Well, that escalated quickly.
The National Pork Producers Council and American Farm Bureau are running their case against California’s Proposition 12 up the flagpole—all the way up. They’re appealing the Ninth Circuit Court decision in July that upheld a lower court ruling against the groups and have petitioned the U.S. Supreme Court to take the case.
The argument: California’s Proposition 12 establishes “arbitrary” production standards. Pork from hogs not meeting the standards does not pass go and is banned from being sold in California. NPPC President Jen Sorensen says the groups are asking the Supreme Court to consider the constitutionality of California establishing regulations that affect operations outside the state.
A little background: In a few short months, on Jan. 1, 2022, Proposition 12 will require all pork sold in the state—no matter where it was raised—to comply with California’s specific housing standards. Unfortunately, almost none of the pork produced in the U.S. meets those standards. And the cost of converting to alternative sow housing systems is estimated in the billions of dollars.
If Proposition 12 stands, NPPC and AFB say it will be out of the frying pan and into the fire for pork producers across the country and California households wanting to bring home the bacon—literally.
It’s back… and too close for comfort.
African swine fever (ASF) has reared its ugly head in the Dominican Republic.
Refresher: While this is the first instance of ASF in the Americas in 40 years, you’ll recall China’s original ASF outbreak in 2018. China, the world’s largest hog producer, had to destroy half its herd within a year of detection, and the disease spread globally at that time.
Fortunately, North America was spared.
But now things are a bit dicier…
The Dominican Republic is restricting hog shipments and has deployed the military to contain the spread of the disease. Neighboring countries have closed their borders to Dominican pork and increased airline restrictions on passengers bringing products that could carry the virus. Even airline garbage is being checked and properly disposed of to ensure the virus does not spread outside of the Dominican Republic.
The only remedy? Killing the hogs in the affected areas, which means losses of $180M.
Banning Dominican pork is nothing new for the U.S. It banned Dominican pork products back when the island nation battled classical swine fever between 1978 and 1980. 192K Dominican hogs were destroyed during that period.
What lies ahead: The USDA will assist the DR with testing support and mitigation measures.
With the 4th of July less than a week away, it’s the perfect time to do a status check on an American BBQ staple: pork.
Not so fast… The long simmering feud over pork processing line speeds will reach a crescendo as a federal judge’s order will go into effect.
Starting today, those line speeds will be capped at 1,106 hogs per hour. Research by Iowa State’s Dr. Dermot Hayes found that this change alone will reduce the U.S.’s pork processing capacity by 2.5% and lead to $80 million in lost revenue for small pork producers.
Back to the wild west? While processing speeds slow down, implementation of Prop 12 seems to be moving at breakneck pace.
The infamous California ballot measure aimed at establishing animal care requirements looks to be close to reality, and the news may not be all good for the consumer. Local supply is expected to see a 50% drop in California once the new requirements take effect. That supply shortage will lead to much higher prices.
A silver lining… maybe? Many in the industry were predicting a tough Q4, worried that the market-ready hog supply might outpace slaughter capacity. In its June report, the USDA showed a 3% drop vs. last year’s number of pigs under 120 pounds. Fewer small pigs in June means fewer to slaughter later in the year, which might keep everything buzzing along.
The pork industry is doing all it can to avoid tapping on the processing brakes.
A federal district court ruling from late March will slow line speeds at pork processing plants on June 29 if left unchallenged. The court ruling came by way of the United Food and Commercial Workers Union, which cited worker safety as the reason for the ruling.
Pork producers are saying, “don’t slow our roll” because it would dramatically affect U.S. hog producers and especially hurt smaller producers – to the tune of more than $80 million in reduced income.
Really pork (g)rinding our gears. Iowa State University’s analysis shows the shift would cause a 2.5% loss in pork packing plant capacity and force plants to use more mandatory overtime.
Show me the data. Some plants have been operating with faster line speeds under a pilot project for years. They were processing 1,450 hogs per hour. The slower line speeds would max out at 1,106 hogs per hour. The Iowa State analysis predicts the fewer pigs going to market, the more backlog, which would drive prices down and hurt farmer profitability.
One example of that is at Seaboard Foods. They calculated that scaling back the line speeds would result in 126,000 excess market-weight hogs barreling out of the company’s production pipeline over the following ten months.
Where this goes: The National Pork Producers Council is urging USDA to intervene before the ruling takes effect at the end of June.
