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Livestock industry bracing for U.S. COOL

PORKER

Well-known member
Livestock industry bracing for U.S. COOL
Alana Vannahme 4/29/2008 3:10:00 PM

(Resource News International) -- Facing the U.S. government's inevitable implementation of country-of-origin-labelling (COOL) this coming fall, the Canadian livestock industry is preparing itself as best it can given the uncertainty surrounding the controversial legislation, according to industry sources.

When COOL is implemented in October, the Canadian livestock industry has made it clear it would prefer it were the amended version introduced in 2007 as part of the latest U.S. Farm Bill.

Compared to the original legislation, introduced in the 2002 Farm Bill, the newer version is seen as far more "user-friendly," less rigorous in terms of its requirements and compliance enforcement.

The newer version has not yet been passed, however, as the omnibus 2007 U.S. Farm Bill has stalled due to disagreements between the U.S. Senate, Congress and the Bush administration. Until now, the 2002 Farm Bill has simply been extended.

That being the case, the industry is uncertain as to which version will eventually become law.

One possibility, according to Andrew Dickson, general manager of the Manitoba Pork Council, is that a farm bill will be passed containing all of the issues on which there is agreement, leaving the contentious issues aside for a future bill. A second possibility is that the COOL portion of the bill is simply tacked onto another, unrelated piece of legislation.

A third, less desirable possibility is simply that the original 2002 version will implemented this fall.

Theresa Keddy, communications manager for the Canadian Cattlemen's Association (CCA) in Calgary, said, "Either way something will happen at the beginning of October and if nothing changes, if it doesn't get tacked onto another bill, we could see the 2002 version go through."

In any event, both the cattle and hog sectors are bracing themselves for COOL's eventual enforcement.

A Canadian beef brand

"We would be very foolish to ignore COOL so I think the best thing we can do is to think it will go through in the worst form and to prepare for that," Keddy said.

If shipments of Canadian cattle and beef into the U.S. grind to a halt in October, Keddy said there may not be sufficient slaughter capacity in Canada to absorb the higher amounts of cattle, despite the increased capacity created after the U.S. closed its borders over concerns about bovine spongiform encephalopathy (BSE). The situation is better than it was pre-BSE, she said, but plant closures and reduced kill numbers would limit the capacity.

In any event, the CCA is thinking long-term and is currently developing the Canadian Beef Advantage brand, she explained.

"It will be an overarching brand allowing us to position Canada as a leader in safety and animal health. We want to make a really strong brand that people would start to recognize and over time demand because they know it has been age-verified, source-verified and quality-verified, that sort of thing," Keddy said.

New markets, new clients

Martin Rice, executive director with the Canadian Pork Council in Winnipeg, said similar ideas have been discussed among the Canadian hog and pork sector but he admitted they have yet to be explored in depth.

A premium Canadian pork brand may not be required, however, in order to survive the impact of COOL on the hog/pork industry.

Instead it may be possible to identify new processors willing to accept Canadian animals and new markets not subject to COOL labelling requirements, such as restaurants.

"We're hoping that they will stick to the amendments made to COOL passed at the end of 2007," MPC's Dickson said. "If they go with the dual label concept reading 'Product of the United States and Canada,' I think we can make this work if we can find a retailer prepared to take a dual-labelled product.

"One packer has said they can probably take Canadian origin animals if they're presented to them," he continued.

"I think U.S. processors can still handle all the Canadian pigs they want and they can market them in a way that they would not have to worry about COOL because food services, exports and restaurants do not have to comply with the legislation," Rice said.

Uncertainty hurts

For now, it the uncertainty surrounding COOL rather than the legislation itself that is hurting the livestock industry.

Dale McBurney, owner of a sow- to early-weanling operation in Souris, Man,, said he was recently given two weeks notice by his long-time U.S. buyer that he would no longer be able to accept his animals. The reason, the buyer said, was that his bank didn't want to lend him money on Canadian pigs because they are not sure he is going to be able to market them profitably.

