October 29, 2003
Proposed US Law On Country-Of-Origin Labelling Hinders Recovery of Canadian Beef
A proposed U.S. law on mandatory country-of-origin labelling will hinder the recovery of Canada's battered beef industry hard- hit by the mad cow crisis, says a top industry official.
"We believe there are some U.S. retailers who will simply make the decision not to buy Canadian beef," Ted Haney of the Canada Beef Export Federation said Tuesday.
Under a 200-page proposal released by the U.S. Department of Agriculture, labels on meat will have to indicate where an animal was born, raised and slaughtered.
"That's going to lead to complex labelling, confusing labelling and an immense logistics problem in keeping everything separated," said Haney.
Public input on the legislation will be accepted until Dec. 29.
Some American producers have long sought country-of-origin labelling as a way to promote and market home-grown beef. But an analysis of the legislation, which will also affect pork, lamb, fish, fruits and vegetables, shows that promotion will come with a big price tag to the American economy, with an estimated of $3.9 billion.
American cattlemen say once tracking procedures and paperwork are factored in, labelling is too expensive to be practical.
"The cost-benefit analysis shows it will be all but impossible for producers to improve their bottom line under this mandatory law," said Eric Davis, president of the National Cattlemen's Beef Association.
Eventually, Canadian producers will be largely affected too.
Prior to the May 20 discovery of mad cow disease in a lone Alberta breeder, the beef industry was worried that the labelling issue would mean a hit of $300 million in processed beef and live cattle exports. Now, it's another stumble on the road to recovery for cattle producers who have suffered $1.6 billion in lost revenue ever since international borders declined Canada's beef.
Kathryn Mattingly of the USDA's agricultural marketing service says the proposal wasn't designed to keep meat out of the country, it's aimed at giving consumers a choice to buy domestic or imported products.
"This is a retail marketing tool - it's not a food safety issue at all," Mattingly said from Washington.
Mattingly said producers, distributors and retailers would be required to keep verifiable records to ensure products meet the new rules. There will be financial penalties for non-compliance.
That won't be a problem with Canadian beef, which is already tagged and tracked under regulations set out by the Canadian Food Inspection Agency.
Mattingly says the plan is to incorporate any changes by April, with a law in effect Sept. 30, 2004.
Dennis Laycraft of the Canadian Cattlemen's Association says U.S. packing plants and feedlots may be unwilling to re-accept Canadian cattle even after the border reopen if the proposal becomes law. Both would have to segregate the animals, which would increase handling costs and likely lower the price of Canadian beef.
"Some indicated it wasn't worth the trouble," Laycraft said Tuesday.
Laycraft expects the 200-page labelling proposal to be a "dose of reality" to American proponents of the legislation.
"We expect a fairly strong backlash developing," said Laycraft.
The Canadian Cattlemen's Association will prepare a brief on the issue after consulting with officials in the meat industry and Ottawa.
More than 30 countries remain closed to Canadian beef, although the U.S. began accepting some cuts of boneless beef in September. Canadian officials are expecting to see soon a proposed rule change outlining what it will take to get live Canadian cattle into the American market, although live cattle exports are not likely to enter U.S. until the first quarter of 2004.