The Facts Behind Mandatory Country of Origin Labeling
Don’t consumers have a right to know where their beef comes from? This rhetorical question was the standard argument used repeatedly by proponents of Mandatory Country of Origin Labeling (“M”COOL). That argument sounds good on the surface and garnered much of the current support for “M”COOL but this issue goes much deeper than consumers having the right to know where their beef comes from. The concept is easy to support but implementation, enforcement, and cost/benefit questions remain mostly unanswered.
Ironically, the same proponents of “M”COOL who insisted on consumers knowing which beef was from cattle that were exclusively “Born, Raised, and Slaughtered in the U.S.” are also telling USDA not to burden them with traceback on their cattle to verify the claims on the label. Talk about wanting your cake and eating it, too. I wonder how many consumer groups are aware of this effort to water down the enforcement aspects of this labeling law? It’s also ironic that those who claim to be in the cattle industry and not the beef industry are telling those in the beef industry how to market beef.
Foreign Beef Small Percentage
Let’s forget the standard arguments for a moment and focus strictly on the facts of this legislation. The first important fact to consider is that only an estimated 5% of our current beef consumption in the U.S. would be labeled as “foreign beef” under this law. The balance would be either labeled as “Product of U.S.” or “U.S. Beef” or it would be exempt from labeling. Nobody knows what the future of trade holds but this is the situation with normal trade with Canada and Mexico.
Recent figures from USDA show that 20% of our domestic beef consumption is imported beef and live cattle. Of this 20%, 75% of these imports end up in “food service” where they would be exempt as written in the “M”COOL law.
A large percentage of our beef imports are lean trimmings from Australia and New Zealand that we blend with our surplus 50/50 trim to add value to it. Over 90% of these trimmings find their way to the food service (hotels, restraunts, and institutions) industry. Food service establishments such as McDonalds, Taco John’s, Pizza Hut, and many others, which constitute around 50% of our total beef consumption, will be exempt from this law. The entire poultry industry is also exempt from “M”COOL as it’s been proposed.
The “food service exemption” is a primary reason that “M”COOL got as far as it did. Logistically, it would be quite a challenge to label every McDonalds hamburger, label the meat on every Domino’s pizza, label the meat in every Taco John’s taco, and label every Ball Park hot dog even if the consumer was asking for it. They obviously are not.
What does this “food service exemption” mean in regard to “M”COOL? It means that currently, only 5% of our total beef consumption in the U.S. would be labeled as “foreign beef” under this law because of this exemption. (That is, providing that the remaining 5% is not also channeled toward food service). For that reason, under the current import situation, most consumers will not have the opportunity to make a choice between foreign and domestic beef even if this law was enforceable.
Of the small percentage of beef that might currently be labeled as “foreign beef’, most would be from Canada and Mexico. Canada currently has a source verification system that helped them to trace their recent BSE situation. They have a consumer safety edge from that standpoint. In contrast, Mandatory ID was specifically forbidden from our Country of Origin Labeling law.
Canada and the United States have been trading genetics for years making Canada’s beef quality every bit as good as our northern cattle. Their carcass data confirms this. To suggest otherwise is to ignore the facts. In regard to Mexican beef, considering the percentage of our population that is Hispanic, it’s doubtful that they would shy away from the sliver of beef that is labeled as being born in Mexico and fed in the United States.
Enforcement an Issue
Next, let’s look at the enforcement aspects of this law. As mentioned previously, the same proponents of this law that said “consumers should have the right to know where their beef comes from”, are also telling USDA that they do not want to be burdened with traceback to prove origination. This has been one of the most deceitful tactics used by the proponents of this law. Without proper enforcement and an adequate traceback system, the food safety value that this law supposedly provides is questionable.
“M”COOL proponents only wanted imported animals to be tracked and the balance to be “presumed” as U.S. origin. The problem with that idea is that the law clearly states that “any person engaged in the business of supplying a covered commodity to a retailer shall provide information to the retailer indicating the country of origin of the covered commodity”. Nowhere does the law suggest that only imported animals would be tracked.
