How many Prop 12 sows are out there? No one knows for sure. Anecdotal evidence points to around 400,000 sows being compliant as of Jan. 1, but that only meets 60% of California’s historical pork consumption levels. Steve Meyer estimates the state needs about 664,000 sows to feed the state, to supply cuts the state’s consumers prefer as well as to make up for partial carcass sales and productivity impacts.

“We take 13% of our total supply times 40%, that needs to go into California is covered product, 60% is how much you lose out of this. About 3.5% of total supply has to go somewhere else. It can't get into California,” says the economist with Ever.Ag. “So, what does that do to prices? Well, it pushes them down and we think that that percentage is going to get smaller as we go through time because we're going to have more sows become compliant. But still, at least in the beginning, I would think maybe as much as 10% impact on pork prices elsewhere.”

As for the cost of compliancy, Meyer told USDA Agricultural Outlook Forum attendees that it depends where the production system is starting from. If the producer has pen gestation, he or she will need to add additional space, from the traditional 16 to 18 square feet to meet the required 24 square feet.  Then the producer either has to reduce the number of sows or build more space.

Providing 24 square foot space for the original herd would require the producer to reduce sow numbers by 33% or add space to fit the 33% plus 5% more space for sows due to lower farrowing rates. The cost of adding space for 38% of the original sow herd at $60 per sq/ft equates to $1,440/sow. 

While reducing the number of sows may seem like the easy choice, Meyer points out it also dramatically reduces the number of pigs produced and creates inefficiencies through the rest of the operation, creating slack space in farrowing, nurseries and finishers. It also can raise other input costs.
“You're going to have to add more heating capacity because the animal density in your sow barns is going to be lower. And so, you're going to have to put more propane in those things to keep them warm. You’re going to add higher fixed costs due to slack in those downstream buildings,” Meyer says. “Your fixed costs go up, your sow cost per pig goes up because you're going to reduce the number of pigs you do by even more than you reduce the number of sows because we have some inefficiencies here.”

Even with the additional costs, reducing sows could be the fastest way to become Prop 12 compliant, Meyer says, especially if a producer cannot get a permit to build more buildings on site.

If a producer tries to reduce sows under a crated system, all the crates need to be taken out and pens and feeder systems need to be installed. In addition to the direct costs for removing stalls, gates, and remodeling, the producer will also have the added cost of adding space for 38% of the original sow herd at $1,440 per sow. A more costly option, however, Meyer points out it maintains sow numbers and pig flow.

If a producer starts out in pens, it is much less difficult to convert for compliance, but he or she will need to build enough space to handle a third of the sows in order to maintain pig flows.

“I think we have to add 5% to these to maintain pig flows because of the lack of the use of breeding stalls. [It] will cause our farrowing rates to go down by about 5%,” Meyer says. “And so, you have to add more sows in order to maintain pig flows. And why would you do this? Well, you can maintain sows. You keep selling the same number of pigs. You keep supplying your packer with the same number of pigs you always have. Adding space, if you can do it though, it's expensive.”

If a producer has a 5,000-sow unit, and 38%, or 1,900 sows need extra space, at $1,440 per sow space, that calculates to well over $2 million, Meyer says.

“When I did the numbers back four years ago, I was telling our clients do not do this for less than $6 to $8 per pig for at least five years,” he says. “I would tell them $10 to $12 now, and don't do it unless you get a contract for at least five years.”

No matter what, Meyer firmly believes the U.S. pork industry will deliver whatever product consumers want, so long as consumers will pay the full cost of that product and for a fair profit. However, consumers are never well served by reducing the choices available to them.

“We should always be concerned when well off elitists force higher food costs on low-income Americans. I'm always concerned about that and I think that's what happened here,” Meyer says. “The welfare of sows is not the goal of Prop 12 proponents, in my opinion, …  They want to remove pork from U.S. diets.”