California Proposition 2 enacted Jan 1 abolishes confinement crates for veal and hogs and laying cages for hens.  Their compatriots on the left coast in Washington and Oregon (along with Michigan and Ohio) are considering similar laws. New Jersey’s governor vetoed a similar law in November. This impacts Iowa, just not California. Iowa is the number one producer of eggs, selling about 40 million eggs per day out of state.  Iowa brought a law suit against California asserting that the  California laws violate the federal constitution by favoring instate producers who have to meet the requirement over out of state producers who do not. Iowa lost at the trial court level but has filed an appeal. Starbucks, Burger King and Whole Foods have pledged to not buy eggs from caged laying hens. Combined, the response from the industry is telling. Egg producers have to put fewer hens per cage or reconfigure existing house. Projections are that egg prices will rise 10%-40% as result of this and avian flu issues in Canadian and Mexican flocks.  The hog industry will have similar long term impacts, with several producer groups already moving away from gestation crates.

The implication is clear, social legation and not science based legislation is gaining a foothold in the statehouses of the Union. The hallowed reverence for the farmer is fading, as less than 2% of the population is connected directly to an active Ag operation. The stereotypes of bib overalls,   hand milking cows and putting along on a narrow front tractor with a six foot disk are fading. The question is what is the new stereotype of the farmer? When urban dwellers think of farmers they will either see technology using stewards of animal and natural resources who are vested in their product or they will see miles of confinement pig barns, piles of manure and endless rows of grain crops with no human connection.  When one of these bills come up, who with the legislator think about when casting the vote?  Some commentators believe the only reason New Jersey vetoed the legislation is because of the governors concern of his own presidential run, which of course, runs through Iowa.

Labor shortages because illegal immigrants are planning on staying  

President Obama’s recent stance on immigration has an impact on ag directly. While Iowa doesn’t rely on season labor, many sectors of the ag market do. The immigration policy shift has had the impact of more illegal immigrants looking to take steady year round work as they no longer fear immediate deportation or a need to stay on the move. This is reducing the amount of labor available for seasonal labor for hand picking vegetables and fruit and even impacting dairy operations as those workers move towards trades that will be long term growth jobs as opposed to jobs trades that can easily be applied to a variety of geographic regions.

Water Policy is Nuts

High water demands of almond trees and other nut trees mean that those operations are dependent on laws that protect their right to water. In the Sacramento River area, federal control of the water resources with priority for nurturing California salmon over almond farms has the potential to kill the almond farmer’s harvest. Almond farms were established in the Sacramento area over the dryer San Joaquin Valley when water appeared to be available to them.