"It's all because of the uncertainty surrounding COOL," he explained. "If we knew how it will affect us, we could adjust and do what we have to do but when it is in limbo everybody is just speculating on what it's going to look like and that is generating uncertainty in the market place. People are backing away and saying they're not able to commit because they're not sure what they're going to be able to do in October."

Rice said the controversial legislation, which was originally aimed toward the Canadian cattle and beef industry and driven by the group R-CALF, is being used as an excuse by U.S. hog processors to gain the upper hand over their Canadian counterparts. They are simply capitalizing on the market advantage handed to them, he said.

Unfortunately for producers such as McBurney, the outcome is the same. He has been left scrambling to secure a home for his pigs. He has found a U.S. buyer willing to purchase his hogs for another 30 days, but only at a fraction of their worth. Five weeks ago he was still able to sell his pigs at $40 apiece. That fell to $20 and again to $10.

He is currently losing $12,000 a week but is happy that for the time being he does not have to kill his pigs or lay off his seven employees.

The short-term deal also gives him time to weigh his options and make a decision regarding the future of his operation, which sells 40,000 pigs per year, he said.

McBurney harbours no ill will towards his U.S. buyer, who he said is just another individual trying to survive the current downturn in the livestock industry. Both sides hope to get back to business as usual once more light is shed on COOL and exactly what it will mean for Canadian producers.
 

PORKER

Well-known member
http://www.organic-market.info/bio-markt/en_inhalte/inh_index.htm?link=Meldungen&catID=0&docID=559

NAIS and COOL in the USA
Source: ScoringAG

There have been many questions about NAIS (National Animal Identification System) and the COOL (Country of Origin Labeling Law).

NAIS is voluntary. The premise has to be registered and name or operation has to be displayed. It provides traceback to the slaughterhouse and is a group ID for livestock. Since it is voluntary, it is not checked upon and enforced. An affidavit is not enough to comply with. No verifiable audit trail is needed with chain of custody nor record storage and archiving is required. It does not cover peanuts, fruit, vegetables or fish.
COOL is mandatory starting September 30, 2008. The premise does not have to be registered, and the name or operation does not have to be displayed. It provides traceback to the retail shelve (field-to-fork). It is an individual traceback, not only for livestock (see ams.usda.gov/cool/records.htm). State officials and AMS-USDA are checking and enforcing the law. An affidavit is not enough to comply with, one needs a unique number, like an ISO RFID number and/or a SSI-EID Code created automatically in the ScoringAG database. Verifiable audit trail is needed with chain of custody, so the retail store can have proper origin labels. Record storage and archiving is required for two years on the farm level up to retailer, and one year for the retailer and all their suppliers. It does also cover peanuts, fruits, vegetables and fish.

As AMS-USDA (Agricultural Marketing Service – United States Department of Agriculture) will start checking the retail stores on October 1, 2008, there are only a few days left to get started with the required recordkeeping for the COOL Law on farm level. Every head of livestock needs to have a form of a unique ID for COOL for easy recordkeeping. The easiest and cheapest way for producers to keep records is with RFID (Radio Frequency Identification) tags and boluses in the ScoringAg database. Producers need to order enough RFID tags and boluses ahead thru December 2008 as there will be a shortage soon, as the tag companies weren’t prepared for it. This has happened in Europe and Australia when the law forced them to ID animals. A FDX ISO standard RFID Eartag with ScoringAg database record is $ 1.98 for limited time. A RFID bolus with ScoringAg database is $ 2.83.

05.04.2008
 

PORKER

Well-known member
Examples of Records Useful for COOL Verification Purposes

The examples of documents and records listed in the AMS tables, although extensive, are not inclusive of all documents and records that may be useful to verify compliance with the Country of Origin Labeling provisions of the Farm Bill. Additionally, maintaining documents and records such as those listed as examples will not necessarily ensure compliance. The documents listed are examples only and are for the sole purpose of providing information for producers, processors, and retailers to consider when establishing records for verification purposes. During a compliance audit conducted by USDA, auditors will review any and all documents to the extent necessary to arrive at an accurate decision on the level of compliance.

