January 9, 2025
Passage of the EATS Act during a tariff-heavy Trump administration would destroy the premium margins keeping many pork producers afloat at a time when pork markets would be at their most vulnerable.
The EATS Act, introduced by Congresswoman Ashley Hinson of Iowa and Senator Roger Marshall of Kansas, is a bill being pushed in Congress by Smithfield, the world’s largest pork producer, to reverse a 2018 ballot initiative in California, Proposition 12, that banned the sale of pork products coming from other states that use gestation crates.
These crates confine pregnant pigs inside a cage where they cannot roll over or turnaround for almost four months – only to then be transferred to another crate where they are severely restricted for another month. It is a standard practice of industrial agriculture which outcompetes any producer that does not use them because its closeness to the border of immorality maximizes efficiency output.
Many small and independent producers who refuse to adopt this industrial model claim Proposition 12 gives them a new competitive market, plus a $6.30 per hundred pound premium on top of the base hog price according to the USDA. This helps producers avoid industry pressures that stress efficiency over everything.
The opportunity to market a distinct product is appealing to major producers, too. Clemens Food Group, Pennsylvania’s largest pork producer, and the nation’s fifth largest, also opposes the EATS Act and cites the opportunity to market a superior product and their history of investments made to comply as reasons why they oppose the bill.
This all coincides with Trump’s trade tariffs threats. The U.S. has been a net pork exporter since 1995 and exports shattered records in 2023. Though there were many factors to this success, alleviation of Chinese trade tariffs on U.S. pork exports helped tremendously.
During the Trump trade-war, China retaliated against our tariffs with tariffs of their own, including duties peaking above 60% for U.S. pork. China lifted their pork tariffs when President Biden took office as part of a gesture of goodwill to help repair the U.S.-China trade relationship. This was a huge deal because China is one of the largest export destinations for U.S. pork. Whether China will keep pork tariffs lifted as Trump retakes the White House is something worth monitoring.
Concerningly, Trump’s threat to enact 25% unilateral tariffs on Mexican and Canadian goods will upend U.S. pork trade since Canada is our largest importer for pork products and Mexico is our largest export market for U.S. production. Placing tariffs on Canada and Mexico will have added impacts too. If these tariffs are enacted, Trump’s signature United States-Mexico-Canada Agreement (USMCA) could collapse, ending duty-free agricultural trade.
A combination of the EATS Act passing and a new trade war with our biggest trading partners will hurt pork producers who have made the investment to comply with California the most because they will see their investments made redundant and unable to compete against the flood of cheap pork entering the state as conventional pork producers seek to dump their product elsewhere because of trade disruptions.
At this point, seven years after California passed Proposition 12, enacting the EATS Act will hardly prevent any pork producers who do not want to convert from converting. In July, 2024, the Iowa Pork Producers Association said that everyone who wanted to comply with California’s new standard had already done so. Since Iowa is the largest pork producing state, this suggests that the dust has settled on who will or will not choose to convert.
Lastly, eight minor pork producing states who’ve already or will soon ban gestation crates won’t have markets where their products can compete on the same level as all other states which have not banned the confinement practice.
Currently, EATS Act backers are pushing the House and Senate Agriculture Committees for its inclusion into the Farm Bill. The Farm Bill was already extended for another year last November and is looking to be extended for a further year. Ultimately, the longer the Farm Bill drags on the harder it will be to justify the inclusion of the EATS Act as supply chains compliant with the new ballot initiative grow.
Vincent Trometter is Vice President of Competitive Markets Action, Inc. in Washington D.C.