John Block Reports from Washington

Hello, everybody out there in farm country. This radio commentary is brought to you by the
National Corn Growers Association, CropLife America, and Renewable Fuels Association.
They are all friends, supporters, and allies of a healthy farm economy and prosperous rural
America. Thank you.

And now today’s commentary-

On Monday this week I opened my Wall Street Journal and a big story in the Business Section caught my attention. The headline read “Smithfield to Shut Plant in California.” Smithfield is the largest pork processor in the U.S. Their plant in California employs 1800 workers. They said, “the cost of doing business in California is just not worth it.” The processing plant just outside Los Angeles is huge. The higher taxes, utility costs, and labor are much higher than the 45 other states where Smithfield operates. Smithfield has one other serious concern – the regulatory costs in California. That state passed a law pushed by the Humane Society called Proposition 12. It dictates the size of the pen where a gestation sow is quartered. Farmers will be required to spend millions of dollars expanding the housing for their sows. That law is going to be considered by the U.S. Supreme Court. If the court accepts that law, all pork sold in California must meet the California law standards. Big hog farms all over the U.S. are very concerned. They might not be able to ship to California without rebuilding their barns. The state of California imports 99% of their pork from other states.

There are some farming operations that already meet the California law. They are mostly smaller
farms. Market hogs on my Illinois farm would be accepted. Our sows run in the pasture during
breeding and gestation. When they are a week from farrowing, we bring them into the farrowing
barn crate. Babies are born and after 3 weeks they are weaned. The sows go back to the field.
The boars are so excited to see them. Those baby pigs that we weaned will reach market weigh
in 5 or 6 months. Then we can all “bring home the bacon.”

A lot of big companies are escaping from states where taxes and other costs to operate are more than they can tolerate. Caterpillar just announced that they are moving their headquarters from Chicago to Texas. The states attracting big manufacturing companies have seen explosive job growth. Things are changing.

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