RALEIGH — A recent ruling by the U.S. Supreme Court involving California’s Proposition 12 may have ramifications for North Carolina pork producers.
The case, brought by the National Pork Producers Council and the American Farm Bureau Federation (the plaintiffs) against the secretary of the California Department of Food and Agriculture, challenged the California law forbidding the in-state sale of whole pork meat from pigs raised in a “confined in a cruel manner.”
Proposition 12 was passed in 2018 and among its requirements is that sows should have at least 24 square feet of living space.
The plaintiffs in the case had argued that “Proposition 12 violates the U. S. Constitution by impermissibly burdening interstate commerce,” per the Supreme Court’s ruling. They also alleged estimated costs of compliance would make production costs rise – a cost borne by producers outside of California.
According to the plaintiff’s filing, “California consumes 13% of U.S. pork, but produces only 0.1% of what it consumes,” and that the requirements would “disrupt the $26-billion-a-year market in pork, force California’s preferred production methods on farmers everywhere, and impose the high costs of those methods on out-of-state farmers and consumers.”
The U.S. Supreme Court affirmed the decision of the Ninth Circuit which had upheld the district court’s ruling. The district court had ruled the petitioners’ complaint failed to state a claim as a matter of law and had dismissed the case.
“We are very disappointed with the Supreme Court’s opinion,” National Pork Producers Council President and Missouri pork producer Scott Hays said in a press release. “Allowing state overreach will increase prices for consumers and drive small farms out of business, leading to more consolidation. We are still evaluating the Court’s full opinion to understand all the implications. NPPC will continue to fight for our nation’s pork farmers and American families against misguided regulations.”
The North Carolina Pork Council (NCPC) also issued a statement on the ruling.
We are disappointed in the decision from the US Supreme Court,” the NCPC statement said in part. “Hog farmers in North Carolina do not understand how the State of California could have any say in how hogs are raised in NC. The pork produced here is safe, abundant and affordable. California’s Proposition 12 will increase prices for consumers in California.”
“We are in the midst of the most challenging economic times our industry has seen in the last 20 years. The cost of production is at record high levels,” NCPC’s statement says. “That’s the cost of feed, equipment, labor and other supplies. Nothing in Proposition 12 will help farmers deal with those record costs. In fact, compliance with Proposition 12 will significantly increase costs for NC hog farmers with no corresponding return on that investment.”
North Carolina’s economy is heavily tied to agriculture and pork production is a major factor.
The pork industry generates $10 billion in economic output for the state per an economic impact report published in 2019 by NC State University. The report cites pork production and processing categories as contributing $5.9 billion in sales, providing 19,298 jobs, and accounting for almost 20% of the state’s total cash receipts.
According to the most recent data on the NC Office of State Budget and Management website, the state has over 8.4 million hogs and pigs.
North Carolina was third in the country for hog production in 2022 at 8 million, behind Iowa (23 million) and Minnesota (8.6 million).
The U.S. Supreme Court’s decision was not a clean one, as well-reported by the website SCOTUS Blog, with the justices being split among various parts of the ruling.
“Companies that choose to sell products in various States must normally comply with the laws of those various States. Assuredly, under this Court’s dormant Commerce Clause decisions, no State may use its laws to discriminate purposefully against out-of-state economic interests,” wrote Justice Gorsuch, who delivered the opinion. “But the pork producers do not suggest that California’s law offends this principle. Instead, they invite us to fashion two new and more aggressive constitutional restrictions on the ability of States to regulate goods sold within their borders. We decline that invitation. While the Constitution addresses many weighty issues, the type of pork chops California merchants may sell is not on that list.”
Of the various concurrence and differing of justices in the ruling, Justice Barrett disagreed on a Pike claim made by the plaintiffs.
“… I disagree with my colleagues who would hold that petitioners have failed to allege a substantial burden on interstate commerce,” wrote Barrett. “The complaint plausibly alleges that Proposition 12’s costs are pervasive, burdensome, and will be felt primarily (but not exclusively) outside California. For this reason, I do not join Part IV–C of JUSTICE GORSUCH’s opinion. If the burdens and benefits were capable of judicial balancing, I would permit petitioners to proceed with their Pike claim.”
The Pike claim refers to the Supreme Court’s 1970 decision in Pike v. Bruce Church. Under that claim, they argued that the benefits for California residents shouldn’t have more bearing than the costs Proposition 12 places on out-of-state parties.