Retailers Likely to Shift Liability to Producers
Although retailers are ostensibly the sector that will be held liable by the USDA for non-compliance with the COOL provisions, they will likely attempt to shift their liability and additional cost burden onto their suppliers. Retailers will demand a verifiable audit trail from their suppliers, such as packing houses, who in turn will probably attempt to shift their additional liability and cost burden back up the supply chain to their suppliers, namely, order buyers, stockyards, and farmers. If the added costs of labeling are passed back from the retailer to producers, this could mean that farmers will face lower profit margins.

Indeed, with more than a year to prepare for the mandatory phase of the program, supermarkets and wholesalers are already hearing advice from the Food Marketing Institute (FMI) on how to pass back to their suppliers the costs and liability associated with the country-of-origin labeling requirements. Retailers are being advised to renegotiate buying contracts to require that all products be branded with the country-of-origin information, and that all suppliers maintain “audited proof” of product origin in the event of a government inspection.

According to FMI guidelines, new contracts should also specify that suppliers would be held liable for any fines or other costs incurred by retailers for inaccurate labeling information. Retailers are being told to ask suppliers for results of audits by the USDA or a third party, demonstrating the supplier’s compliance with the new law.
 

PORKER

Well-known member
According to FMI guidelines, new contracts should also specify that suppliers of COOL covered commodities would be held liable for any fines or other costs incurred by retailers for inaccurate labeling information.

Carpenter: Documentation will be absolute for COOL
ROD SMITH, Feedstuffs Staff Editor

DALLAS, TEXAS -- The country-of-origin labeling (COOL) rule will absolutely require documentation and traceability back to the animal of origin for beef, lamb and pork that are marketed at retail stores, according to Barry Carpenter, director of the livestock and seed division of the Agricultural Marketing Service (AMS).

There is no other way to have a credible label, and producers, through their trade associations, need to be getting together with packers and retailers now to develop documentation processes, or there will be animals on the ground and meat in the system that will not qualify for retail labels next year -- regardless of country of origin -- when the COOL rule becomes mandatory, he told Feedstuffs here last week.

Carpenter, whose office developed the current voluntary COOL rule and will write a mandatory rule based on comments submitted about the voluntary program, said AMS considered the verification issue from all sides and determined that COOL is a federal law regulating the retail food industry, that the retail industry is liable for the integrity of labels, or "statements to consumers," and that for those labels to be credible and have integrity, they must be documentable.

At the same time, the law prohibits AMS and the U.S. Department of Agriculture from mandating an animal identification system that would document and trace as to the animal and country of origin but provides that AMS verify the accuracy of origin labels, he said. This puts the onerous on retailers to demonstrate the accuracy of labels, which likely suggests that retailers then will expect packers to provide that documentation, further suggesting that packers will need producers to document where animals marketed to plants were born and raised.

Carpenter said simply tagging animals crossing the borders isn't an alternative because AMS has no authority to mandate an animal identification system, and it would create "national treatment" issues surrounding fair trade with the U.S. where cattle, hog and other live animal exports would be burdened differently from animals born in the U.S. He said this would put the U.S. in violation of free trade agreements.

He said using existing identification programs such as those referenced in the law, e.g., branded programs that are verified by AMS and school lunch purchases, are not alternatives either because they involve USDA acting in a direct oversight role in which animal identification, sealed containers and other "command and control" measures are used that the agency is prohibited from using for COOL verification.

Existing programs also involve considerable documentation and traceability to make sure that packers, processors and their suppliers are in compliance with branded or government purchase rules, he added, explaining that even if permissible, this still would not reduce the documentation requirement.

COOL was written into the 2002 farm law and requires that all fresh muscle cuts of beef, lamb and pork and ground meats be labeled as to the country of origin of the animal, or, in the case of ground product, animals, from which they came (Feedstuffs, Dec. 2, 2002). The law requires that the current voluntary phase that was implemented last September run through Sept. 30, 2004, after which the mandatory rule will take effect. It also covers fish and perishable fruit and vegetables but does not cover poultry.

Law provides clear direction for labels

One of the biggest issues with COOL has become verification -- with traceability back to the farm and producer -- and associated costs -- which AMS, in its paperwork reduction report, put at $2 billion, $1 billion of which would be born by producers -- that supporters of COOL did not anticipate and, in some cases, dismissed as in error and not required.

