Beef Buzz News
Ross Wilson Urges Cattle Producers to File Comments NOW on Mandatory COOL Rule
Tue, 09 Apr 2013 16:07:52 CDT
USDA's Agricultural Marketing Service released its revised rule regarding COOL March 8. This action is in response to the World Trade Organization's ruling last year that COOL violated U.S. obligations under the WTO Agreement on Technical Barriers to Trade. The WTO set May 23, 2013 as the date by which the United States needed to come into compliance with the ruling or Canada and Mexico would be allowed to retaliate. It appears that the USDA is proposing changes that impact how product is supposed to be labeled. The deadline for public comments to the proposed rule is midnight eastern time on Thursday, April 11, 2013.
We have discussed the M-COOL proposal with Ross Wilson, the President and CEO of the Texas Cattle Feeders Association- and our conversation can be heard by clicking on the LISTEN BAR below.
Here are the labeling requirements under the current COOL program:
Category A - U.S. Origin (Product of the U.S.) Muscle cuts of beef and veal must be derived exclusively from animals born, raised and slaughtered in the U.S. (including animals born and raised in Alaska and Hawaii and transported for a period of time not more than 60 days through Canada to the Unied States and slaughtered in the United States). This product can be labeled "Product of the U.S."
Category B - Multiple Countries of Origin that include the U.S. If an animal was born, raised, and/or slaughtered in the U.S., and was not imported for immediate slaughter, the origin of the resulting meat products derived from that animal may be designated as Product of the U.S., Country X, and (as applicable) Country Y. Country X (and, as applicable Y) may represent the country the animal was born in and/or raised for a portion, but not all, of its life). Due to additional flexibility added in 2009, most labels say "Product of the U.S., Canada or Mexico."
Category C - Imported Direct for Slaughter If an animal is imported into the U.S. for immediate slaughter (spends less than two weeks in the U.S. before being processed), the origin of the resulting meat products derived from that animal shall be designated as "Product of Country X and the U.S.". Category C cattle may be comingled with category B cattle during processing. This flexibility was also intended to be used at the end of a production day shift to finish out the shift and ensure efficiency of the line. In this instance of commingling with category B beef, the product may be labeled as Product of the U.S., Country X, and (as applicable) Country Y. This is the same labeling method used for Category B, and the placement order of the countries on the label may be in any order desired by the retailer.
Category D - Imported Beef Boxed beef imported into the U.S. must be labeled with its country of origin before it comes into the U.S. as required by U.S. Customs and Border Protection.
Under the proposed rule change, the country of birth, raising and processing will now have to be used for all categories. For example:
Former Category A label must read "born, raised and processed in the United States."
Former Category B label must read "born in Mexico (or Canada), raised and processed in the United States."
Former Category C label must read "born and raised in Canada, processed in the United States."
Former Category D label must read "born, raised and processed in Australia." (or any other applicable country.)
TCFA and the National Cattlemen's Beef Association oppose the new rule.
TCFA and NCBA have maintained that there is no regulatory fix that can be put in place to bring the current COOL rule into compliance with the WTO obligation or that will satisfy our top two trading partners: Mexico and Canada.
TCFA has released a suggested letter to opponents of the proposal- and urge that the letter be personalized and sent to USDA before the Thursday night deadline. To submit comments electronically- click here for the portal that will allow you to do so.
Here is the text of the letter that has been suggested:
Julie Henderson, Director
COOL Division, Livestock, Poultry, and Seed Program
Agricultural Marketing Service
U.S. Department of Agriculture
Stop 0216 / 1400 Independence Avenue, S.W., Room 2620-S
Washington, DC 20250-0216
Re: Docket ID No. AMS-LS-13-0004
RIN 0581-AD29
Director Henderson:
I appreciate this opportunity to provide comments concerning the proposed rule on mandatory country of origin labeling (MCOOL) for beef and other products (Federal Register Notice March 12, 2013; pgs. 15645-15653). We urge USDA to withdraw the proposed regulations, which will significantly increase costs for cattlemen and others in the beef sector without any commensurate benefits.
USDA states in the proposed rule that it "has been unable to quantify incremental economic benefits... and requests data, most notably detailed data or studies on the value to consumers of having COOL information." To date, no one has documented any benefits to U.S. beef consumers or producers from MCOOL. Much to the contrary, Kansas State University published the most recent economic analysis in November 2012, Mandatory Country of Origin Labeling: Consumer Demand Impact, confirming yet again that there have been no economic benefits and only added costs from implementing MCOOL as noted in the following excerpts:
Given the costs of compliance introduced by MCOOL and no evidence of increased demand for covered products, our results suggest an aggregate economic loss for the U.S. meat and livestock supply chain spanning from producers to consumers as a result of MCOOL implementation.
Across a series of demand system models estimated using retail grocery scanner data of MCOOL covered products, changes in consumer demand following MCOOL implementation were not detected.
In our in-person and online based assessments, we obtain the same conclusions whether evaluating beef steak, pork chop, or chicken breast products there was no change in demand following implementation of MCOOL.
The overriding finding of limited awareness of MCOOL, narrow use of origin information in purchasing decisions, and no evidence of a demand impact following MCOOL implementation is consistent with the argument that voluntary labeling by country of origin would have occurred if it were economically beneficial to do so.
These results are exactly what were anticipated for all sectors of beef production and marketing a decade ago when MCOOL was first introduced. The proposed regulations will only add hundreds of millions of dollars in extra costs without increasing demand for U.S. beef or prices for U.S. cattle. The proposed regulation will provide no value to consumers or U.S. cattle producers and only add additional costs to the entire production and marketing system.
USDA addresses the increased cost of labeling and recordkeeping created by the proposed rule but fails to recognize other, more significant compliance costs associated with increased segregation of both cattle and product by beef packers and processors. However, under the proposed regulation there is an intermediary step that will require the segregation and identification of all individual animals and related products for each origin in order to properly label each product. The costs associated with this intermediary step will be devastating to many cattle feeders and packers. Given the precarious financial situation of many feeders and packers, additional costs of implementing the proposed rule could lead to additional closures of feedyards and packing plants.
MCOOL has cost U.S. beef consumers and U.S., Mexican and Canadian cattle producers hundreds of millions of dollars in increased costs with no benefit of increased demand and resulting higher prices for U.S. beef. MCOOL has not produced any benefits for U.S. origin cattle as proponents promised. In fact, it has accomplished the complete opposite, adding unnecessary costs throughout the production chain, confusing consumers and antagonizing the two largest importers of U.S. beef, Mexico and Canada.
It is also important to note that imported Mexican cattle enter the U.S. at an early age and corresponding light weight and achieve the great majority of their market value while owned by U.S. cattlemen, grazed on U.S. pastures and fed in U.S. feedyards. One could easily argue that the beef produced from these imported cattle could be treated as U.S. beef, since the value of the imported animal is relatively de minimis compared to the retail value of the beef from the finished animal once it undergoes substantial transformation into fed beef in the U.S.
Based on the WTO ruling, I strongly believe that the only available corrective action is for Congress to amend the MCOOL statute. I urge USDA to withdraw the rule. Cattle feeders will suffer even more economic losses if the proposed rule is implemented.
Sincerely,
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