November 7, 2003
USDA Confirmation of Pork Industry Projections That Country-of-Origin Labelling is Unbeneficial
The cost-benefit analysis for mandatory country-of-origin labeling (COOL) from the U.S. Department of Agriculture (USDA) confirms pork industry projections that there is no benefit to producers, packers, retailers or consumers, says Jon Caspers, NPPC president.
"This much-anticipated USDA analysis indicates that in the first year alone, following implementation of COOL, the covered commodities could see costs of up to nearly $4 billion," says Caspers, a Swaledale, IA, pork producer.
"It is difficult to understand why anyone would support such a costly and burdensome rule that offers virtually no benefit to the nation's 1.5 million farmers, firms and retail establishments that it will impact," he adds.
The impact on the pork industry alone, from farm to retail, is pegged at $673 million a year. At 100 million hogs marketed annually, the cost comes to almost $7/hog. Caspers points out that cost figures exclude the substantial damage COOL would have on pork exports.
"Our projections are that this law will really destroy our export markets in the pork industry," says Caspers. "We see it as having a major impact, and long-term we are going to pass our export markets onto the Canadians," he projects.
In addition, the USDA analysis did not address the cost of all of the finishing buildings that will be standing empty in the Midwest. It too did not take into consideration the cost to the thousands of pork producers, forcing them out of business because they were not able to manage with the increased production costs and they won¡¯t be able to compete in the international marketplace, adds Caspers.
The USDA analysis validates producer concerns that consumers are unwilling to pay a premium for products labeled as U.S. origin, and produce higher pork prices that will cover the costs of COOL.
"If there was a consumer demand for COOL, the market would have demanded it years ago," he says. "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."
American Meat Institute President J. Patrick Boyle says that COOL will cost the meat industry nearly $2.4 billion and the entire U.S. economy more than half a billion dollars a year.