There are also trade laws to consider regarding the marking of imported animals. Proponents of this law keep throwing out the “presumption of US origin” argument as an alternative to traceback of domestic cattle when USDA has stated clearly that “presumption of US origin” is not an option due to the constraints of both laws.
Some have contended, based on their interpretation of the law, that only retailers would need to provide information and that live cattle are not a covered commodity therefore should not fall under the guidelines of proving origination. Consider that these same proponents of “M”COOL insisted on proving which beef was from cattle that were exclusively “Born, Raised, and Slaughtered in the U.S.”.
The intent of this law was quite clear when it was written. It becomes obvious that neither a retailer nor a processor can determine the origin of the beef without also determining the origin of the cattle the beef came from. After all, beef is not “Born, Raised, and Slaughtered in the U.S.”, live cattle are. There’s no way around the initial intent of this law despite the best efforts of those who are against a traceback system to verify the claims of the label.
The USDA Grain Inspection, Packers and Stockyards Administration (GIPSA) has also stated that processors are within their legal rights to require information from producers to verify the origin of the cattle and understandably so as there is no other way to substantiate the origin claims of the label without verification as this law is written.
What we ended up with is a law that must prove which cattle were “Born, Raised, and Slaughtered in the U.S.” without adequate enforcement to substantiate the claims of the label because Mandatory ID was prohibited. Where’s the logic in that? You tell me! Proponents have viewed additional efforts to water down the enforcement aspects of this law as a positive step. This law is flawed and deceptive by not offering consumers what it had originally implied.
Affidavits are Inadequate
Some have suggested that if “Presumption of U.S. Origin” is not an option, then producers should be allowed to use signed affidavits to verify the origination of their cattle. It’s highly unlikely that consumers would ever allow labeling claims to be verified solely based on a signed affidavit without some sort of traceback system.
Even if consumers would be willing to accept labeling claims based solely on a signature, this still requires a change in the law as it is currently worded. From history, we know that a signature is only as good as its enforcement. The LMA’s checkoff petition drive revealed this when it was proven that 33% of these signatures were fraudulent.
If producers could positively identify their livestock based solely on a signature, we wouldn’t need brand inspection anywhere. Those of us who live in brand inspection areas know that signed affidavits, without a brand to verify the affidavit, wouldn’t be effective from an enforcement standpoint.
It’s interesting to note that those who have liability concerns with traceback do not have liability concerns about signed affidavits. If they are equal in their ability to verify a label from an enforcement standpoint, one has to ask why the preference for one over the other? Either “signed affidavits” are verifiable proof to back the claims of a label or they’re not! I think the answer is obvious!
Just as interesting is the fact that those who claim that packers are trying to hide foreign beef behind the USDA inspection stamp are now trusting packers enough to correctly label imported beef with only a signature as verifiable proof. There is no consistency in the arguments of the proponents of this law.
Branding could be used as a means of source verification but not all states or areas have brand inspection and there is duplications of brands between states. Either way, this only tracks the cattle, not the estimated 300 packages of beef that these cattle may become.
Proponents of “M”COOL continually attempt to equate “M”COOL to the school lunch program when the requirements for origin of the two are not the same. In the COOL law, to be designated as U.S. origin requires meat products to be from cattle, hogs, and sheep that are born, raised, and slaughtered in the United States. In contrast, USDA's commodity procurement program requires meat products to come from U.S. produced livestock which excludes only imported meat and meat from livestock imported for direct slaughter.
The Inevitable “Blame Game”
The USDA is the agency that is in charge of implementation and enforcement of this law. Many want to blame USDA for not being able to implement this law as proponents had intended but when you read the law, it becomes obvious that this law would be very difficult to enforce as it is written. If the law allowed it, tracking imported cattle to the packing plant is not the problem. The problem is when you try tracking an estimated 300 packages of beef from an imported carcass that end up being shipped to various destinations with packages of beef of mixed origin without a mandatory ID system.