Consumers continue to push for more oversight into animal welfare and sustainability practices, and California’s Proposition 12 (formally titled Prevention of Cruelty to Farm Animals Act) is just the latest in a string of measures that will significantly impact the nation’s livestock industry. It passed in November 2018, with more than 60% of the California vote.
In a nutshell: Proposition 12 sets new criteria for the confinement of sows (and laying hens, and veal calves). Under the new guidelines, each sow will require at least 24 square feet of space. Not in compliance? Pork would be pulled from sale.
And one other tiny detail: Pork produced in other states for sale in California must also comply.
Constitutionality challenges: The North American Meat Institute has already challenged the legality of Proposition 12, but the US Court of Appeals ruled against that challenge; they’re now asking the Supreme Court to review that ruling.
And this… The National Pork Producers Council and the American Farm Bureau Federation have also sued the state. Oral arguments are expected at the 9th Circuit Court of Appeals on April 14.
Potentially pig changes comin’: If those legal challenges aren’t successful, the new regulations are set to take effect on January 1, 2022 — and how it would impact markets and procedures around the world is open to speculation.
With less than 4% of the current U.S. sow herd raised per the Prop 12 rules, many fear that immediate supply chain disruptions will be a near certainty.
China pork producers are playing a never-ending game of Whack-a-Mole with African Swine Fever [ASF].
Three years into the war against the global swine virus, the Asian nation faces new cases in its own backyard and in neighboring countries.
Where things stand… Since the start of 2021, six new outbreaks have been reported in the key pork-producing regions of Sichuan and Hubei. The relatively small clusters of positive cases are being chalked up to a seasonality bump and new strains.
The silver lining: The seasonal bump shouldn’t have a meaningful impact on supply, and the new strains are less harmful, though still highly transmissible.
But China is definitely feeling the sting.
Domestic hog prices have plummeted 19% since the beginning of the year. And while the USDA expects 14% growth of the Chinese herd this year, these ASF speed bumps could knock those efforts off track.
And about those neighbors…
- Malaysia’s 3,000 cases this year put them on China’s blacklist as no imports of pigs or boars are being accepted.
- Vietnam is also getting the stink eye after 2,000 ASF-positive pigs were found.
- Russia’s rough Q4 2020 of ASF madness is finally under control after +500K pigs were culled.
What’s ahead: With no commercial vaccine in sight and shakey market prices, it’s going to make for another interesting year for the China pork industry.
Asia just can’t seem to shake the African Swine Fever.
After new strains of the virus popped up across China last month, now Hong Kong is facing a test. For the first time in two years, the independent region found ASF in its domestic herd. Authorities ordered 3,000 pigs to be culled.
Here we go again: The last ASF flare-up in 2019 was a fluke. 10,000 pigs imported from mainland China, the epicenter of the pork pandemic, tested positive for the virus and had to be culled.
Zoom out: Hong Kong isn’t alone. New, sporadic cases continue to resurface in other Asian countries. Indonesia, South Korea, and Cambodia are in the mix, attempting to tamper wild boars who are spreading the disease.
Genetically modified pigs have gotten the official thumbs up from the FDA this week.
With the approval, GalSafe pigs can now be utilized for food and medicinal purposes. The first-of-its-kind livestock alteration was brought to life by Revivicor, a regenerative medicine company.
The details: GalSafe pigs are modified to remove alpha-gal sugar from the animal’s cells. An allergy to alpha-gal sugars in humans, while rare, is believed to be caused by lone star tick bites.
As pig cells and tissues are commonly used in the medical world, there is lots of excitement. Avoiding allergic reactions to otherwise life-preserving drugs or transplants is a big deal.
The meat of the matter: The dinner plate discussion is where contention lies. Allergen studies by the FDA focused on pharmaceutical use, rather than consumption, although the department notes that the meat is safe to consume. Taste, nutritional factors, and shelf-life are identical to non-GMO pork.
But not so fast: Don’t expect to see GalSafe pork in the meat case next week. GMO labeling will have to be worked on. Plus, the meat will only be available via mail order anyway.
And even then, it’s no sure bet. Take it from AquAdvantage salmon, the only other GMO-approved consumable animal protein for humans. Five years after FDA approval, the fish filets are still not available for consumers due to continuous legal challenges.
- Worth noting: The National Pork Producers Council has begged for the White House to move livestock genetic editing approval over to the USDA, noting the ‘FDA’s regulatory overreach’ will slow down U.S. producers’ ability to compete globally.
Bottom line: FDA approval might just be the starting line for GalSafe pigs. Time will tell if and when it becomes commercially available.