The Wednesday HOT TAKE

TEN things that will shape 2024

#10 | A new year, new rules

California's Proposition 12 went into full effect yesterday with huge implications for US pork producers as it bans the use of gestation crates in farrowing and sets minimum space requirements for any pig whose meat is sold in the Golden State.

California consumes nearly 15% of the nation's pork each year while only producing a fraction of a percent of supplies, making its regulatory decisions market-shifters by default.

The pork portion of Prop 12 has been in limbo for years as industry groups fought for its repeal. The Supreme Court ultimately upheld the Californian voters’ decision (2018), putting the new rules into effect January 1, 2024.

Hogs now join the likes of laying hens and veal who have been subjected to Prop 12’s tightened standards since 2020.

Market implications:

Speaking from (egg) experience - pork that is “California Compliant” will fetch a premium as compared with pork that was not raised in accordance with the new standards.

Not only does it drive costs up for producers as barns are not filled to capacity, but it drives up costs for the Californian consumer… just another day in paradise, right?

Leave it to California to enact market-distorting legislation. This isn’t the first and definitely will not be the last.

---

#9 | Cast your ballot

Speaking of voting - a record number of people will see elections in 2024: