PROP 12 WILL LEAD TO INCREASED FOOD PRICES FOR CALIFORNIA RESIDENTS

In 2018, California likely will vote on a ballot initiative (Prop 12) that, if successful, would require specific food products sold in the state to be produced without the use of gestation stalls for sows (pork) as well as mandating a considerable increase in the space allotted for laying hens (eggs). This proposal, led by out-of-state activist groups, will have unintended and negative consequences for the people of California.

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Learnings from Similar Measures Illustrate the Negative Effect on Egg Prices

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If implemented, this ballot initiative will significantly raise retail prices for eggs sold to California consumers, due in large part to the increased costs of production in cage-free housing environments.

• In California, a law became effective on January 1, 2015, that mandated additional space for laying hens. Independent analysis (Kaiser, 2016, Cornell) found that retail prices in California increased by $0.49 per dozen, or almost 18 percent, as a result of this new law.

• Using the same data from California, models developed indicate Massachusetts consumers, who passed a similar bill in 2017, overall could face a minimum total increase of $95 million, in the first year, to purchase the same volume of eggs as is currently purchased statewide.

• The average family of five in California is spending almost $70 more per family, per year, on eggs.

• This increase in egg prices was 13.5 times higher than the inflation rate for all food and 35 times higher than the overall inflation rate.

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Vulnerable Families will be Adversely Affected

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Passage of this ballot initiative and the related increase in the cost of eggs and pork will most significantly impact the households in California who rely on assistance from the WIC and/or SNAP programs to feed their families nutritious, high-quality protein each day.

• The measure, if passed, will adversely affect lower-income earners in a disproportionate manner, as these families are more likely to reside in urban areas where food prices would be higher than the state average.

• Data gathered by CNN (2015) from the federal Bureau of Labor Statistics reports poor families spend a disproportionately high percentage of incomes on food – 28 percent – with nutritious, high-protein foods like meat, eggs, fresh fruits and vegetables the most costly.

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There will be a Parallel Increase in Pork Prices

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California consumers will likely experience an increase in pork prices should the ballot initiative pass. This is likely to occur because California imports much of its pork products (such as bacon, sausage and ham) from across the United States, where a significant majority of pork is produced using conventional production methods that are not required to comply with such regulations as proposed in this ballot initiative.

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• The analysis, (Kaiser,2016, Cornell) pointed to Lusk’s (2014) estimates that per capita pork expenditures are about 2.2 times higher than egg expenditures.

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Uniform Solutions are Appropriate and Necessary

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Egg producers nationwide are facing a patchwork of varying state laws related to hen housing, and many are already transitioning to cage-free housing alternatives.

A number of states (California, Washington, Oregon, Michigan, as well as repeated attempts in Connecticut) have similar laws, but with different implementation timelines and space requirements, as they relate to egg production and egg sales in those states.

Further, this ballot initiative is unnecessary, and it will only serve to complicate the current environment, where the market already is determining the path forward.

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CPPA POSITION: The California Pork Producers Association (CPPA) opposes Prop 12 the Prevention of Cruelty to Farm Animals Act.

CPPA opposes all forms of regulation without representation and this fits the bill. Livestock production practices should be left to those who are most informed about animal care — farmers — and not animal rights activists. Additionally, changes in housing systems, which come with significant costs that increase food prices, should be driven by consumer purchasing decisions, not the agenda of any activist group.

IMPORTANCE: Through ballot initiatives or legislation, California is growing increasingly aggressive in banning the sale of out-of-state goods made from production practices that don’t meet its criteria. These unscientific mandates attempt to dictate how producers – who had no say or representation in their adoption – run their operations and care for their animals. Pork producers must be allowed to use housing systems and other production methods that work best for their operations and their animals, and producers in one state should not be told how to raise and care for their animals by the lawmakers, regulators or citizens in another state – especially when they have little or no knowledge of the industry.

Producers make housing decisions thoughtfully based on pig behavior, genetics, daily health care needs and life stage. It is crucial that producers maintain the ability to choose housing systems that work best for their pigs and farms. Gestation stalls keep sows healthy and safe and support housing practices endorsed by the American Veterinary Medical Association (AVMA) that:

• minimize aggression and competition between sows

• protect sows from detrimental effects associated with environmental extremes, particularly temperature extremes

• reduce exposure to hazards that result in injuries

• provides every animal with daily access to appropriate food and water

• facilitates observation of individual sow health needs

BACKGROUND: U.S. pork producers today provide 25 billion pounds of safe, wholesome and nutritious meat protein to consumers worldwide, creating $39 billion of gross national product and 547,800 U.S. jobs. Critical to the pork industry’s success is a producer’s ability to choose the production method that maximizes productivity, increases sustainability, reduces disease exposure and improves the health and welfare of his or her animals. This freedom has been jeopardized by recent state prohibitions on scientifically-sound production methods.

Since the early 2000s, animal rights groups have attacked the production methods of U.S. pork producers by championing state ballot initiatives that seek to ban those production practices. As a result, nine states have banned production practices used widely throughout the pork industry. California and Massachusetts have gone a step further by prohibiting the sale of pork produced using certain production methods, even when produced in states other than California and Massachusetts. These state mandates – without any scientific justification or benefit to the states or its citizens – are dictating how producers in other states raise their animals.

This patchwork of mandates will inevitably raise food costs while reducing consumer choice. This is meaningful to all households given continued cost of living increases in California, especially for low-income households.

• Brian Buhr, professor in applied economics at the University of Minnesota, in a May 2010 study estimated the cost for the U.S. pork industry to comply with these state mandates to be between almost $1.9 billion to more than $3.2 billion, resulting in a $5 billion cost to consumers.

• There is a significant cost when changing from one housing system to another. Those costs are passed on to the consumer in the form of higher food prices. A January 2016 study conducted by Harry Kaiser, the Gellert Family Professor of Applied Economics and Management at Cornell University, found that California’s ban on laying hen battery cages and on selling eggs from out-of-state hens housed in such cages resulted in a 49- cent per dozen increase in egg prices, which disproportionately affected the most vulnerable and poorest households in the state.

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CPPA CONTACT: Erica Sanko, Executive Director, erica@calpork.com, 916-447-8950

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Click here to read the proposed Prop 12 initiative.