ROD SMITH, Feedstuffs Staff Editor

WASHINGTON, D.C. -- At the American Meat Institute (AMI) here, senior vice president for regulatory affairs and general counsel Mark D. Dopp said country-of-origin labeling (COOL) is one of those unimaginable issues "you hope will go away" but won't without congressional intervention.

He said he does not sense that AMI will recommend its members to participate in the voluntary phase, noting that where a packer might be amenable to giving an origin label a try, he still would need producers and retailers to supply and take products that can be correctly labeled, and vice versa, a retailer still would need producers and packers.

He said the institute will work during the next several weeks to make the final rule more manageable for meat packers and processors, which will involve discussions with producers and retailers. "We have to revisit this," he said. "We anticipated that this would be" onerous and problematic, "but it's worse than any of us thought it would be."

According to the guidelines, Dopp said plants will need dedicated pens to keep animals organized by their countries of birth, finishing and slaughter to provide verification documents for retailers as to the origin of the meat they buy so retailers can show AMS that their labels are correct. This will require documentation by producers on the animals coming into the plants, he added.

Plants will also need hundreds of labels to cover all contingencies, he said, especially for ground meat, where labeling actually could cover the entire package once the COOL and other voluntary labels, e.g., cooking instructions, are affixed.

Consider this, he proposed: It's Wednesday, and a ground beef processor buys trimmings from four suppliers whose cattle are of mixed origin, having been born in countries other than those in which they are raised and/or slaughtered, as well as cattle born, raised and slaughtered in the U.S. and, "because the market's right, which is part of our free enterprise system," cattle from Australia.

Now, the processor has several customers, each with its own formula, which requires several blends of those supplies. Under COOL, each blend must not only be labeled as to countries of origin but the label must show the prominence of those blends in descending order (story, p. 1). The processor needs labels that accommodate any combination of the six supply sources by source and prominence. "It's practically the U.N."

This is "a huge problem" for plants and producers, Dopp said. COOL may encourage multiple-plant systems to dedicate plants to like sources of animals, which could mean feedlots and producers who had marketed their cattle, hogs and other livestock to a now-dedicated plant may need to find and transport to other buyers because they don't have the animals to meet the plant's COOL program.

A feedlot, for instance, that buys 20% or more feeders from Mexican suppliers or a pork producer who buys feeder pigs from Canadian suppliers may need to find another plant if the plant to which they normally sell becomes dedicated to entirely U.S. product, he said.

This may not be up to the plant, either, Dopp said, if the retailer to which the plant sells goes to a strict U.S. program.

Single-plant companies won't be able to dedicate production or pens, he said, which may be a consolidation issue that reduces buyers, if not capacity.

This is not a cry-wolf matter, Dopp said, because of the verification issue in which self-certification is not permitted, and producers, packers, processors and retailers must do extensive documentation "to assert" the origin of their animals and meat products. A fine of $10,000 may be imposed per violation, he said, and it's not clear if a violation would be assessed by the box, day, shipment or other standard.

It's also not clear if producers would be subject to fines, but producers will need to provide the appropriate documentation if they expect packers to assume COOL risk for their animals, and this will be recommended to members. He said "they insist on detailed records, a trail of origin," which means producers, especially beef cattle and dairy producers, "should be documenting this afternoon" because they have animals now that they will market into beef channels after the mandatory phase starts.

In response to questions, Dopp told Feedstuffs that the only way COOL can be made more tolerable is for Congress to amend -- or repeal -- the statute, which he said won't happen unless an appeal comes from the producer segment. He said as producers understand more and more what they bought into in urging COOL, they may seek some statutory relief.

He said Canadian and Mexican producers and those in other countries that export livestock and meat to the U.S. can't file a complaint in the World Trade Organization that COOL is an unfair trade practice until the mandatory phase starts, but he said it is known that Canada already is preparing complaints and potential retaliation that may reduce opportunities for U.S. producers to feed animals in Canada and export meat north.

Dopp said most plants, ultimately, will become COOL compliant, "but some won't," due either to internal issues such as lack of facilities or to reasons such as being dropped by retailers who decide a plant does not produce meat from the countries of origin they want in their meat programs.

This is a consolidation issue, he said, because if a plant closes and a feedlot sold 25% of its production to that plant, it loses 25% of its market that must be replaced, if possible. This could even affect the feedlot's survivability, he said.

"I had not envisioned this as a tool for consolidation," he said.

Dopp said COOL will increase consumer costs for meat unless retailers, packer/processors and producers are willing to take less margin as costs are passed back through the chain.

Costs for an origin label are different from costs for a nutrition label, he said, explaining that the fixed cost for a nutrition label are flat or decrease after the label is established, but the fixed costs for an origin label "are constantly incurring costs" as plants buy different cattle every day and will have new, ongoing verification and documentation costs.

"How does the price of food not go up?" he asked.

If costs increase, he said, consumers still will buy meat but probably will buy less of increasingly higher-priced meat and more of lower-priced poultry or other meat alternatives such as meatless vegetarian burgers. They also may turn to Australian beef and Canadian pork that will be far more price competitive than they are now, he said.

Between now and the mandatory phase, Dopp said, AMI will work with its members and with producers and retailers to determine how to source and verify livestock and meat. "All of this is being done to label something as a product of the U.S.," he said, "but when people (who supported COOL) find out what's going to evolve, there may be some buyers' remorse."