Farmers, activists and investors are at odds over the treatment of pregnant pigs

In West Liberty, Iowa, Mike Deahr houses his 3,000 breeding pigs in small pens that prevent them from turning around and interacting with others for the first 28 days of their 115-day gestation.

Whether these pens represent the best way to protect pig health or the mistreatment of endangered animals is at the center of a debate over how pigs are kept in the $43 billion pork industry.

The state of California, animal rights groups like the Humane Society of the United States and billionaire investor Carl Icahn are putting pressure on fast-food giants like McDonald’s corp

Meat packers and pig farmers like Mr. Deahr to give pregnant pigs more space.

Animal welfare advocates say the stalls confine sows so much that they can barely turn around or walk.

“You can only stand, eat and lie down on a hard, bare floor,” said Bon Appétit Management Co. chief strategy and brand officer Maisie Ganzler. Ms. Ganzler, one of Mr. Icahn’s two nominees, the McDonald’s board of directors said in his proxy -Competition that switching to pork raised outside of crates has recently increased costs for their institutional catering business, but the move is in line with what their customers want.

Pork producers and suppliers resist, saying such moves would raise meat prices by causing farmers to spend millions of dollars changing their operations, creating chaos in the supply chain and endangering the health of their pigs.

Sows are aggressive animals, said Mike Paustian, a sixth-generation farmer just off Interstate 80 in Walcott, Iowa. The boxes prevent them from fighting each other and prevent larger sows from stealing feed from smaller ones. They can also prevent accidents when a worker gets caught between two fighting pigs, he said.

“Farmers have tried different types of housing over the years. With individual gestation stalls, you can better monitor individual sows,” said Mr Paustian, who sells his hogs to Tyson Foods inc

and Smithfield Foods Inc.

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About 30 miles west, Mr. Deahr sells his hogs to Tyson Foods, but another large meat packer recently approached him with an offer to pay him an $8 per hog premium for not using gestation crates, he said. While it’s a good offer, Mr Deahr said he couldn’t accept it because of his own animal welfare concerns. The stalls are needed to protect the sows for at least six days when they are most aggressive, he said.

“It is my oath to take care of these animals,” he said. “That will not change for any money.”

A California law passed by voters in 2018 and backed by the Humane Society is transforming some farmers. The law, called Proposition 12, requires breeding pigs to be able to lie down and roll over in rooms where they are housed and essentially bans pork, which is produced in small gestation pens under most circumstances. Under the measure, Mr. Paustian’s pigs were not allowed to be marketed in the nation’s most populous state.

Supermarkets and restaurants violating the law could face fines of up to $1,000 or up to 180 days in prison, according to the California Department of Food and Agriculture. A recent order issued by a California judge delayed application of the law to California retailers until six months after state officials drafted regulations not currently in effect to implement the law, which went into effect on January 1. The California law has met with opposition from the meat industry, grocers and other grocery retailers since voters approved it in 2018.

The National Pork Producers Council, a Washington-based lobby group representing pig farmers, filed a lawsuit in the federal appeals court in San Francisco in June 2020, saying California cannot regulate how pigs are raised in other states. The Supreme Court is considering whether to hear the case.

As advocates and investors like Mr. Icahn draw attention to the issue, hog farmers said they face a choice about whether to spend millions of dollars to transform their operations. According to agricultural lender Rabobank, only about 7% of sow stalls in the US meet California’s Proposition 12 standards, up from about 4% in January 2021.

Mr Paustian said he would need to spend about $1 million building a new barn to make the changes campaigners want. Many producers are not willing to take that risk, he said.

Despite rising wholesale pork prices, higher feed, labor and material costs have weighed on hog farmers in recent months, said Lee Schulz, a rancher at Iowa State University. Iowa State University estimates that producers in Iowa have been unprofitable for three straight months.

Getting rid of gestation stands can make hog farmers less efficient, said Stewart Leeth, chief sustainability officer of Smithfield Foods, the largest US pork producer. Farmers would need to house fewer pigs in their barns to meet the need for larger square feet, he said.

Tyson Foods, which buys hogs from hundreds of independent farmers, said its growers are choosing their sow housing systems, with a growing number switching from gestation pens to gestation pens, a spokesman said. More than 20% of Tyson’s total pork supply comes from free-range sows.

Niman Ranch, a pork supplier that doesn’t use gestation stalls, said it can do so without sacrificing productivity. Chris Oliviero, the general manager of Niman, a unit of poultry processor Perdue Farms Inc., said it’s been a long time since companies began committing to phase out pork in stalls a decade ago, and Proposition 12 for compliance with new breeding rules was correct.

“I think the industry has to be behind it,” said Mr. Oliviero.

Smithfield Foods, a supplier to McDonald’s, tried to address sow housing in 2007 and spent approximately $360 million between 2007 and 2018 to build group housing systems for pregnant sows on all of the company’s US farms. The Humane Society at the time praised Smithfield’s plan, Mr. Leeth said. The company is owned by Hong Kong-based pork conglomerate WH Group GmbH.

still uses gestation crates for its pigs in the first few weeks of gestation, but activists are now criticizing the 2007 plan, Mr Leeth said.

“It looks like the goalposts have been moved,” he said.

write to Patrick Thomas at Patrick.Thomas@wsj.com and Heather Haddon at heather.haddon@wsj.com

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