Ag Alert. May 24, 2023

Court Continued from Page 1

“In a functioning democracy, policy choices like these usually belong to the people and their elected representatives,” Gorsuch wrote. For California, an immediate concern is whether there will be enough Proposition 12-compliant pork products available to serve its market and what impact a short- age will have on prices, said Jill Damskey, executive director of the California Pork Producers Association. Most pig farmers here already are Proposition 12-compliant, she said, as many of them raise show pigs and use group housing, not the gestation stalls common in large commercial hog opera- tions and that Proposition 12 seeks to ban. The court ruling has caused confusion for California processors, grocers and restaurants that source out-of-state pork, Damskey said. Though Proposition 12 took full effect last year, a California court blocked enforcement of part of the law be- cause the California Department of Food and Agriculture did not finalize regulations until last September. A court injunction gives those businesses until July 1 to com- ply with the new rules. Damskey said she has fielded calls from processors and grocers needing clarifica- tion on what the July 1 end date means: At what stage of the production process can they buy from out of state? Do piglets need to be born by July 1? Can stores sell product they already have on hand after July 1?

Impacts of the law have also affected young people who raise project animals. Those who want to sell eggs or pigs into the general food chain must comply with the minimum housing standards. Damskey said CDFA has agreed to allow fairs to collect all Proposition 12-compli- ant documents on project pigs that will go into the general food chain, simplifying the process. Christine McCracken, executive director of animal protein for RaboResearch Food and Agribusiness, said many out-of-state producers were reluctant to make invest- ments to comply with the California law because they were waiting on the outcome of the court ruling. She estimated 6% to 7% of U.S. pork pro- ducers now comply, which would supply about 50% of California’s pork needs. More U.S. farms could be converted, she said, such as those that had already switched to open-pen gestation or “loose housing.” But much of the production from those farms is already committed to other markets. With the nation’s $20 billion-plus pork industry facing its worst economic period since 2008, she said producers are in no rush to overhaul their facilities. “Investing right now is a big ask,” she said. “It’s not to say that they aren’t making the changes. Some are.” Some large vertically integrated pro- cessors such as Hormel, Smithfield and Tyson have already begun to change their

operations to comply. McCracken said it remains unclear if those firms will have compliant products available on day one. Imports could fill some of the void. Animal housing standards in Europe, for example, are tougher than California’s in some cases, she noted. Some Mexican producers are gearing up to comply, and some Canadian companies such as du- Breton and Maple Leaf already comply, she said. “That initial transition is going to be a little messy,” McCracken said, noting a lot of noncompliant products were already on their way to the California market, and they won’t be eligible for sale after July 1. The law affects primarily whole pork meat such as pork chops and bacon. It does not apply to cooked and ground products such as sausage and hotdogs. McCracken said she expects “some fall- out” from the Supreme Court ruling, as it raises questions about what agricultural practices states can dictate in other states. In his dissenting opinion, Justice Brett Kavanaugh issued a similar warning. He wrote that California’s law “may fore- shadow a new era where States shutter their markets to goods produced in a way that offends their moral or policy prefer- ences—and in doing so, effectively force other States to regulate in accordance with those idiosyncratic state demands.” (Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)

The National Pork Producers Council and the American Farm Bureau Federation filed suit, saying the California regulations violate the dormant Commerce Clause. They argued that the state unconstitution- ally imposes regulations on farms outside its borders. “At the heart of this argument is whether one state can set the rules for the entire country,” AFBF President Zippy Duvall said in a statement. The court ruled the complaint failed to show a substantial burden on interstate commerce and “merely allege harm to some producers’ favored ‘methods of operation.’” It also rejected the groups’ ar- gument that the court should strike down state laws with “extraterritorial effects.” Writing for the majority, Justice Neil Gorsuch said virtually all state laws “cre- ate ripple effects beyond their borders.” Environmental laws, for example, influ- ence where companies choose to manu- facture their goods, he noted. The court also ruled that the dormant Commerce Clause does not authorize judges to vacate duly enacted state laws regulating in-state sale of goods such as pork “based on nothing more than their own assessment of the relevant law’s ‘costs and benefits.’” The competing goods in this case—new costs incurred by out-of-state producers vs. the moral and health inter- ests of California residents—are incom- mensurable, the court said.

Agricultural Market Review

Quotations are the latest available for the week ending May 19, 2023 Year Ago Week Ago Latest Week Livestock Slaughter Steers – 5-Area Average Select & Choice, 1150–1460 lbs., $ per cwt. 119.25-120 170-175 169.97 Hogs – Average hog, 51-52% lean, Iowa-Minn. market, $ per cwt. 109.81 75.23 77.68 Slaughter Lambs – $ per cwt. 125–175 lbs. National weekly live sales 175-225 156 140-190 Field crops – basis prompt shipment Barley – U.S. No. 2, $ per cwt. Truck, Stockton-Modesto-Oakdale-Turlock No Quote No Quote No Quote Cotton – ¢ per lb., Middling 1 3/32” Fresno spot market 76.56 77.15 77.96 Corn – U.S. No. 2 yellow $ per bu. trucked 8.49 8.39 7.85 Alfalfa Hay – $ per ton, quality*, FOB Region 1, Northern Inter-mountain 200 (forage mix) 300 (S) 230-340 (S) Region 2, Sacramento Valley 280 (P) No Quote 350-390 (S) Region 3, Northern San Joaquin Valley 280-310 (S) 400 (P/S) 220-250 (S) Region 4, Central San Joaquin Valley No Quote 440 (S) 320-385 (S) Region 5, Southern California 259 (P) 25 (P, per bale) 25 (P, per bale) Region 6, Southeast Interior 215-220 (P) 330 (P) 315-350 (S) Oat Hay – $ per ton, quality*, FOB Northern California, dairy No Quote No Quote No Quote Oats – U.S. No. 2 white, $ per cwt. Statewide, trucked price No Quote No Quote No Quote

2023 Retirement Plan

California’s state retirement plan mandate expanded on January 1 to include those employers with one or more employees. Ensure you are prepared to comply with the new California retirement plan mandate. Join us at one of our webinars presented by Nationwide. For a list of class dates and to register, visit cfbf.com/FBE or call (800) 698-FARM for assistance. You will receive a Zoom link and details two days prior to your selected webinar date. Members, enjoy access to free classes! Register for the upcoming webinars.

Dry Beans – Grower FOB prices Baby Limas, $ per cwt, (sacked) Large Limas, $ per cwt. (sacked) Blackeye, $ per cwt. (sacked)

No Quote No Quote No Quote

Rice – Milled No. 1 Head, FOB No. Calif. mills Medium grain, $ per cwt. Wheat – U.S. No. 2 or better, winter, $ per cwt. 13% protein, Los Angeles, trucked price

39-43

70-72

13.75 (No. 1) No Quote Provided by the California Farm Bureau as a service to Farm Bureau members. Information supplied by the U.S. Department of Agriculture’s Market News Branch. * ADF=Acid detergent fiber; (S) = Supreme/<27%ADF; (P) = Premium/27-29; (G) = Good/29-32; (F) = Fair/32-35. No Quote

May 24, 2023 Ag Alert 13