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Hormel challenged by changing Proposition 12 deadlines

Some retail and foodservice partners are not willing to pay the premium for compliant products until the Proposition 12 is fully implemented and enforced.

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Hormel Foods

Changing implementation deadlines for California’s Proposition 12 has caused some difficulties for Hormel Foods, and Jen Ehresmann, the company’s vice president of supply chain, wonders if other pork producers aren’t feeling the same pains.

Ehresmann addressed the situation during the Partners in Ag Innovation Conference on July 25. The conference was held at the MinnWest Technology Campus in Willmar, Minnesota, and also virtually.

Proposition 12 calls for all pork raised in or sold in California to originate from farms that do not use gestation stalls. Ehresmann said becoming compliant with Proposition 12 requires finding some new producers with which to partner.

“We saw it coming, and it’s probably something we’ve been working on for two years now,” she said. “So we pre-emptively did begin to raise hogs to the space requirements there. What that meant was finding and partnering with partners that were willing to go that step. … We really did have our supply chain ready to go as California was changing.”

Jen EhresmannJen EhresmannCourtesy Hormel Foods

Hormel paid a premium for a supply that was compliant with Proposition 12. However, one problem is that not all of Hormel’s retail and foodservice partners were willing to absorb some of Hormel’s additional costs until Proposition 12 was fully implemented, so Hormel was faced with that financial burden.

Adding to the difficulties were the changing dates to which Proposition 12 would be implemented.

In January 2023, a judge ruled that enforcement of Proposition 12 would be delayed 180 days. More recently, a ruling in the Superior Court for the County of Sacramento called for enforcement of Proposition 12 to be modified from July 1 to December 31.

“The changing deadline is really causing a lot of heartache right now. We’re ready to go, get to the 11th hour, maybe the 12th hour, and the regulation changes. So, although we’re not retrenching, it’s that start-and-stop mentality. We got all the way to the point where we were producing product under Prop 12 requirements and shipping product, and then ultimately had to step back,” she said. “I’m wondering if others feel that same way.”

Also during the conference, Ehresmann discussed how the company changed its approach to relationships with suppliers and vendors from vendor management to vendor partnership.  

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