September 18, 2008
Canadian livestock industry prepares for US labelling policy


The Canadian livestock industry has prepared itself as much as possible for pending implementation of the US government's controversial country-of-origin-labelling, or COOL, legislation at the end of the month, officials from the cattle and hog industry said.


"There had been much apprehension about the implementation, but recent changes to the rules by the USDA have allowed the Canadian industry to breathe a bit easier," said Martin Rice, an executive director with the Canadian Pork Council.


The USDA on Sept. 12 announced that meat from slaughter animals born in Canada will be able to be mixed with meat from US-origin slaughter animals and be simply marked with a single label denoting a product of Canada and the US


Rice said that was a change from just a month ago, when the USDA issued an interim final rule for COOL. Under the original terms of that rule, it was feared that meat from animals born and fed in Canada but shipped into the US for slaughter would have to be identified with labels denoting a product of Canada and the US -- but with Canada always appearing as the first country on the label.


It remains unclear how the countries will be listed on label.


There were concerns that US packers that normally buy animals from Canada and mix them with US-origin animals would have been forced to segregate the two, a potentially costly exercise that could have led to reduced demand for Canadian livestock, Rice said.


"There has certainly been no question that the US COOL rules have had a large effect on the attitudes and the anxiety levels of Canadian producers who ship cattle and feeder pigs to the US," Rice said, noting that in some cases the pending changes have cast a dark cloud over the investment prospects for the industry.


Rice said there has been no evidence yet that the pending COOL changes have had an effect on Canadian livestock. "Part of that was due to the USDA amendments," he said.


However, Rice cautioned that there was still a lot to be worked out.


Rice said the Canadian Pork Council will be monitoring the effect of the COOL implementation closely to see if the new regulations widen the price gap for hogs and pork between the two countries by an even larger amount.


"If there is a huge price widening, then the Canadian government will have the evidence needed to initiate a challenge under terms of the Canada/US Free Trade Agreement or the World Trade Organization," Rice said.


"Because of the USDA amendments to COOL, it does not appear at this time as if the new rules will be as challenging to Canada's cattle sector as we first anticipated," said Rob McNabb, general manager of the Canadian Cattlemen's Association, or CCA. "However, we as an industry will still have to wait and see the ultimate outcome of that rule."


He said the US will continue to require Canadian cattle in order to help meet demand, and because of that US buyers will figure out a way to deal with COOL.

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