fowl) must be kept in areas with at least 1 square foot of usable floor space per hen. In addition, hens must have perch space, nest boxes, and dust bathing space. Breeding pigs must have at least 24 square feet of usable floor space per pig.
Additionally, Prop. 12 requires producers to keep two years of records that back up their compliance and certification.
While several states – including California – have enacted laws in recent years governing how animals are treated on farms within their own borders, Prop. 12 is the first law that places restrictions on the meat that is sold in the state regardless of where the animals are raised.
Given the size of the California market, the financial impact on the pork, veal, and poultry industries nationwide will be dramatic, and some producers who don’t sell much product in California may find it more economically sound to withdraw from the state altogether.
Impact on the Pork Industry
Less than 1% of the pork consumed in California is produced in the state. Yet, Californians consume about 15% of the pork sold in the U.S. Consequently, the impact of Prop. 12 on pork producers will fall almost entirely on producers in other states, particularly Iowa, the largest hog-producing state in the nation. Currently, less than 4% of pork produced outside California would meet Prop. 12 requirements.
If they haven’t done so already, pork producers who want to continue selling in California will have to make significant financial investments in their facilities. The cost of switching from conventional production to Prop. 12-compliant production is estimated at $3,500 per sow. The average hog farm has about 2,500 sows, adding up to a total cost of $8.7 million.
Moreover, the annual animal welfare audit required by the law will add to the costs.
Impact on the Poultry Industry
The impact on the poultry industry may be less significant because the marketplace has moved toward more cage-free egg production in recent years, as some grocery and restaurant chains have demanded cage-free eggs and consumers have shown a willingness to pay for them.
Approximately 33% of eggs produced in the U.S. already come from cage-free production facilities, which will automatically meet the California standards. However, Prop. 12 does add record-keeping requirements that will come with a cost.
For the remaining producers whose birds are still in cages, Prop. 12 will roughly double the size requirements compared to caged hens. Moreover, if a poultry farm has multiple barns and one of them isn’t compliant, no eggs from that farm may be sold in California unless the facility has the ability to segregate those eggs and keeps detailed records of which eggs were produced as California compliant.
In addition to the space requirements for the birds, Prop. 12 also requires that workers must be able to stand up while performing their duties.
Impact on the Veal Industry
In the veal industry, each calf must have at least 43 square feet of space, which is roughly double the size of the hutches veal calves are currently raised in, if not provided additional space outside.
Like pork and egg producers, veal producers who want to continue selling in California will incur costs for enlarged facilities, as well as the annual animal welfare audit required to be Prop. 12-certified.
Impact on Consumers and Future Outlook
The costs incurred by pork, veal, and egg producers to comply with Prop. 12 will certainly be passed on to consumers. At this point it’s difficult to determine how much prices will increase and how producers will apply the increases. Once the meat and eggs hit the distribution phase of production, they will be labeled as “California Prop. 12 Certified,” ensuring that only certified products enter the state.
For the future, the Supreme Court ruling upholding Prop. 12 will almost certainly embolden animal welfare advocates to place similar measures on other states’ ballots, or lobby for legislation. Currently, 10 states do not allow gestation crates for sows, but only for those raised within their borders.
Fighting Misinformation
There is a significant amount of misinformation in the marketplace about Prop. 12, and producers should look towards knowledgeable and qualified individuals to clarify many of the questions that veal, pork, and egg producers have. Auditing companies should be working with the California Department of Food and Agriculture to ensure compliance with Prop. 12 and the least stressful transition possible.
If you are concerned about how Prop. 12 may affect you or need auditing services, contact us to start the conversation.