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Longcut said:mCOOL doesn't require that?Oldtimer said:Longcut said:The following summary provides an overview of procurement practices at U.S. plants. This
information is subject to change as plants continue to adjust to country of origin labeling
(COOL) requirements. Historically U.S. plants would have bought Canadian cattle when local
supplies were tight and the price was right. Therefore some plants rely on Canadian cattle due
to geographical closeness, while ‘C’ cattle are not typically bought by other plants due to
distance.
Cattle Classification under COOL
‘A’ – born and raised in the U.S.
‘B’ – Canadian born feeders, fed in the U.S.
‘C’ – Canadian fed cattle imported for immediate slaughter
‘D’ – foreign meat imported into the U.S. labeled ‘Product of Canada’
‘E’ – ground beef must be labeled with all countries that may be reasonably contained;
may be in any order.
Note: foodservice and processed foods are exempt.
Cargill ‐ starting in January they will be taking 'B' cattle at Fort Morgan, CO and Plainview, TX.
Contracts on ‘B’ cattle starting February 1st will have a $4 under basis for Canadian cattle and $5
under basis on Mexican cattle. These animals will probably be slaughtered in batches on a
separate day. These cattle will not be sorted as much – as they will not be used in branded or
premium programs. Cargill is not taking 'C' cattle; this is consistent with what has happened
historically as they are too far away to compete on price for these cattle. Cargill has announced
they will comply with the intent of the MCOOL law and expect to have a minimum of 70% of
product meeting the “Product of the USA” labeling standard by January 2009.
Tyson is no longer taking Canadian ‘C’ cattle at any of their mid‐west facilities, only ‘A’. At
Pasco they are taking Canadian ‘C’ cattle on Tuesdays and Fridays. While age verification is not
required it is preferred for shipping to Japan. Tyson will be taking ‘B’ cattle at Lexington and
Pasco. The ‘B’ label cattle will have a ‐$5 basis. The intention is that Pasco will slaughter ‘B’ and
‘C’ cattle daily, if these two categories are combined. Tyson intends to use the U.S. or Category
‘A’ label on all premium beef programs in early 2009 and label all beef and pork cuts from
livestock born, raised and processed in the US with the Category A label by mid‐2009. It is
estimated that 90% of fresh, retail beef and pork cuts in the US will qualify for the US label.
Cattle and Hogs will be labeled as Category ‘B’ or ‘C’ in the least cumbersome manner allowed
by USDA.
JBS is taking 'B' cattle at Hyrum and Greeley, slaughter will be daily. Age verification is not
required. Only ‘B’ cattle imported before July 15th 2008 are being taken at Grand Island. 'C'
cattle are being taken at Hyrum daily. ‘C’ cattle which were being taken at Greeley on Fridays
will be shipped to Hyrum as of Oct 31st 2008. Smithfield is taking 'C' cattle at Moyer (both cash
and contract cattle) with killings increased to five days per week. Cash cattle are being taken at
Packerland (Green Bay). However, after six months Smithfield has indicated they will be
moving to ‘A’ only cattle. National Beef are not currently and will not be taking Canadian cattle
after January 1st at any of their plants. (Note: Smithfield Beef Group and National Beef are in
the process of being sold to JBS. The Sale of Smithfield Beef Group and Five Rivers Cattle feeding
operations was approved by the DOJ and the sale completed on October 23rd but the sale of
National Beef has been blocked. JBS has indicated they will challenge the decision).
Washington Beef has not made any changes to their procurement policy for Canadian cattle yet
(still accepting Canadian fed and feeder cattle). They are waiting for the Final Rule to be
published before they make any changes. They have indicated that they will not be able to use
all three labels due to costs. A worst case scenario would be that they no longer accept
Canadian slaughter cattle (Category ‘C’), but slaughter Canadian feeders fed in the U.S. daily for
use of the mixed 'B' label.
American Foods Group is taking Holsteins and second cut cattle at Greenbay for grinding and
foodservice where no label is required as well as some very good quality fed cattle for trim.
In general, we are seeing segregation of plants and shifts with U.S. packing plants:
1) Not slaughtering Canadian cattle, taking only ‘A’ cattle for ease of reporting;
2) Slaughtering on certain days in order to separate labels;
3) Using a ‘mixed country’ label and slaughtering Canadian cattle daily; or
4) Purchasing Canadian cattle, mostly cows, for grinding or foodservice where the country
of origin label is not required.
We are not hearing of any U.S. feedlots that are planning to discontinue placing Canadian cattle
in 2008. However, since the six month education and outreach period will be over at the end of
March, US feedlots may start to take this into account shortly in the New Year. Intuitively,
some U.S. feedlots could decide that they only want to handle U.S. born cattle for delivers from
April onward. We are also anticipating that as the enforcement period approaches, U.S.
packers will become increasingly stricter about their segregation practices and that this will
further negatively impact opportunities to market Canadian cattle and place more downward
pressure on prices.
Longcut- that has to be a voluntary program of the Packers- because the M-COOL rule, as it was set by USDA, doesn't require it....
Did you ever think that maybe the Packers are getting the message the US consumers have been telling them :???: ....
Nope- not the way Schafer set the final rule for it...