USDA Misses Mark with “Product of the USA” Rule~Commentary by Bill Bullard, R-CALF

The agricultural press is all aflutter over the earth-shattering news that the U.S. Department of Agriculture (USDA) is going to redefine the standards for affixing a voluntary “Product of the USA” or “Made in the USA” label on meat, eggs, and poultry in a newly proposed rule.

The stated purpose of the new voluntary standards is to put a stop to the current policy that allows imported beef, for example, to bear a “Product of the USA” label so long as the foreign beef was repackaged in the United States. In other words, the current standard allows a U.S. packer to import a big box of beef from Uruguay, to take the foreign beef out of the big box, put it in a smaller package, and then affix a “Product of the USA” label on the smaller package containing the Uruguayan beef.

The proposed rule would supposedly stop this deceptive practice by reserving the “Product of USA” and “Made in the USA” labels only for meat that is born, raised, slaughtered, and processed in the United States. We view this portion of the proposed rule as a good thing because it stops the deceptive practice of putting the USA label on foreign meat.

But in addition, the proposed rule would allow the term “United States” on a package of foreign beef so long as the label describes the processing steps completed in the United States. Here’s the example provided by the USDA. The agency said it could approve a label that states, “Sliced and packaged in the United States using imported Pork.” From here on I’m going to substitute the term “Pork” with “Beef.”

Now wait a minute. The current deceptive standard allows a U.S. label if a foreign beef product is repackaged in the United States. And now the proposed rule will allow the term “United States” on a label provided it was sliced and packaged in the United States, and so long as the label also states the package was “using” imported beef. 

Think about this: Do you “use” imported beef to slice and package? Or do you slice and package imported beef so you can “use” the term “United States” on the package? And why isn’t the name of the foreign country required to be on the package as well?

I think this loophole was written into the proposed rule so foreign beef can continue to be labeled with the term “United States.” It’s my belief that the term “United States,” however it’s used on a package, will conjure up a sense of national pride in the minds of shoppers. And busy shoppers are likely to see the term “United States” and not read any further.

This is a phycological marketing tactic. If a shopper is predisposed to prefer a product produced in the United States, then just the term “United States” viewed anywhere on the package is likely to be enough to cause the shopper to select the product for purchase. To make matters worse, this sliced and packaged foreign beef will also be labeled with a USDA inspection stamp. So, shoppers will see both the term “United States” and the USDA inspection stamp.

So how do we correct this? 

Well, the easiest thing to do is to tell Congress to reinstate mandatory country of origin labeling or MCOOL for beef by enacting the American Beef Labeling Act (S.52), and to tell the USDA to enforce the regulations implementing the Tariff Act of 1930 that requires imported product to retain its foreign label unless the product was substantially transformed in the United States.

Let’s walk through this. When the mandatory country of origin labeling law included beef, which was the case until Congress repealed MCOOL for beef in 2015, imported beef was required to retain its foreign country of origin label through retail sale. This is why the mislabeling of foreign beef with a “Product of USA” label did not occur when MCOOL was in place.

And that’s why the most effective way to correct the misuse of the USA label is for Congress to restore MCOOL for beef.

Further, because the regulations implementing the Tariff Act of 1930 require imported products to bear its foreign country of origin designation unless the product has been substantially transformed, the enforcement of this regulation would prevent the nondisclosure of the specific country from which the product was imported.

By now you’ve probably figured out that R-CALF USA does not like this proposed rule. We view it as a distraction from the real solution – the swift enactment of the American Beef Labeling Act and the proper enforcement of the Tariff Act of 1930. So why is Congress dragging its feet on MCOOL and allowing the USDA to carve out loopholes for the multinational beef packers at the expense of U.S. consumers? I’ll let you answer that question.

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