In the past year, there have been any number of potentially consequential agricultural events. But at the end of the day for me, there is one clear choice as the most consequential. And it's not really all that close. Before we delve into the 2023 winner, let's review a number of stories and issues that didn't quite make the cut.
Eggs, eggs, eggs
A perfect storm of pent up demand and an avian flu outbreak sent the retail price of chicken eggs to historical highs early in 2023. Rising feed costs and runaway inflation added fuel to the fire.
USDA reported the flu outbreak killed 50.54 million birds nationwide, the deadliest in U.S. history. The average price of a dozen large grade A eggs averaged $4.82 just after New Year’s Day. Geographically, prices were significantly higher, topping more than $7. Egg prices did not fully normalize to historic averages until summer.
FDA, heal thyself
Anyone who has more than a passing interest in the doings of the Food and Drug Administration will tell you the place is well, broken. Morally, ethically, spiritually, physically, positively, absolutely, undeniably and reliably broken.
Which poses a rather significant problem. The Great and Powerful OZ — FDA — and gatekeeper to verifying the safety of all the food Americans consume, can't reliably protect the public from illness and death.
A December 2022 report from the Reagan-Udall Foundation confirmed the obvious:
“FDA has dedicated staff who are committed to protecting public health, but the current culture of the FDA Human Foods Program is inhibiting its ability to effectively accomplish this goal. … There are several factors contributing to this culture, including the lack of a clear vision and mission; a disparate structure and a consensus governance model; competing priorities; and the lack of a strong, supportive leader and, when the situation requires, an ultimate decision-maker, who is responsible for the Human Foods Program. The lack of a clear overarching leader of the Human Foods Program has contributed to a culture of indecisiveness and inaction and created disincentives for collaboration.”
The report went further, offering up five table-of-organization models for FDA consideration to strengthen oversight of the nation's food supply.
The best option would be to create separate food and drug administrations within the Department of Health and Human Services. The new food commissioner would directly oversee food safety and nutrition. The option isn't without speed bumps, requiring congressional approval.
In a magical moment of clarity, FDA Commissioner Robert M. Cardiff embraced the potential of the Reagan-Udall Foundation report and promised change. Unfortunately, Cardiff has decided to work around the fringes opting for a redesign of FDA's Human Food Program. Last summer, Cardiff introduced a new model for the Office of Regulatory Affairs.
Certainly these changes, if fully implemented, are welcome. But whether they truly make the U.S. food supply safer is debatable.
Foreign ownership of land
There he was. Oklahoma Gov. Kevin Stitt sitting tall in the saddle somewhere on his family's east Oklahoma ranch. Doing an interview for the local Fox News affiliate. And what might Stitt be talking about? How the Chinese “Communist Party” is snatching up Oklahoma land to build marijuana farms:
“We pulled the stats, and Oklahoma was the Number 1 (in) land purchases by the communists or foreign nationals (in 2020) than any other state, it’s like 380,000 acres,” That's a red flag for anybody.”
While it's true enough that foreign companies and individuals have significantly increased purchases of Oklahoma land in recent years, it isn't really the Chinese snatching up land. The only Chinese landowner in Oklahoma is Smithfield Foods, who has a measly 2,571 acres.
But when it comes to Chinaphobia, Stitt is not an outlier. The National Agricultural Law Center reports at least 35 states over the last year have written bills that would restrict or prevent foreign land ownership. At least 24 states specifically say foreign land acquisition or ownership is forbidden.
Why all the angst over foreign land ownership in general and the Chinese in particular?
Begin with foreign investment and acquisition of U.S. agricultural companies:
- China’s WH Group purchased Smithfield Foods — the largest producer of U.S. pork — in 2013 for a steal-of-a-deal $4.7 billion.
- Brazilian meat-producer JBS purchased a majority stake in Pilgrim’s Pride for $800 million in 2009.
- German pharmaceutical Bayer AG purchased St. Louis-based Monsanto for $63 billion in 2018.
- ChemChina purchased Swiss-based seed and herbicide producer Syngenta for $43 billion in 2017. At the time, Syngenta owned a number of U.S. seed and chemical companies that accounted for roughly 6% of soybean seed sales and 10% of corn seed sales.
- The Cargill and Continental Grain Company $4.53 billion dollar purchase of Sanderson Farms in 2022 creating the third-largest U.S. poultry processor.
China is far, far, far down the list when it comes to foreign land acquisition in the U.S. The Congressional Research Service reports that the top five foreign nations owning U.S. land are Canada, Netherlands, Italy, United Kingdom, and Germany. China is 18 on the list of foreign land holdings at 383,934 acres.
Is that really a problem?
The Proposition 12/Question 3 Hokey Pokey
The date was May 11, 2023. And Big Meat was in total cardiac shock. The U.S. Supreme Court handed down a ruling validating California's Proposition 12.
Back in 2018, California voters overwhelmingly approved Prop 12, a law that forbids the sale of most pork in the Golden State unless the slaughtered pig was birthed by a sow housed in 24 square feet of living space. The law treats all pork producers the same, both in state and out. If you want to sell pork in California, you need 24-square-foot pens.
