California’s law mandating minimum space requirements for certain livestock and poultry survived a challenge at the Supreme Court this week, though meat industry groups plan to continue their efforts to block implementation of Proposition 12.

That’s prolonging what Urner Barry pork market reporter Russell Barton calls “a bit of a wait and see situation” for the pork industry. Most producers don’t know whether they will be banned from the California market starting in 2022. In a webinar Friday, Barton said 4% of sow housing in the country currently provides the amount of space the California initiative will require. And he points out while California is a large pork market, it produces very little. He estimates California houses about 0.13% of the nation’s breeding herd. With Prop. 12, “you basically have California dictating what a state like Iowa has to do in terms of raising hogs.”

Barton said producers now must weigh whether to invest in the additional housing necessary (or reduce their herd sizes) to meet California’s mandate. They likely can expect higher prices for California sales if they do, but whether the premium pricing would last long enough to recoup the investment remains an unanswerable question.

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The law also impacts veal and egg production, expanding upon the older Proposition 2, which already pushed many egg producers to change hen housing to be compliant. During the initial transition to cage-free eggs, prices in California shot up $2 per dozen higher than in the Midwest, noted Brian Moscogiuri, Urner Barry’s egg market reporter, in the same “Bacon and Egg” webinar. “It motivated a lot of producers to make those conversions to Prop. 2 compliant.” Barton said as pork producers contemplate significant changes, he especially feels for smaller operations.

“It's gonna cost money,” he said, “and do they have that kind of capital?”

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