Petition aims to change labeling laws for U.S. beef
August 9, 2018
When consumers shop the meat case, they have a variety of labels to choose from such as natural, organic, antibiotic-free, grassfed, Certified Angus Beef and Certified Hereford Beef, just to name a few.
While beef and pork muscle cuts are no longer under the list of commodities covered by the country-of-origin-labeling (COOL) regulation (as of February 2016), many products, such as grassfed beef, are still labeled as a "Product of U.S.A."
However, many in the beef industry are citing a gross error in this labeling claim — it's not just domestic beef that's being packaged with "Product of U.S.A" stickers.
Per current USDA rules, beef that is born, raised and slaughtered in another country, but processed in the United States, can be labeled as "Product of U.S.A."
This loophole, critics say, is hurting the nation's grassfed beef producers and undermining their market shares with a cheaper product. The grass-fed beef industry has grown from $17 million in sales in 2012 to $272 million in sales in 2016; however, because 70-80 percent of grassfed beef on the U.S. market is imported, with much of it labeled as a "Product of the U.S.A.," U.S. cattlemen are working to stop this labeling.
"Our grass-fed producers who have been working for 15 years to create space on the shelf for their products are now seeing their markets be eroded by cheaper beef sourced from somewhere else," said Carrie Balkom, "American Grassfed Association (AGA) executive director. "For a beef carcass to come from overseas and be processed or packaged here and labeled as a 'Product of U.S.A' is just not right."
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According to the Institute for Agriculture & Trade Policy, "Some of the big global players in the meat industry like JBS, Perdue and Cargill have invested in the grassfed sector. Brazilian-owned JBS has operations in Australia that allow it to be a major grassfed importer into the U.S. Cargill also has significant grassfed beef investments in Australia to import grass-fed beef."
To close this loophole, the Organization for Competitive Markets (OCM) and the AGA submitted a petition to the Food Safety and Inspection Service (FSIS) on June 12, 2018, to "change the second paragraph of the 'Product of U.S.A.' entry in the FSIS Food Standards and Labeling Policy Book to state that products may bear the phrase 'Product of U.S.A.' …[i]f it can be determined that significant ingredients having a bearing on consumer preference, such as meat, vegetables, fruits, dairy products, etc., are of domestic origin (minor ingredients such as spices or flavorings are not included)."
The USDA is accepting public comments on the petition through August 17. These comments can be submitted here: https://www.regulations.gov/docketBrowser?rpp=25&so=DESC&sb=commentDueDate&po=200&D=FSIS-2018-0024
With nearly 750 comments already, the comments overwhelmingly lean toward a change in the "Product of U.S.A." standards to close the loophole and only accept beef born, raised and slaughtered in the United States to be labeled as such. To date, organizations including the Organic Consumers Association, Dr. Mercola, Friends of the Earth U.S., Earth Justice, United States Cattlemen's Association (USCA) and Institute for Agriculture & Trade Policy have joined the AGA and OCM in support of this petition. Meanwhile, at press time, the National Cattlemen's Beef Association did not have a comment on this issue.
"The USCA's founding members fought for the original implementation of mandatory COOL and we continue that fight today — lobbying both Congress and the Administration to reintroduce a labeling program for U.S. beef products," said Lia Biondo, USCA director of policy and outreach. "This petition for rulemaking closes the loophole that allows processors to bring in imported product and claim the Made in the U.S.A. label. The multinational meatpackers have been abusing the system for far too long at the expense of our nation's cattle producers. It's time we shut down this inexcusable loophole and bring back a truthful and transparent country-of-origin labeling program."
According to the Institute for Agriculture & Trade Policy, the loophole is allowing importers to dominate the U.S. grassfed beef market. An excerpt from an article on the organization's website titled, "Stop Meat Companies From Rigging the Grassfed Market," reads, "Following the repeal of COOL, now meat companies follow voluntary labeling rules and there are concerning signs that some have taken advantage of the 'Product of U.S.A.' loophole. Allen Williams, a sixth-generation rancher and founding partner of Grass Fed Insights, a leading consulting group on grassfed beef, told The New Food Economy that U.S. producers owned more than 60% of the domestic grass-fed market in 2014; today American producers claim only about 15 percent of the grassfed market."
While U.S. grassfed beef producers could be losing marketshare due to this loophole, other factors might be playing a role in the loss of marketshare. Australia, Canada and New Zealand are the top three beef exporters to the United States, and with the temperate climates and abundance of grasslands in Australia and New Zealand, beef is more reasonably priced. This makes it difficult for grassfed beef producers in the U.S. to compete, considering the freezing temperatures and shorter growing window forcing producers to feed costly hay and forages during the winter months.
And despite the organizations, consumers and beef producers who are calling this petition a "common sense" move, others aren't on board with the proposed change in the petition.
"Our organization is opposed to the petition," said Mark Dopp, North American Meat Institute (NAMI) senior vice president of regulatory affairs and scientific affairs. "It's ill considered and fundamentally doesn't support what the law provides. Section 20 of the Meat Inspection Act says that imported product is to be treated as of domestic origin. What USDA has done is simply abide by the policy embedded into the law. The product bears the country of inspection."
Dopp warns there could be unintended consequences of this petition.
"We aren't just talking about beef; we are talking about vegetables, fruits, cheeses and other ingredients," he said. "So if we have beef stew, and part of the year, we can't source carrots in the U.S., so we have to get them from Chile, this becomes a labeling and production nightmare for the packer and processors, disrupts the marketplace and hurts consumers by creating more confusion. To be blunt, this petition is a protectionist move; it's very much like COOL."
COOL has made a resurgence in recent months, particularly as trade discussions have heated up in Washington, D.C., and a 2016 survey by Consumer Reports found that 74 percent of consumers want to know the origin of their food. This petition, says Balkom, is an effort to provide greater transparency and allow consumers to support American grassfed beef producers with their purchase.
"Consumers are erroneously paying a premium for U.S. grassfed beef and are getting an inferior product from Australia or Brazil," she said. "Our consumers deserve truth in labeling. Let's let them decide which product they want to buy."
Cutline (Cattle photo by Amanda Radke): Sales of grassfed beef rose to $272 million in 2016, up from $17 million in 2012; however, U.S. beef producers' marketshare has declined from 60% to just 15% in recent years.
Cutline (Photo from American Grassfed Association): A petition to the FSIS aims to close the loophole that allows imported beef processed in the United States to be labeled as a "Product of the U.S.A."