Naturally, Big Meat filed a lawsuit. And then got its clock cleaned at both the district court and court of appeals. Which left Big Meat hoping the Supremes would take up what it claimed in National Pork Producers Council v. Ross was a constitutional nightmare of an issue.
Big Meat told the Supreme Court that Prop 12 ran afoul of the dormant Commerce Clause of the Constitution. Historically, the dormant Commerce Clause has prohibited states from passing laws limiting interstate commerce. Big Meat argued Prop 12 has the practical effect of controlling and discriminating against pork producers living outside California.
Big Meat also did a lot of petty squealing in its writ of certiorari, sounding a lot like a petulant child claiming Prop 12 would be the death of concentrated animal feeding operations, or CAFOs:
“Respondents ignore or contradict the complaint’s factual allegations that Proposition 12 will have significant extraterritorial effects. They ignore the intrusive on-farm inspection regime set forth in CDFA’s now-final regulations. And they assert that tracing and segregation will limit Proposition 12’s effects to the 13% of pork bound for California markets. But petitioners allege that all pigs will need to be raised in compliance with Proposition 12 because of the impracticability of segregating and tracing pigs and pork at every step of the production process at the necessary scale, because it is not known where a pig’s meat will eventually be sold, and because of the demands of retailers and distributors faced with the risk of criminal and civil sanctions.”
All that posturing carried no weight with the court. In a 5-4 ruling, not only did the court uphold that California was not in violation of the dormant Commerce Clause, but that if Big Meat needed “new and more aggressive constitutional restrictions on the ability of States to regulate goods sold within the borders” the industry needed to go elsewhere.
Writing for the majority, Justice Neil M. Gorsuch was crystal clear, informing the National Pork Producers Council and American Farm Bureau Federation that it isn’t the job of the Supreme Court to write “new and more aggressive constitutional restrictions on the ability of States to regulate goods sold within their borders:”
“…we remain left with a task no court is equipped to undertake. On the one hand, some out-of-state producers who choose to comply with Proposition 12 may incur new costs. On the other hand, the law serves moral and health interests of some (disputable) magnitude for in-state residents. Some might reasonably find one set of concerns more compelling. Others might fairly disagree. How should we settle that dispute? The competing goods are incommensurable. Your guess is as good as ours. More accurately, your guess is better than ours. In a functioning democracy, policy choices like these usually belong to the people and their elected representatives. They are entitled to weigh the relevant ‘political and economic’ costs and benefits for themselves …”
So Proposition 12 is Constitutional law. Enforcement begins Jan. 1.
Except ...
A close read of NPPC v Ross suggests Prop 12 survived because Big Meat lawyers wrote a rather ineffective writ of certiorari. In his concurring in part/dissenting in part opinion, Justice Brett M. Kavanaugh commented on the shoddy work:
“Although the Court today rejects the plaintiffs’ dormant Commerce Clause challenge as insufficiently pled, state laws like Proposition 12 implicate not only the Commerce Clause, but also potentially several other constitutional provisions, including the Import-Export Clause, the Privileges and Immunities Clause, and the Full Faith and Credit Clause.”
Big Meat has wasted little time in buying what Kavanaugh is cookin'.
Hello, Question 3.
Massachusetts is in the process of instituting its Act to Prevent Cruelty to Farm Animals (Question 3), a law similar to Prop 12.
Missouri-based pork producer Triumph Foods filed a lawsuit — Triumph Foods, LLC et al v. Campbell et al — following Kavanaugh's playbook almost word for word:
“The Act’s discriminatory purpose and effect further violates the rights of Plaintiffs under the Privileges and Immunities Clause, the Full Faith and Credit Clause of Article IV of the United States Constitution, the Due Process Clause of the Fourteenth Amendment to the Constitution, and the Import-Export Clause of Article I of the United States Constitution… The Act is also preempted by the Federal Meat Inspection Act and the Packers and Stockyards Act.”
The case is moving rapidly and a ruling from U.S. District Judge William G. Young may be days away. It's hard not to expect Question 3 will fail on at least one of Triumph's constitutional questions. Which then logically puts California's Prop 12 back in the legal soup.
But the winner for most consequential agricultural story of 2023 is ...
The rule of six and dismantling of federal agencies
What the nation is quickly learning is that a six-justice U.S. Supreme Court majority is, for all practical purposes, the equivalent of a monarchy's “heir and a spare.” With six like-minded justices there's built in redundancy on any given case in the event that one justice decides not to sing out of the group choir book.
A six-justice majority is also emboldened rather than evenly measured. It has no difficulty in rejecting legal niceties if it is more convenient to dispense with them. This is the current reality, thanks in no small measure to former Senate Majority Leader Mitch McConnell.
After the sudden death of Justice Antonin Scalia in February 2016, McConnell stonewalled President Barack Obama's nomination of Merrick Garland with 10 months remaining before the elections. McConnell's rationale was that by waiting it would give voters a say if they wanted a Republican or Democrat to nominate the next justice candidate.
