Feedstuffs | May 5, 2003 | Issue 18 | Volume 75

Differing parties speak to problems, opportunities for producers in COOL

ROD SMITH, Feedstuffs Staff Editor

The country-of-origin labeling law (COOL) "is rife with problems," according to Gary Machan, vice president for hog procurement at Tyson Foods Inc., and "is simple" to implement, manage and verify, according to Jay Miller, a cow/calf producer from Washington, Va., and chair of the marketing committee of R-Calf USA.

Those two views provided the extremes in testimony to the first U.S. Department of Agriculture listening post last week, called to hear suggestions and views of parties who are affected by COOL for use by USDA's Agricultural Marketing Service (AMS) in writing a final, mandatory rule for COOL.

The listening post was April 29 in Raleigh, N.C. Listening sessions were also held in Austin, Texas, and Pasco, Wash., last week.

COOL was written into the 2002 farm bill and requires that, beginning Oct. 1, 2004, all fresh beef, lamb, pork and seafood and ground meat marketed at retail be labeled as to the country, or countries, of origin of the animal, or animals, from which the meat product came (Feedstuffs, April 29, 2002). The law does not cover foodservice, a channel into which 50% of meat is marketed, or poultry.

AMS developed a COOL rule last year for voluntary labeling (Feedstuffs, Dec. 2, 2002) and will write a rule for mandatory labeling based on comments received and experience reported from the voluntary period.

The rule has been criticized by livestock producers, packers and retailers who believe it will be burdensome, costly and damaging to demand and who maintain that there is no reason for origin labeling in the first place. However, the rule has been supported by other producers who believe origin labeling will improve demand for U.S. meat and prices and profitability for livestock production.

Machan's and Miller's statements to the listening session reflected that division.

Complicated nightmares and antagonistic interpretations

Machan said segregation of animals and meat products by origin, including an increase in labels from 8,000 to possibly 40,000 at his company alone to cover all possible label combinations will cost "hundreds of millions of dollars." Add onto that the costs for producers to document and verify their animals' origin and the costs for retailers to manage the COOL program and the cost goes into the billions of dollars, he said.

COOL will be a "record-keeping nightmare," he said, noting that "140 million cattle, hogs and sheep each year will potentially need 'birth certificates' that must be maintained and verified."

Packers and retailers who are found to have mislabeled products may be subject to fines and jail terms, he said.

Machan said Tyson Foods manages more than 75 brands created for specific market requirements, and in many years of managing such brands, the company has "never seen evidence" of consumer demand for COOL.

Furthermore, even if consumers would pay more for COOL, he said, there is no proof that they would pay enough more to offset the costs. "If consumers won't pay," he said, "then the supply chain will pay, resulting in decreased income for producers, packers and retailers."

Miller said COOL should be no more burdensome than existing labeling programs such as Certified Angus Beef, Certified Hereford Beef and the school lunch program and should not require any more record keeping than the existing requirements that are imposed on imported livestock and meat and producer self-verification of U.S.-origin animals.

He said labeling is profitable, a statement that he supported by pointing to Tyson Foods $100 million marketing promotion for its meat and poultry brands this year. He said packers are opposed to COOL because they don't want labeling profitability to work back to producers. They "want that profit for themselves," which is why they are "employing every imaginable tactic to coerce, threaten or scare producers" into opposing COOL.

He said COOL will make producers more competitive vis a vis packers, processors and retailers, prevent government agencies from using livestock production as a "bargaining chip" in trade agreements and strengthen food safety and national security.

He said packers, processors and retailers face fines only if they "willfully" mislabel product. (As previously reported, packers are subject to a different law that levies penalties even for products that are inadvertently mislabeled [Feedstuffs, Dec. 2, 2002].)

"The law is simple," Miller said. "It is the interpretation of the law by antagonists of the law that complicates it."

GIPSA okays packers' letters

The Grain Inspection, Packers & Stockyards Administration (GIPSA) has said packers are in order with the Packers & Stockyards Act (PSA) in disseminating letters to livestock producers that outline data and records that they will need to assure compliance with COOL.

The letters were distributed in March and suggested that producers will be required to provide documentation and third-party verification of the country of origin of their animals and will be subject to audit by plants. Both the Kansas Cattlemen's Assn. and Montana Cattlemen's Assn. have requested the Kansas and Montana attorneys general to investigate the letters as intimidating, misleading and threatening and, therefore, as unfair, unjustly discriminatory and deceptive practices that are prohibited by PSA.

R-Calf and the Livestock Marketing Assn. asked GIPSA to investigate the legality of the letters (Feedstuffs,, March 17).

However, GIPSA said packers will be required under COOL to provide documentation to retailers as to the country of origin of meat products and may need to have such documentation coming into plants. Moreover, GIPSA said PSA does not prohibit packers from requiring suppliers to maintain records or from auditing required record keeping.

AMS lists acceptable records

AMS has published a list of acceptable documents and records that may be used by livestock producers to demonstrate country of origin of their animals. The list is available at www.ams.usda.gov/cool/records.htm.

Educational posts

The American Meat Institute (AMI) has scheduled workshops this week to coincide with the AMS listening posts in Kansas for a discussion of what retailers are likely to require of packers under COOL and, therefore, what packers are likely to need from producers.

The May 6 AMI and AMS meetings will be at the Airport Hilton Hotel in Kansas City, and the May 8 AMI meeting will be at the Ramada Inn in Kearney while the AMS session will be at the University of Nebraska at Kearney. AMI's workshops will begin at 10 a.m., and AMS' sessions are 1-4 p.m.

A complete list of the remaining AMS listening posts was in the April 7 Feedstuffs and is available from www.ams.usda.gov/cool.