by Bethany Blankley
Another company is leaving California, this time the largest pork packer in the U.S.
Smithfield Foods, Inc., announced it is closing its Vernon, California, facility and reducing its hog production in the western U.S. region, citing as its reason the “escalating cost of doing business in California.”
Meanwhile, on Monday, two groups filed a brief with the U.S. Supreme Court challenging the constitutionality of a California law that could result in Californians no longer being able to buy pork products.
Smithfield announced “it will cease all harvest and processing operations in Vernon, California in early 2023 and, at the same time, align its hog production system by reducing its sow herd in its Western region.” It’s also decreasing its sow herd in Utah and “exploring strategic options to exit its farms in Arizona and California.”
It’s “taking these steps due to the escalating cost of doing business in California,” the company said.
It’s also providing transition assistance to all impacted employees, including providing relocation options to other company facilities and farms and providing retention incentives to ensure business continuity.
Due to escalating costs of doing business in California, coupled with inflation, supply chain issues, and Proposition 12, Smithfield calling it quits is another in a chain of events that could result in pork no longer being sold in California – unless the U.S. Supreme Court intervenes.
At issue is the Farm Animal Confinement Proposition (Prop 12), which voters overwhelmingly approved in 2018. It mandates space requirements for producers to follow for egg-laying chickens, calves for veal, and hogs. It also bans the sale of eggs, pork and veal in California if product confinement standards don’t comply with the new space requirements.
The American Farm Bureau Federation and National Pork Producers Council sued and the Ninth Circuit ruled against them. On Monday, they filed a brief with the U.S. Supreme Court challenging the constitutionality of Proposition 12.
Because the majority of pork Californians purchase is produced in other states, Prop. 12 effectively regulates out-of-state production, AFBF and NPPC argue, which the Commerce Clause of the U.S. Constitution prohibits. The Commerce Clause restricts states from regulating commerce outside of their borders.
“California is attempting to set the rules for the entire country,” AFBF President Zippy Duvall said in a statement. “Farmers are dedicated to caring for their animals, but this misguided law inhibits efforts to provide them a safe environment. Almost all of the pork consumed in California is produced outside of its borders. This law has the potential to devastate small family farms across the nation through unnecessary and expensive renovations, and every family will ultimately pay for the law through higher food prices.”
Attorneys general from 15 states submitted a brief with the Ninth Circuit in support of the plaintiffs and farmers, and legislators in other states have spoken out against Prop. 12.
Proposition 12 “will require massive and costly changes across the entire $26-billion-a-year industry,” they argue, which would devastate producers nationwide. Producers would have to convert operations, retrofit spaces, or build new facilities, all of which could cost 15% more per animal for a farm that has a minimum of 1,000 breeding pigs, the plaintiffs argue.
NPPC President Terry Wolters, owner of Stoney Creek Farms in Pipestone, Minn. said, “Proposition 12 illegally regulates farms across the country and international borders. It will have ripple effects of jeopardizing the health and safety of the entire U.S. herd, driving many smaller farmers out of business, dramatically increasing costs, and limiting consumer choice of affordable and nutritious pork products.”
Humane Society of the United States attorney Rebecca Cary argued after the 9th Circuit ruling that it came “on the heels of the Supreme Court’s recent rejection of a separate meat industry challenge to Proposition 12. It affirms yet again what the meat industry should hear loud and clear by now: that states have the right to pass laws that reject cruel products and protect their citizens’ health and safety.”
The Humane Society led the Prevent Cruelty California campaign, which ultimately won over voters who supported the measure by more than 62%.
As of an estimate last year, Californians currently consume 15% of all pork produced in the U.S. California restaurants and groceries use roughly 255 million pounds of pork a month.
Smithfield Foods’ announcement is the latest in an ongoing exodus of companies from California. Normally, companies announcing their exit from California relocate to primarily red states. But Smithfield Foods has been headquartered in Smithfield, Virginia, since 1936. It employs more than 60,000 people globally, with 40,000 in the U.S.
Its COO, Brady Stewart, said it was “committed to providing financial and other transition assistance to employees impacted by this difficult decision.”
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