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Big Pork Says Animal Welfare Rule Breeds Monopoly; Small Farmers Disagree

Earlier this spring, the Supreme Court agreed to hear a petition challenging Proposition 12, a California ballot initiative that would require all farmers selling pork in the Golden State to provide their breeding sows with more space.

In their petition [[link removed]], the National Pork Producers Council and the American Farm Bureau Federation argue that Proposition 12 unconstitutionally restricts interstate commerce. The groups also allege that smaller hog producers will not be able to afford upgrades to comply with Proposition 12 and that this will drive them out of business and lead to more consolidation in the industry. But an amicus brief [[link removed]] filed this week by a group of independent hog farmers and farmers’ advocates argues the opposite, claiming Big Pork is disingenuously speaking on their behalf.

Several state farmers unions, the Socially Responsible Agriculture Project, and the American Grassfed Association, among other organizations and businesses, argue that Proposition 12 creates a marketing opportunity for small-scale hog farmers who will be better able to meet higher animal welfare standards than dominant vertically-integrated pork companies that confine breeding sows.

The Supreme Court’s decision won’t just impact hog farmers or California pork consumers. It has implications for the ability of all states to regulate how the food consumed in their state is produced and processed

Currently, more than 70% of U.S. farmers that breed piglets keep their sows in gestation crates [[link removed]] for most of their lives. These pens are so small that sows don’t have space to turn around. Similarly, many egg-laying hens in the U.S. live in cages that are smaller than a sheet of paper [[link removed]].

In 2018, 62% [[link removed](2018)] of Californians voted to approve Proposition 12 which banned caged animal products in their state. The ballot initiative mandated that any farms selling veal, eggs, or pork in California must allow more space for their veal calves, pregnant pigs, and egg-laying hens.

Only 5% of all U.S. farm animals are raised under verified humane certifications banning caging and crowding despite 78% of U.S. consumers having concerns about animal welfare according to a 2017 ASPCA study [[link removed]].

Prop. 12 has already gone into effect [[link removed]] in California for veal and egg producers, but legal challenges and injunctions continue to delay implementation in the pork industry. The National Pork Producers Council (NPPC) and the American Farm Bureau Federation allege [[link removed]] that Proposition 12 is unconstitutional because it violates the dormant commerce clause, a legal doctrine that bans state protectionism (specifically, any state law that “unduly” burdens interstate business) based on Congress’s constitutional authority to regulate interstate commerce.

California buys roughly 13% of all U.S. pork and imports almost all of it from other states. The NPPC and Farm Bureau argue that Prop. 12 thus regulates hog production outside California and could effectively force the whole U.S. pork industry to change its practices. The petition says that getting rid of sow confinements will force hog farmers to make costly upgrades and raise fewer sows in the same amount of space, driving down productivity and raising consumer prices. Compliance and verification costs will force out the smallest hog farmers and increase industry consolidation, the petition argues.

However, a legal brief [[link removed]] from another group of pork producers and farmers’ advocates submitted to the Court on Monday argues precisely the opposite. Pork production is closely controlled by a few dominant companies, represented by the NPPC, that corner access to major supermarket shelves and restaurant chains, the brief says. Dominant processors, or integrators, directly own or control key steps along the pork production supply chain and farmers that want to sell to them must follow their terms, which include raising company-approved piglets from crated sows. “Integrators have essentially eliminated any ability of independent farmers to compete on quality or through innovation,” the brief says.

But Proposition 12 changes this dynamic, they argue. California’s higher welfare standards create a rare market opportunity for independent hog producers to meet consumer demand for higher animal welfare products that dominant pork processors aren’t. Smaller farms that already comply with Proposition 12 or early crate-free adopters will have an opening to expand their market share and challenge industry leaders. “Where independent farmers struggled to meet demand [for humanely raised pork] because of barriers to entry in the consolidated pork and wholesale food industries, they now have a better chance to compete,” the brief argues.

The brief also argues that Proposition 12 does not unduly restrict interstate commerce; rather, it outlaws dominant pork companies’ preferred and more profitable method of production in Californian markets, which previous courts have said voters and state legislators have a right to regulate. As for claims that the regulation will increase pork prices or cause shortages, the brief says this is a hypothetical policy outcome for lawmakers to address, not the courts. Further, the brief argues that corporate consolidation already harms consumers, as dominant pork producers have been accused of conspiring [[link removed]] to raise prices [[link removed]] and lying about pork shortages [[link removed]] during the pandemic to reap record profits.

Beyond the outcomes for animal welfare and pork markets, the Supreme Court’s decision on Proposition 12 could have broader implications for future state-level agriculture policy. Most immediately, the petition halted the implementation [[link removed]] of a similar ballot initiative in Massachusetts. But more fundamentally, if the court sides with industry, communities could face barriers to raising standards for food sold in their state, such as environmental impact standards.

“If the petition goes through and [Prop. 12] is seen as unconstitutional, then it basically says that the industry is too large to govern,” said Sherri Dugger, executive director of the Socially Responsible Agriculture Project. “To me, this petition is the National Pork Producers Council saying that consumers’ voices don’t matter.”

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What We're Reading

The Inflation Reduction Act (IRA) repeals and replaces part of the American Rescue Plan Act that created a debt relief fund for farmers of color, disappointing Black farmers seeking restitution for discrimination by USDA. ( Harvest Public Media [[link removed]])

The IRA also offers new incentives for farmers to build digesters that capture manure-related greenhouse gas emissions, but critics say this largely benefits factory farms. ( The Food and Environment Reporting Network [[link removed]])

The National Labor Relations Board is challenging Whole Foods for firing and disciplining workers that wore Black Lives Matter apparel with the broader goal of strengthening workers’ rights to free speech. ( Bloomberg [[link removed]])

About the Open Markets Institute

The Open Markets Institute promotes political, industrial, economic, and environmental resilience. We do so by documenting and clarifying the dangers of extreme consolidation, and by fostering discussions of ways to reestablish America’s political economy on a more stable and fair foundation.

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Written by Claire Kelloway

Edited by Phil Longman and Anita Jain

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