California's Animal Confinement Laws Force Largest Pork Producer, Smithfield, To Shut Operations

17th June, 2022

In startling news, the world’s biggest pork producer, Smithfield Foods have opted to close the Smithfield’s Farmer John meat-producing plant in Vernon.

The operations are to shut down as early as 2023 as they will discontinue the harvest and processing procedures in California while they choose to “align its hog production system by reducing its sow herd in the Western region.”

Right from items like bacon, sausages, hot dogs and bone-in-hams to sliced hams will no longer be made at their California plant.

At the moment, the plant in Vernon harvests company-owned pigs with brands like Farmer John among others, but the same customers can get their products from other Smithfield facilities.

If you’re curious about this shocking move, you should know that Smithfield said, the decision was made “due to the escalating cost of doing business in California.” The brand is set to cut down on its sow herd in Utah and reconnoiter plans to withdraw from their farms in Arizona as well.

WHAT IT MEANS FOR THE WORKFORCE

Smithfield is owned and operated by a Hong Kong-based WH Group Ltd. They have contracts in place with labour unions, which allows them to shut down the Vernon plant in California and offer compensation and transition assistance to out-of-work individuals.

At the moment the company has employed nearly 1,800 people who earn about $21 every hour.

California has few in-house pork producers, but the market in the state demands more than they produce. CA’s large consumer market is nearly 13 to 15 percent of the entire U.S.A’s demand for pork.

This leaves the company with the option of out-of-state production to meet the state’s demand.

THE ISSUE OF HUMANE HOG HOUSING SIZES

For the uninitiated, in 2018, a ballot move was passed by voters in the golden state called Prop 12 that necessitates ranchers to offer hens, sows, and veal calves specific space requirements.

This was to ensure that livestock can lie down and turn around in spaces where they were kept prior to slaughter.

It is a humane move that every slaughterhouse must comply with; however, not everyone is willing to do so. Nevertheless, California will subsequently ban the sale of non-compliant products.

The state of California presently has Prop 12 at the U.S. Supreme Court that plans to legally demand hog housing sizes for non-California pork producers who are selling products in the region.

PORK PRODUCERS THREATEN NON-COMPLIANCE

Although obviously, pork producers across the country who sell products in the Golden state are fighting California’s hog housing standards mainly to cut costs.

Jim Monroe, vice president of corporate affairs at Smithfield, says the “high costs and over-regulation” made them shut down the Vernon plant as it is cheaper to operate in other states. Jim further added, "It's increasingly challenging to operate efficiently there. We're striving to keep costs down and keep food affordable."

THE HISTORY OF THE VERNON PLANT

One of the earlier meat-producing facilities in the USA, it was first erected by Clougherty Packing for coming up with Farmer John brand products. These are still major players in the golden state district. However, Hormel was next to buy the plant over a decade ago in 2005. They subsequently sold to Smithfield 10 years later in 2015. They are now poised to shut down the historic Vernon plant citing "the rising costs of doing business in California".

DISCOVER THE REAL REASON

The cited reason for the plant's closure seems unlikely as the brand has managed to operate in several states including California in similar circumstances for decades together.

This has been an issue for Smithfield ever since the measure was adopted in 2018. As the Vernon plant’s produced products are also exported to other places, they chose to export all the produced pork at the plant.

This way, they would not have to comply to Prop 12 housing standards. However, exporting all that is produced at Vernon didn’t make much economic sense long-term.

The rise in cost due to the demand for housing standards has made the plant reconsider its operations.

Reports suggest that less than 10,000 of Smithfield's Utah sows are compliant with Prop 12.

In case you’re wondering what this shall mean for the pork production in the USA, then the decrease in overall slaughter volume will be less than 1.5% from 2021 because the volume increases due to chain speed waivers. 

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