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NPPC'S PRESIDENT ON SKYROCKETING PORK PRICES IN CALIFORNIA AND FALLING DEMAND
Apr. 10, 2024
by Lori Stevermer is President of the National Pork Producers Council (NPPC) and is also a pork producer in Easton, Minnesota as it ran on Agri-Pulse
The U.S. Department of Agriculture has published the first consumer price analyses resulting from California's notorious Proposition 12, which bans the sale of pork born to sows raised anywhere in housing that fails to meet the state's arbitrary and non-science-based standards.
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| Lori Stevermer |
We always knew it would be expensive for farmers to make the costly on-farm compliance modifications that expert veterinarians agreed were neither necessary nor desirable. Few anticipated how much the mandates would hurt consumers, too.
Now, we know exactly how much pain is being inflicted upon consumers' wallets.
According to USDA researchers, Prop. 12 has resulted in an average price premium of 22% for compliant vs. non-compliant wholesale pork cuts, with premiums for loins and bellies around 30%. Since September, the average premium packers have paid for Prop. 12-compliant market hogs is $5.50 per hundredweight, or about $12 per head, assuming a carcass weight of 210 pounds.
At retail, groundbreaking market data collected by the Chicago-based research firm Circana shows prices for Prop.12-compliant products are now 20% higher in California than before the law went into effect.
What's more, USDA economists report that for bacon, ribs, and loins (the three most purchased products on a volume basis), the price increases attributed to Prop. 12 were 16%, 17%, and 41%, respectively. And, not surprisingly, California's share of national fresh pork consumption, which does not include bacon, has significantly declined, falling from its typical 10% to 8% as of January 2024.
Some of these price increases resulted from shortages of compliant pork, as observed by researchers at the University of California, Davis, who report that the "supply of pork meat to California consumers was relatively scarce from July 1, 2023, through early 2024 and has expanded only gradually." Researchers also acknowledge that the delayed enforcement of Prop. 12 allowed large reserves of non-compliant pork products to be sold in California until the end of 2023, potentially reducing the impact at the state's retail counters, at least for a limited time.
To read the entire article click here.
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