MCOOL debate: Agree to disagree?
September 27, 2017
The mandatory country of origin labeling (MCOOL) debate is far from over, despite a stalemate that seemed to have taken place, with some opponents coming to terms with the idea of "agreeing to disagree," but the topic is surfacing again, full steam ahead, with recent discussion on the North American Free Trade Agreement (NAFTA).
Officials from the U.S., Canada and Mexico began meetings in late August, in Washington, DC, to renegotiate NAFTA. The Office of the U.S. Trade Representative (USTR) said U.S. negotiating objectives include expanding market access for U.S. agriculture and supporting U.S. manufacturing. The Administration also said it would pursue the goal of reducing the trade deficit with Canada and Mexico and would work to strengthen the ability of the U.S. to enforce its trade laws.
Negotiations continued September 1-5 in Mexico, and then in Canada, September 23-27. Negotiators will reconvene in Washington in October, with the goal of concluding negotiations by the end of 2017, or in early 2018 at the latest, according to the North American Meat Institute (NAMI).
NAMI, along with the National Cattlemen's Beef Association (NCBA) oppose MCOOL rules in NAFTA, while the U.S. Cattlemen's Beef Association (USCA) and R-CALF argue that NAFTA should be a vehicle for a reinstatement of COOL.
Those against MCOOL continue to point out the flaws in the past program and challenges with reinstatement, along with arguing that we have voluntary COOL, and pointing out that origin is required on beef products imported.
"Consumers are not being duped into buying foreign meat. The latest figures from USDA [WASDE] estimated that beef imports will account for a mere 10.5 percent of total consumption in the United States. That is hardly an import flood. Plus, the vast majority of that product is bound for foodservice and would not be covered by MCOOL, anyway. What is more, USDA regulations already require imported beef products processed overseas to show the country of origin on the label," Craig Uden, fourth-generation cattleman from Elwood, Neb., and president of the National Cattlemen's Beef Association, pointed out in an opinion piece.
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Uden points to research on COOL, done in May 2015, at Kansas State University.
"Any policy that results in higher costs of compliance without a quantifiable benefit will likely have an adverse economic impact," the KSU summary states. The study included looking at both the implementation of MCOOL in 2009 and a revision of the policy in 2013.
Bottom line, in that study, researchers found no evidence of meat demand increases for MCOOL covered products. "Because general meat demand has not increased, and the meat industry as a whole has experienced lower quantities and higher costs to implement the additional labeling procedures, MCOOL has led to net economic losses," KSU researcher wrote. https://www.ksre.k-state.edu/news/stories/2015/05/mcool-losses050615.html
Uden, and KSU researchers from this study, argue that MCOOL is not the answer. Voluntary COOL is.
"A wide array of voluntary labels currently used by beef producers and retailers have proven more effective at addressing consumer demands in the meat aisle. Labels like "Certified Angus Beef" or "Showcase Premium 100% USA Beef" promote products with specific characteristics, without government mandates or costly regulations," Uden points out.
Arguably, more labels and more regulations, ultimately lead to higher costs, somewhere in the production line.
NAMI, also opposing MCOOL, is on the opposite side of a NAFTA labeling battle with Canada, opposing Canada's request for nutrition warning changes that could negatively impact the U.S., similar to Canada's argument again MCOOL for U.S. beef products.
Barry Carpenter, NAMI president and CEO, sent a letter to USTR Robert Lighthizer urging him to oppose efforts by Canada to implement new, unjustified technical barriers to agricultural trade during the NAFTA negotiations. Canada has proposed mandatory front-of-pack nutrition warnings for saturated fat, sodium and sugar as part of the country's Healthy Eating Strategy, and is considering measures to restrict the marketing of "unhealthy foods" to children.
In the letter, the Meat Institute said Canada's proposed front-of-pack nutrition warnings will have an inordinately negative impact on consumer packaged foods from the U.S., given the significant market share of branded U.S. products in the Canadian market.
Supporters of MCOOL stand by their argument that consumers want to know where their beef comes from.
Mark Larson, a professional chef from Spearfish, S.D., said he'd pick the lower price over the country, if he was choosing between a U.S. or Canadian ribeye, equally marbled. The price point almost always prevails.
"It all depends on what you want. What cut; what type of beef. All this has to play into what you are looking for," Larson said. But consumers do care…sometimes, Larson agreed. "I would say personally, to me, no [labeling is] not important. But if I'm going to eat it, there better be someone that can tell me where it came from."
So do they care, or not?
In July, Michigan State University conducted the Food Literacy and Engagement Poll with 1,059 U.S. residents aged 18 and over. The conclusion, consumers are nothing short of confused, but 66% said food labels influenced their buying decisions. http://food.msu.edu/articles/msu-food-literacy-and-engagement-poll
U.S. Cattlemen's Association (USCA) President, Kenny Graner, along with other producers, discussed COOL at the USCA annual meetings in Billings, MT, sharing support for MCOOL in NAFTA discussions, despite skepticism that it could make a comeback. Graner said the priorities outlined by USTR were not meeting the needs of cattle producers.
"Any renegotiation of NAFTA must include a path forward on origin labeling. The current trade disparities between the U.S., Canada, and Mexico, won't change unless all factors affecting the situation are addressed. There must be a level and fair playing field when it comes to trade and USCA will continue working toward achieving that as any negotiations moved forward," Graner says.
Trade deficit was also a top discussion at the meeting, and Graner argues in a letter to the U.S. House of Representatives Committee on Agriculture, that the lack of MCOOL is partially to blame.
"Without meaningful country-of-origin labeling on meat products or strong rules of origin, many consumers who wish to purchase meat derived from animals born and raised in the United States are unable to identify such product," Graner writes. "This deprives U.S. cattle producers of the ability to differentiate their product in the market, and allows meat packers to take advantage of different supply sources while capitalizing on consumer confusion about the source of the food they eat."
The growing concern of packer consolidation in the U.S. seems to play a part in both sides of the argument – for and against COOL.
"Since 1995, 50 beef slaughter plants have closed, costing thousands of jobs. The U.S. cattle herd is now the smallest it has been since 1941. This is not an industry that has been thriving under free trade," Mike Schultz, R-CALF USA Vice President, points out.
But Schultz says pressure from global meat companies led to the downfall of MCOOL in 2015, despite MCOOL being on track to salvage the American meat industry.
"The reinstatement would provide more money for U.S. cattle producers, because consumers will pay more to know where their food comes from. This premium would not only benefit the ranchers that supply the cattle needed for beef production, but also the workers in small towns who slaughter the cows," Shultz said in a press release, adding that consumers would benefit from knowing that their food comes from a trusted source and would feel safer feeding their families with beef that was born, raised and slaughtered in the U.S.
Kevin Hueser, Senior Vice President at Tyson foods, argues that MCOOL actually fed the meatpacking consolidation.
"Because of COOL, Mexican packing plants have exploded," Hueser said. "We've made a competitor out of a country that wasn't a pricing competitor before."
And as the debate goes on, Canada is adding its two-cents, for whatever its worth, depending on the side of the fence the beef is on. Canada is not so concerned about tariffs, from its nutrition labeling request, but rather the potential of COOL being reinstated.
Dan Darling, president of the Canadian Cattlemen's Association doesn't think reinstatement of MCOOL is likely, but isn't letting his guard down yet.
"Things can pop up. We can be given up for some other commodity being fixed," he told reporters.
Bottom line, producers are passionate about their industry, and are vigalent, and all sides.
"We remain hopeful that President Trump and USTR Lighthizer will do the right thing here for the US cattle industry and rural America," USCA's Senior Policy Analyst, Jess Peterson, shared.