October 28, 2003



US Beef, Pork Groups Say Proposed Country-of-Origin Labeling Require High Cost, No Benefit


The proposed U.S. mandatory country- of-origin food labeling law will raise costs for the nation's livestock producers while providing little or no benefit to them, the National Cattlemen's Beef Association and the National Pork Producers Council said Monday in a joint conference call with media.


The U.S. Department of Agriculture confirmed Monday in a submission to the U.S. Federal Register that the implementation costs of the mandatory country- of-origin labeling law may reach as high as $3.9 billion.


The record-keeping costs alone to producers, processors and retailers will cost as much as $582 million in the first year, the USDA said in the submission.


Jon Caspers, NPPC president, said the proposed rule is one of "all cost, no benefit" to producers. "We're trying to get Congress to go to a workable, voluntary program, not a mandatory one."


Terry Stokes, chief executive for the NCBA, said the cost/benefit analysis of the proposed regulation shows a much higher cost than had been expected and that there are common concerns among producers of the incremental cost. There are also many concerns about complying with the rule and what requirements producers they may face coming back from meat packers and retailers.


Caspers also said the USDA analysis "validates producer concerns that consumers are not willing to pay a price premium for products bearing U.S. origin labels and therefore higher prices will not be generated for pork products covering the costs" of mandatory origin labeling. "If there was a consumer demand for country-of-origin labeling, the market would have demanded it years ago," he said. "The lack of participation by any suppliers in other

government labeling programs clearly indicates, however, that consumers simply

don't have a strong preference for the labels."


Caspers added that the mandatory COOL regulation "has the potential to drastically affect international trade. Some of the U.S. pork industry's major trading partners have already indicated that they will file challenges under the World Trade Organization's trade agreements and could retaliate if MCOOL (mandatory COOL) is implemented," he said. "In today's global marketplace, where pork producers have just come out from under 18 months of straight losses, we cannot afford to lose even a small percentage of the exports that provide significant value to the U.S. pork industry."


Bryan Dierlam, NCBA director of legislative affairs, said the beef organizations' goal would be to move to a workable solution that will enhance profits for the nation's cattle producers.


Responding to a question about what advice NCBA would give its producer members in preparation for COOL to become effective in September 2004, Dierlam said clearly the law is on the books and that there is every indication at this time to believe that it will go into effect and be enforced. So producers must take actions to prepare for it going into effect next September. Meanwhile efforts with Congress and others will continue to move to a workable solution, he said.


The USDA said Monday in its proposal that it will hold a 60-day public comment period.


In the proposal released by the USDA, the department reiterated that under the labeling program beef, pork and lamb can only be labeled as U.S. origin if they are "derived from animals that are born, raised, and slaughtered in the United States."


Covered commodities include muscle cuts of beef (including veal), lamb and pork; ground beef, ground lamb and ground pork; farm-raised fish and shellfish; wild fish and shellfish; perishable agricultural commodities such as fresh and frozen fruits and vegetables; and peanuts.


The country-of-origin labeling law will mandate that the origins of those items will have to be labeled on supermarket shelves. Food service establishments are specifically excluded, the USDA said in the proposed regulation.


COOL is a retail-labeling program and as such does not address food safety or animal health concerns, the USDA said. Both imported and domestic food products must meet the food safety standards of the USDA's Food Safety and Inspection Service and/or the Food and Drug Administration, as applicable.


The law also contains enforcement provisions for both supplies and retailers that include civil penalties of up to $10,000 for each violation.
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