Right before Thanksgiving, while Congress
was on break, federal meat labeling regulations took effect that could
result in Americans paying higher prices on everything from beef and
pork to apples and maple syrup. While legislators, as part of the
continuing farm bill negotiations, are considering a fix to the Country
of Origin Labeling (Cool) statute, the regulations implementing it went
into effect Nov. 23.
The new Cool rules
require more detailed labels on meat derived from animals born outside
the United States. Labels must now list the country in which livestock
were born, raised and slaughtered. For example, a package of rib-eye
steak might be labeled: "Born in Canada, Raised and Slaughtered in the
United States."
The previous Cool rules
required less detailed labeling, such as "Product of Canada and the
United States." Ironically, the U.S. Department of Agriculture issued
the new rules in May in an effort to improve the previous Cool rules,
which the World Trade Organization last year ruled discriminated against
Canada, Mexico and other U.S. trading partners.
Not
surprisingly, Canada and Mexico are also fighting the new, more
stringent rules at the WTO. Should the trade organization rule in their
favor, our North American neighbors will likely retaliate against U.S.
products through tariffs that will limit U.S. exports and kill American
jobs. Canada, the second-largest export market for U.S. agricultural
products, valued in 2012 at $20.6 billion, already has a preliminary
retaliation list that includes fresh pork and beef, bakery goods, rice,
apples, wine, maple syrup and furniture.
U.S.
cattle ranchers and hog farmers who purchase livestock from Canada or
Mexico will be affected by those retaliatory tariffs in a number of
ways. Most crucially to those of us in the industry, the duties will
prompt U.S. beef and pork exports to fall while American farmers and
ranchers who import animals will see significant cost increases.
Alpha
3 Cattle Company in Amarillo, Texas, for example, imports roughly
38,000 feeder cattle a year from Mexico. When the original Cool law took
effect in 2009, meat packers, fearing consumers would be less inclined
to buy meat labeled "Product of Mexico and the United States" and
incurring added costs to label mixed-origin meat, discounted Alpha 3's
Mexican-origin animals by $35 a head. That alone cost Alpha 3 more than
$1 million.
Under the new Cool
regulations, the company expects the discount to be even higher, or for
packing plants to stop processing Mexican-born cattle altogether. Why?
Because under the new regulations those animals—and the meat from
them—now need to be tracked, verified and segregated from U.S.-born
cattle. (The 2009 law allowed co-mingling of animals.)
A
Michigan hog farmer who gets most of his feeder pigs from Canada, and
who took a financial hit when the labeling law took effect in 2009, has
been told by the packing plant to which he sends his animals that he'll
have a 10-hour window each week to get his Canadian-born hogs to market.
That will be nearly impossible to accomplish—it's 32 truckloads—and it
will be extremely costly.
That's because
the new regulations will force the packing plant to shut down the lines
processing U.S.-born hogs and switch to processing Canadian-born
ones—which spend five of their six months in the U.S.—so that pork cuts
can be tracked, labeled and kept separate. That's a logistical headache
and a huge expense for the plant, which will likely pay the hog farmer
less for his Canadian-born hogs and charge consumers more for the meat
from those animals.
So why is the U.S.
risking trade retaliation and prohibitive cost increases on American
producers and consumers of meat? Groups that support Cool, such as the
U.S. Cattlemen's Association and the Consumer Federation of America,
think U.S. consumers will buy American if they see a "Product of the
United States" label. But since the 2009 law went into effect, the USDA
says there's been little effect on demand for U.S. meat, and that
consumers buy primarily based on taste and price. Most Americans know,
even if their legislators don't, that all meat products, regardless of their country of origin, must pass the same USDA safety regulations.
When
the Cool proposal was first debated in Congress, the U.S. meat industry
said it would be a costly program with little if any benefit to
consumers. The USDA estimated it would cost $2.5 billion to implement
and nearly $212 million annually over 10 years to maintain.
With
our North American neighbors set to impose tariffs on dozens of U.S.
products, livestock producers and meat packers facing greater costs and
American consumers ultimately bearing higher prices, it appears that
assessment was an understatement.
Mr. George
is a cattleman from
Cody,
Wyo., and president of the National Cattlemen's Beef Association.
Mr. Spronk
is a hog farmer from
Edgerton,
Minn., and president of the National Pork Producers Council.
Wall Street Journal
Wall Street Journal
1 comment:
Eat more road kill!
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