Feedstuffs | May 12, 2003 | Issue 19 | Volume 75

Group says COOL 'absent of value;' economists refute dire claims about law

ROD SMITH, Feedstuffs Staff Editor

The Nebraska Pork Producers Assn. (NPPA) last week told a listening post called by the U.S. Agricultural Marketing Service (AMS) to enlist input from interested parties on the country-of-origin labeling law (COOL) that a mandatory country-of-origin label will be "absent of value" for the pork production chain and consumers and will increase costs of production for pork producers.

NPPA president and Nebraska pork producer Dave Hansen said COOL will not increase hog prices for producers but will increase pork prices for consumers and will add costs of production for producers to maintain documentation, decrease domestic demand and exports and provide an unfair advantage for poultry producers. He said NPPA supports a voluntary label but not a mandated one.

His comments were similar to and supported by other producer groups and packer/processor representatives at the listening post in Kearney, Neb., and at other posts last week, although representatives from some groups spoke in support of a mandatory program.

At the same time, a new study was issued by a group of economists showing that COOL does not have to be as burdensome or costly as AMS estimates and producer research has suggested.

COOL was written into the 2002 farm law and requires that, as of Oct. 1, 2004, all fresh beef, pork, lamb and seafood and certain other commodities marketed at retail be labeled as to the country, or countries, of origin of the animal, or animals, from which the meat product was produced (Feedstuffs, April 29, 2002). The law does not cover meat sold in the foodservice trade and does not cover poultry.

AMS developed a COOL rule for use in the voluntary period of the law between now and Oct. 1 next year (Feedstuffs, Dec. 2, 2002) and is hosting listening posts as an additional means to gather public comment for use in writing a final, mandatory rule. Additional listening posts will be held through June, and dates and locations are available at www.ams.usda.gov/cool.

COOL is, is not consumer information law

Also at the Kearney listening post, Kansas Cattlemen's Assn. president Larry Brack said consumers deserve the right to know the origin of their meat, and he said there are "a number of studies and surveys" showing that more than 87% of consumers want origin labels and will pay premiums for U.S. origin beef.

At a listening post in Austin, Texas, the Texas Cattle Feeders Assn. (TCFA) and Texas & Southwest Cattle Raisers Assn. (TSCRA), in joint testimony, also called for keeping the label voluntary for many of the same reasons that were cited by NPPA's Hansen.

TCFA chair elect Ernie Morales noted that both Canada and Mexico, which are critical importers of U.S. beef, have threatened to retaliate against U.S. beef if COOL is made mandatory and affects exports of their beef or cattle into the U.S. He said COOL would be seen as an artificial trade barrier, and retaliation could jeopardize Canadian and Mexican markets for U.S. producers.

TSCRA president Bob McCan said COOL is not the consumer information law that it's promoted to be as it does not cover foodservice or processed products or poultry, and he noted that about 80% of all imported beef goes into foodservice and processing.

(As previously reported, beef imported into the U.S. since 1990 has increased just 1.3 billion pounds, inclusive of beef from live cattle imports (Feedstuffs, April 21). Given McCan's data on foodservice and processing, COOL, therefore, addresses just 260 million pounds of the increase in beef imports in the last 12 years, while U.S. beef production has increased 4.5 billion pounds.)

In line with McCan's testimony, American Meat Institute general counsel and senior vice president for regulatory affairs Mark Dopp said an unaided poll by the International Food Council asked consumers if there is information not currently on food products that they would appreciate having and found 75% of consumers said no. Of those who said yes, he noted, none asked for country of origin.

The economists' study was done through the International Agricultural Trade & Policy Center at the University of Florida and drew several conclusions, including:

* Beef cattle, hog and other producers of the covered commodities are not subject to AMS jurisdiction to document origin unless they are vertically integrated and also perform packing and retailing functions.

* The least-cost documentation strategy is to presume that all covered commodities are of U.S. origin and to track existing marks of origin on imported products, which is a documentation process that complies with COOL, as well as World Trade Organization and other trade laws.

* Certain past cost estimates "are substantially overblown," and costs for recordkeeping would be less than 1 cent/lb.

* The benefits of COOL "substantially" outweigh the costs, including consumer choice and information and increased consumer confidence in the food system.

* Consumer willingness to pay premiums for products of U.S. origin is "very significant," and consumer demand will not be adversely affected by higher costs for origin-labeled products.

The study was done by John VanSickle, director of the Florida trade and policy center and professor of food and resource economics at the university; Roger McEowen, associate professor of agricultural economics at Kansas State University; C. Robert Taylor, professor of agricultural economics at Auburn University; Neil E. Harl, professor in agriculture and economics at Iowa State University, and John Connor, professor of agricultural economics at Purdue University.