Written by Arbitrage • 2022-10-26 00:00:00
California somehow consumes 15% of all pork in the US, but pigs are primarily farmed elsewhere in other states. Yes, there are farmers in California, but remember that most of the population in California is concentrated around the big cities like Los Angeles, San Diego, San Jose, and San Francisco, so truly the larger cities (like with state-wide and national elections) would be making these decisions for the entire state. We previously covered Proposition 12 when it just impacted farms in California, so why are we covering it again? This time it is because the madness is trying to spread to other states.
The Supreme Court is going to decide whether Proposition 12, which was passed in California, can be enforced in other states (mostly Iowa and Minnesota, where a lot of the pork is sourced). So, what's the problem? Well, the first issue is, should a state be able to enforce its own state laws in other states? Is it fair for California to enforce Proposition 12 in states that sell pork to the state of California? These are the questions that are going to be addressed by the Supreme Court.
What are some of the other issues with Proposition 12? Proposition 12 was put together by people who do not understand farms and believe to be putting the best interest of the animals first. It has unrealistic space regulations that for the most part is going to require farms to completely rebuild their pens and barns and may even need to extend the land the pigs live on.
In addition to space requirements Proposition 12 also has stipulations about any pork sourced from farms that use maternity pens which would essentially require farms to no longer have them. What is a maternity pen? Exactly what it sounds like: pregnant pigs are held in pens separate from the rest of the herd. Why? Well, while pigs are highly intelligent and social creatures, they do not mix well with the rest of the population when pregnant. Aggressive behaviors could put the mother and piglet at risk, the individual pens are easier to control the environment (ie: temperature) in and minimizes the need of the mother to fight for resources.
If allowed, who is going to pay for these renovations? Consumers, more than likely if it has to happen. There will probably be a compliance window if the Supreme Court allows California to make these enforcements, but if it is enforceable in other states, the price of pork will have to go up. If it's not enforceable, we can go on our merry way and enjoy our bacon and pork chops like we always have.
For the latest in news and stock picks, don't miss our podcast at https://www.arbitragetarde.com/podcasts/