With Stable U.S. Pork Supply Takes Hit from Prop 12

California's Prop 12 went into effect in the New Year, adding to the uncertainty in the pork market. Bernt Nelson, Economist at the American Farm Bureau Federation, discusses the current conditions in the pork market.

“We just had USDA’s Quarterly Hogs and Pigs Report released. We found out that we’ve still got quite a few hogs in the inventory. The breeding inventory was up three percent from this time last year, so what this means is we have more hogs in the market than we have demand.”

“California possesses about 13 percent of the demand for U.S. pork, and went Prop 12 goes into effect, we lose that 13 percent of demand from the conventional marketplace. Now that we're facing a decreased inventory in the beef market, that leaves us asking when will consumer demand start to pick up for pork products, or will they, as pork is a very close substitute to our beef prices.”

“…When this takes place, the only pork that will be allowed for sale in that California market will have to be compliant with Prop 12, so that automatically removes many of our conventional producers from that marketplace. And so, until we see some increased demand domestically and continued demand in our export markets, we're going to be at the mercy of whatever comes into play here.”