The wording on the label has to be substantiated with adequate enforcement. One solution to this, providing that the law as written is changed, might be for processors to schedule cattle that were not “Born, Raised, and Slaughtered in the U.S.”, only on certain days. This would create slaughter scheduling problems of scheduling enough foreign cattle to maintain plant flow. Another potential solution is DNA testing to match the package with the cattle that the beef came from but at this point DNA testing is cost prohibitive.
Certainly with modern technology these carcasses and the beef products that they become can be traced but the first question that must be asked is, will this tracing mechanism be enforceable to assure consumers of the validity of the label? The second question that must be asked is will the expenses of differentiating 5% of the beef be worth the costs of labeling all the beef and the costs of implementation and enforcement? Those questions have not been answered adequately for beef producers.
Consumer Loyalty to US Products Questionable
NCBA supports voluntary Country of Origin labeling. The justification being to allow any potential consumer demand for U. S. BEEF, to drive the market needs rather than another government mandate. I know of two source verified “US BEEF” products currently in production neither of which are realizing any noticeable premium above commodity beef prices. There has not been any evidence provided to suggest that consumers are willing to pay enough more for 95% of the U.S. labeled commodity beef to offset the costs of labeling all beef.
Proponents of “M”COOL have used a study from CSU as proof of consumer’s willingness to pay more for U.S. BEEF. CSU later responded to this misinterpretation of their study by suggesting that Country of Origin was not a priority with most consumers when compared to other issues such as price, flavor, tenderness, etc . Consumer purchases of New Zealand lamb and Argentina Grass Fed Beef are two examples of how consumers are not always as loyal to U.S. products as we would hope. All the foreign products that surround our daily lives including our clothes is also proof that we are not always as loyal to domestic products as we would like to believe. In comparing what consumers say and what consumers do, one finds out that “talk is cheap”!
It’s interesting to note that those who claim that the packers and retailers do not pass on the benefits of the beef checkoff are suggesting that packers would pass on the benefits of “M”COOL. Can’t have it both ways.
Costs to implement “M”COOL
The last issue of contention is what will the “M” COOL implementation costs be? Numerous cost estimations have been presented but all are just educated guesses. Suspiciously absent from these cost estimates is one from those who are pushing hardest for this law. Costs will no doubt raise and lower according to the accountability that is required in verifying the label. If the enforcement aspects of this law are reduced to signed affidavits, of course the costs will lower but so will the consumer confidence in the validity of the label.
What we know for sure is that there will be costs and those costs are always passed down the line to the producer. To think that the processors and retailers will absorb these extra costs without passing them on to the producers in the form of lower cattle prices is foolish.
So what is the solution to making this flawed law work? One suggestion is for “M”COOL proponents to step up to the plate, change the law, and allow for source verification to substantiate the claims on the label which would give consumers and producers food safety value. This would allow traceback for disease and food safety reasons, it would allow us to remain competitive with our export markets, and it would still allow differentiation of the 5% of our current U.S. beef consumption that might be labeled as imported. This is the common ground between the polarized sides of this issue. This would benefit consumers but the benefits to producers is certainly questionable.
If an enforceable traceback system is not an option, the second suggestion is to get rid of this flawed law and let the free enterprise system do what it does best and keep further government regulation out of our industry.
Either consumers have a right to know where their beef comes from by making this law enforceable or they don’t. Either producers who want to differentiate foreign products are willing to stand behind this desire by proving it, or they’re not. If this law is not enforceable, it offers nothing of value to the consumers and burdens producers with additional expense and yet another governmental intervention into our lives.
I support consumers knowing where their beef comes from, both foreign and domestic beef, if that is what they desire but I will not support interfering with the consumer’s ability to verify the claims on a food label nor USDA’s ability to enforce it. Our customers deserve better than that!