It worked. After the election with a Republican in the White House, Kavanaugh got the nod.
Four years later, McConnell raced to confirm Amy Coney Barrett after the September 2020 death of Justice Ruth Bader Ginsburg scarcely seven weeks before the presidential election.
Include the April 2017 appointment of Neil M. Gorsuch and what you have today is an ultra conservative high court whose choir book contains the objective of handcuffing the executive branch from doing its job.
First up was the high court equipping itself with tools to justify on constitutional grounds federal agency rules and regulations that don't specifically adhere to Congressional intent. In West Virginia v. EPA, Chief Justice John G. Roberts Jr. and his merry band of conservative cohorts created a “major questions doctrine” to decide whether federal agencies exceed law.
Writing for the majority Roberts says:
“Agencies have only those powers given to them by Congress, and ‘enabling legislation’ is generally not an ‘open book to which the agency [may] add pages and change the plot line.’ We presume that ‘Congress intends to make major policy decisions itself, not leave those decisions to agencies.’ Thus, in certain extraordinary cases, both separation of powers principles and a practical understanding of legislative intent make us ‘reluctant to read into ambiguous statutory text’ the delegation claimed to be lurking there. To convince us otherwise, something more than a merely plausible textual basis for the agency action is necessary. The agency instead must point to ‘clear congressional authorization’ for the power it claims.”
Nowhere does Roberts define what constitutes an “extraordinary case” thus giving the court ultimate decision making power. But during last year's court term we learned that the major questions doctrine is no more than a tool of convenience, to be used by the high court when it feels like it.
This past May, the Supremes rejected regulations written in 1977 specifically identifying which of the nation's wetlands should be afforded Clean Water Act protection. Congress intended all wetlands adjacent to navigable waters of the U.S. to receive protection from pollutants.
The Army Corps of Engineers definition of “adjacent wetlands” includes not only wetlands adjoining covered waters but wetlands that are separated from covered waters by a manmade dike or barrier, natural river berm, beach dune, or the like. The definition acknowledges that pollutants can travel either above or below ground.
Justice Anthony Kennedy said as much in the 2006 ruling in Rapanos v. U.S.:
“Wetlands possess the requisite nexus, and thus come within the statutory phrase ‘navigable waters’ if the wetlands either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other waters more readily understood as ‘navigable.’ When, in contrast, wetlands’ effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory term ‘navigable waters.’ ”
Certainly application of the major questions doctrine analyzing the intent of adjacent wetlands would be appropriate. Right? Not so much.
In his majority opinion in Sackett v. EPA, Justice Samuel Alito gaslights Congressional intent by suggesting the legislative branch did not really say “adjacent wetlands.” Alito bypasses the “clear congressional authorization” to write only wetlands adjoining navigable waters of the U.S. should be protected from pollutants:
“In sum, we hold that the CWA extends to only those wetlands with a continuous surface connection to bodies that are ‘waters of the United States’ in their own right, so that they are ‘indistinguishable’ from those waters.”
In his concurring opinion, Justice Kavanaugh gave away the con offered up by Alito:
“The Court’s ‘continuous surface connection’ test disregards the ordinary meaning of ‘adjacent.’ The Court’s mistake is straightforward: The Court essentially reads ‘adjacent’ to mean ‘adjoining.’ As a result, the Court excludes wetlands that the text of the Clean Water Act covers — and that the Act since 1977 has always been interpreted to cover… In the end, the Court has no good answer for why Congress used the term ‘adjacent’ instead of ‘adjoining’ when Congress enacted §1344(g) in 1977.”
Now the Supreme Court has agreed to hear oral arguments on a long-standing legal doctrine that came out of Chevron v. NRDC.
The ruling, generally known as the Chevron deference, says that when statutory language is ambiguous or unclear courts must defer to an agency’s reasonable interpretation of the statute.
Writing for the majority in 1984 Justice John Paul Stevens says:
“Sometimes the legislative delegation to an agency on a particular question is implicit rather than explicit. In such a case, a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency. Judges are not experts in the field, and are not part of either political branch of the Government. Courts must, in some cases, reconcile competing political interests, but not on the basis of the judges’ personal policy preferences. In contrast, an agency to which Congress has delegated policy-making responsibilities may, within the limits of that delegation, properly rely upon the incumbent administration’s views of wise policy to inform its judgments.”
That the court decided to revisit Chevron isn't surprising. You can imagine Stevens' opinion does not sit well with a court eager to limit federal agency activity. Many observers expect that when it decides the case, the court will deal the Chevron precedent a death blow.
At the end of the day, it's clear. The Supreme Court is ready, willing, and able to realign separation of powers in ways that both minimize the administrative state and upset the balance of power between the judicial and executive branches of government.
It's not unfair to say that the next Supreme Court target could be USDA. Or the FDA. Nothing is out of bounds.
And that makes it the most consequential agricultural story of 2023.
