WTO to rule on beef, pork labeling mandate
07/06/2014 7:31 AM
08/08/2014 10:25 AM
The steaks you grill this weekend may read “Born in Mexico,” and that’s COOL.
The U.S. Department of Agriculture’s Country of Origin Labeling mandate, dubbed COOL, has sparked a political fight between industry and consumer groups within the United States, and between the U.S. and its neighbors, Canada and Mexico.
The World Trade Organization is close to issuing its latest ruling on whether U.S. rules on COOL comply with trade treaties. If the WTO rules against the U.S., Canada and Mexico likely will retaliate by levying tariffs on a wide variety of U.S. goods that are imported to their markets.
The COOL mandate requires U.S. producers and retailers to tell customers the countries in which their fresh beef and pork were born, raised and slaughtered, or in preferred industry usage, “harvested.” It also bans the co-mingling of beef and pork of different national origins.
So, if your steak comes from a steer born in Mexico, raised on a U.S. ranch and slaughtered at a U.S. packing plant, small letters on the label will read: “Born in Mexico. Raised and harvested in the US.” Most beef and pork sold here is born and raised here, so the labels on fresh beef and pork read “Born, raised and harvested in the US.”
The rules were first issued in 2009, as part of the farm bill, and were challenged by Mexico and Canada as a barrier to trade.
In response, the USDA rewrote the rules to, it said, comply with the WTO. Mexico and Canada challenged the rewrite – which are now in effect in the U.S. and can be seen on fresh cuts beef and pork and on hamburger. If the WTO rules against the U.S. again, any retaliation would take at least six more months go to into effect.
The opponents to COOL include some of the big players in agriculture – for example, the National Corn Growers Association and Tyson Foods. They argue that the mandate adds costs with little benefit to consumers in return. And the rule also means retaliation from Canada and Mexico, who are among the U.S. largest trading partners.
Joining the fight
Groups beyond agriculture, such as the National Association of Manufacturers and the U.S. Chamber of Commerce, also oppose the rules, citing the potential of retaliation. They have asked the U.S. Congress to pass a law to make USDA comply with the WTO.
Kent Bacus, of the National Cattlemen’s Beef Association, the main lobbying group for the nation’s cattle producers and the beef packing industries, said the mandate is expensive without being needed or wanted.
Most consumers don’t care about the country of origin, he said. They care most about food safety and quality, which is overseen by U.S. Food and Drug Administration inspectors in packing plants. Whether the calves are born in Mexico or the U.S. doesn’t really mean anything, he said.
For those who worry about country of origin and are willing to pay for the beef that comes through such a system, he said, the market should be allowed to offer a solution.
“The government shouldn’t be in the business of marketing products,” he said. “We are the ones who have everything to lose. We’re the ones that risk losing if we don’t provide consumers something they don’t want to buy. They want tenderness, taste and price. Where animals are from is pretty far down the list when it comes to actual buying patterns.”
Mike Martin, spokesman for Cargill, which opposes COOL, echoed Bacus’ arguments that the mandate hasn’t created any additional value for anyone.
Cargill has had to modify between 9,000 and 10,000 product labels. COOL also contributed to the closing of Cargill’s packing plant in Plainview, Texas, Martin said. The plant was already challenged by a short supply of beef caused by years-long drought, and the mandate further cut into that supply chain by reducing the number of Mexican cattle sent to the plant.
The USDA estimated that the number of firms affected by the labeling include 2,808 livestock processing and slaughtering firms, 38 chicken processing firms, and 4,335 retailers.
The agency estimated that the combined cost of making the label changes and the cost of segregating U.S. and foreign beef in the packing plants would cost the industry between $53.1 million and $137.8 million.
Those who support COOL say the fight is basically big business vs. the little guy. Consumers want it and so should the nation’s cow-calf operators, they say.
“Consumers are demanding more and more information about their food, where it comes from, what conditions it was produced under and COOL provides another layer of information,” said Ben Beachy, research director for Public Citizen’s Global Trade Watch. “We believe that something as basic as the food you put in your body is something you have a right to know more about.”
Beachy pointed to an April survey by Consumer Reports National Research Center that showed that 92 percent of people said they wanted to know the origin country of their meat, poultry, fish and produce.
“I think if people didn’t care about it, they wouldn’t say they did in survey after survey,” Beachy said.
The fight is really about money, said David Pfrang, an activist rancher from near Goff, Kan. Packers and feeder operations, such as feedlots, like being able to bring in lower-cost foreign calves. It’s the beef industry’s version of outsourcing and they don’t want American consumers to know it. U.S. cow-calf operators are the ones at risk.
“You can buy cheap cows in Mexico and bring them up here,” he said. “Why not get the cheaper product and bring it up here and mingle it with the American … and Americans don’t know what they’re eating. Hey, that’s business.”
Todd Domer, vice president of the Kansas Livestock Association, rejects that argument.
The whole beef supply chain is doing well at the moment because prices are high even as domestic and international demand is strong, he said. COOL will hurt everyone in the industry by provoking retaliation from Mexico and Canada, the second and third largest beef export markets.
“There are times when there is predatory behavior within the industry, where one segment operates at the expense of another, but that’s not the case here,” Domer said. “Everybody loses if demand falls because Mexico and Canada cut their imports.”