Regulatory Update - Meatconference

Regulatory UpdateMark Dopp – Senior Vice President, Regulatory and Scientific Affairs/General Counsel,North American Meat InstituteAndy Harig – Vice President, Tax, Trade, Sustainability & Policy Development, FMIMonday, March 2, 20202:45 PM – 3:45 PM

Topics Proposition 12 Salmonella Alternative Proteins

Proposition 12

Proposition 12 Prohibits confining “covered animals” in California “in a cruel manner” “Covered animal” – veal calf, breeding pig, or egg-laying hen kept on a farm “Confined in a cruel manner” includes confining so the animal cannot liedown, stand up, extend its limbs, or turn around freely 43 square feet usable floor space – veal calves (in effect today) 24 square feet usable floor space – breeding pigs (2022)

Proposition 12 Prohibits the sale of whole veal meat, whole pork meat, eggs (shelland liquid) from covered animals “confined in a cruel manner.” “Whole” pork/veal is “uncooked cut” of pork/veal “comprised entirelyof” pork/veal, except for seasoning, curing agents, flavoring,preservatives, and similar additives “Combination food products” -- soups, sandwiches, pizzas, hotdogs,or similar processed or prepared food products are exempt

Proposition 12 Alert!!Sale prohibition extends to meat from the offspring of sows confined ina “cruel manner.”

Proposition 12The sale restriction imposes the confinement requirements on farmsoutside California if the relevant meat products from animals raised onthose farms are sold in California

Proposition 12 Meat Institute filed lawsuit challenging constitutionality of Prop 12(Central District CA) Discriminates against out of state producers – impermissible leveling effect(six years for CA producers to adapt to turnaround provision) Extraterritoriality – no legitimate food safety risk and controls conduct whollyoutside CA Unduly burdens interstate commerce – substantial cost burdens with nolegitimate local benefits

Proposition 12 Preliminary Injunction motion denied Appealed to United States Court of Appeals for the Ninth Circuit Separate lawsuit filed by NPPC and AFBF (Southern District CA)

Proposition 12 California Department of Food and Agriculture Rulemaking September 1, 2019 deadline missed December 24, 2019, Draft Proposed Rules – burdensome regulatoryenvironment

Proposition 12 Facility registration Truck inspection – detention, diversion, seizure? Livestock production facility certification Accreditation of certifying entities

Salmonella

Salmonella New performance standards proposed for beef and coming for pork Petition at FSIS asks that 31 serovars be declared adulterants in meatand poultry products.

Salmonella Marler petition Contends Salmonella doesn’t occur naturally in final products.Cites outbreak history.Cites recalls related to foodborne illness.Cites studies that Salmonella is more resilient to heat than previouslythought. Cites prevalence and severity of cross-contamination, primarily due to poorsanitation and cooking practices among consumers. Asserts consumer education on sanitation and cooking practices has failed.

Alternative Proteins

Cell-Based Products FDA oversees cell collection cell banks cell growth and differentiation “transition” during “cell harvest stage” USDA oversees production and labeling of “food products derivedfrom the cells of livestock and poultry”

Plant-Based ProductsWhere the Action is

Plant-Based Products Several “traditional” meat and poultry companies are producing andmarketing plant-based protein products One startup engaged had an IPO A number of restaurant chains, traditional and quick service, addedplant-based products to menus and plant-based products have madeinroads in some retail grocery chains.

Plant Based ProductsDevelopments Key issue -- nomenclature Nomenclature prompted 11, 12, 13, and counting states to enact laws toregulate labeling alternative products – and more being considered (CO, MD, . Legal challenges: Missouri, Arkansas, Mississippi, next? Proliferation of plant-based products prompted bills in Congress -- House andSenate (Real Meat Act) Plant-Based Food Association published a nomenclature guide

The GoalEnsuring a Level Playing Field

Questions?

“Covered animal” –veal calf, breeding pig, or egg-laying hen kept on a farm “Confined in a cruel manner” includes confining so the animal cannot lie down, stand up, extend its limbs, or turn around freely 43 square feet usable floor space –veal calves (in effect today) 24 square feet usable floor space –breeding pigs .