The two issues have produced storms of protest that AMS is making the rule a burden on producers rather than the advantage that was envisioned for U.S.-origin product and the sobering reality that the rule will become a distraction from efforts to improve production efficiencies and demand for meat.

Carpenter said the law requires that an origin label appear on covered products and that the label imply "a claim" by retailers for which USDA has responsibility to hold them liable. He said this means packers will have to affect claims to retailers, and producers will have to affect claims to packers. The law requires a "paper trail" through the system, he said. "It sets the expectations for certification."

A producer cannot just state that an animal was born and raised in the U.S. but must have documentation, he said. The law provides "very clear direction" that self verification "is not enough to give the (ultimate meat package) label the credibility" to which the consumer is entitled by the law. "It's a retail labeling law."

He said producers who don't want to verify do have the option of selling their animals into the foodservice trade for which COOL does not apply. He cautioned that any deals between a producer and buyer not to verify the origin of the animal but to channel it to the retail trade would be done at their risk.

Retailers who are found in violation of the law will be subject to fines of $10,000 per day per violation, and packers, even if they mistakenly mislabeled a product, will be subject to fines of $11,500 per day and jail.

He said tagging animals at the border also raises the possibility of tags falling off or being removed.

Carpenter said his concern is that producers and their trade associations believe the mandatory rule somehow will come out without documentation requirements and are not preparing now to have a verification process in place. He noted that departmental personnel are going to hundreds of meetings across the country to explain the rule, and "it's clearly our message" that producers, packers and retailers need to get prepared.

"Our mission is to get this law implemented as efficiently and with as much information as possible so that people will be ready," he said.
 

HAY MAKER

Well-known member
Aint that gonna be something,if we get M Cool the cattleman can identify his product.
Then demand the checkoff promote the best beef availible...........home grown in the good ole USA.
good luck
 

elwapo

Well-known member
HAYMAKER
I look forward to the day you have mcool for petroleum so you can salute the maple leaf every time you fill your pickup.
 

HAY MAKER

Well-known member
elwapo said:
HAYMAKER
I look forward to the day you have mcool for petroleum so you can salute the maple leaf every time you fill your pickup.

Yes,and I guess what you would like to see me do next is..........work hard and sell cheap,your packer partners have caused alot of good folks to go under around here,dont blame some of us for fighting back.
good luck
 

HAY MAKER

Well-known member
mrj said:
Haymaker, can't you read, or hear????

The Beef Checkoff IS promoting US beef. and always has!

mrj

Not like they are fixin to ole girl,watch what happens when we get M COOL..................good luck
 

Sandhusker

Well-known member
"One of the biggest issues with COOL has become verification -- with traceability back to the farm and producer -- and associated costs -- which AMS, in its paperwork reduction report, put at $2 billion, $1 billion of which would be born by producers -- that supporters of COOL did not anticipate and, in some cases, dismissed as in error and not required. "

Horsecrap. Pure horsecrap.
 

PORKER

Well-known member
Keeping COOL ;A Progressive Grocer interview with head of Retail group

PG: After several delays, mandatory country-of-origin labeling for fresh produce is set to take effect on Sept. 30, 2008. What would you like the trade to know before that time?

Stenzel: COOL will have a significant impact on our industry. With everything that's happened in the last couple of years, particularly with Chinese imports, there's no going back; it's going to be mandatory. But I expect that it will be phased in without serious enforcement initially.

We published a white paper a few weeks ago that basically gives compliance guidelines to the industry, and that says, "Let's get going, and let's get ready." Wherever you have a packaged or PLU-stickered product, we're advising suppliers to go ahead and put a country-of-origin label on it; that's the most helpful thing for retailers we can do.

But for the bulk and small commodities that can't be packaged or stickered, retailers are going to have to do their part by putting up POS signs and information, which isn't going to be easy. But the more we can simplify the process now, the better. We realize retailers are angry about the law and don't like it, because they don't want to add additional costs to the system that will eventually get passed on to consumers. But our advice is, there's no use trying to buck it -- let's all try to make this as easy as possible.
 

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