Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America on COOL
CEO, R-CALF USA
“Beware the unintended consequences” is a phrase used by industry trade groups to discourage reforms that would dare attempt to limit the reach and profit-making potential of multinational meatpacking companies. The phrase is typically associated with projections of astronomical price increases for consumers and devastating price decreases for livestock producers. But, that phrase wasn’t used in the mid-90s when the multinational meatpackers themselves wanted to change public policy to increase their profit-making potential.
Case-in-point: In the mid-90s multinational meatpackers advocated that the country-of-origin for meat should be the country where the product was last substantially transformed. They succeeded.
And so it is today that under World Trade Organization (WTO) rules a meatpacker can import a 12-year-old cow from Mexico or Canada, immediately slaughter it in a U.S. packing plant, and label the resulting beef for export as a “Product of the USA.” Additionally, this beef would be eligible for a U.S. Department of Agriculture (USDA) quality grade stamp, such as USDA Prime, USDA Choice, or USDA Select. Similarly, Canada can import live cattle from a foreign country – say Columbia – immediately slaughter the animal in Canada, and then export the resulting beef to the United States as a “Product of Canada.”
Now, consider the consequences for U.S. livestock producers: Multinational meatpackers can use a USA label along with a USDA quality grade stamp – both of which reflect the good image and reputation of independent U.S. livestock producers – to sell beef in foreign markets, even though the beef is produced from animals that were not born on U.S. soil nor raised or fed by any U.S. farmer or rancher. If such foreign-origin beef is sold in the domestic market, it would still bear USDA quality and inspection markings that erroneously suggest it is of U.S. origin.
The consequences for consumers are even more dubious: After the hypothetical meat product from the Columbian animal bearing a Canadian-origin label crosses the U.S. border, the Canadian label can be lawfully removed when the meat is repackaged by a U.S. processor or retailer, leaving nothing on the package other than a “U.S. Inspected” label that would lead most consumers to believe the meat must be of U.S. origin.
Congress sought to end this confusion regarding the true origins of meat sold in the domestic market – the market over which Congress and not the WTO has jurisdiction – by passing the mandatory country-of-origin labeling (COOL) law in 2002. The multinational meatpackers’ unintended consequences mantra – replete with projections of untenable consumer price increases and deep discounts on livestock – effectively delayed the proper implementation and enforcement of COOL for longer than a decade.
On May 23, 2013, however, the USDA issued a final rule describing how and when it would implement COOL in the domestic market. The final rule ensures that only meat from livestock born, raised, and slaughtered in the United States will receive a USA label and that meat from domestic livestock will not be mislabeled with a multiple-country label. The final rule accomplishes this by requiring meat from animals slaughtered in the U.S. to be labeled as to where the animal was born, where it was raised, and where it was slaughtered.
To give the domestic marketplace time to incorporate the new requirements, the USDA indicated the final rule would not have full force and effect until November 23, 2013. After that date, meat from the 12-year-old cow used in the example above will be required to bear a label stating “Born and Raised in Canada (or Mexico), Slaughtered in the United States.”
And how would multinational meatpackers respond to the new labeling regime that ends marketplace confusion by informing consumers of the country or countries where the animal from which meat was derived was born, raised, and slaughtered? Well, they sued, of course, and told a U.S. district court that the unintended consequences included a violation of their First Amendment rights to free speech. They stated they disagree with speech that informs consumers as to the country or countries where an animal was born, raised, and slaughtered. After all, they argued, there is no difference between USA-produced beef and beef from animals born and raised in foreign lands: “In short, beef is beef, whether the cattle were born in Montana, Manitoba, or Mazatlán,” asserted the National Cattlemen’s Beef Association (NCBA), the National Pork Producers Council (NPPC), four meatpacker trade groups, and three foreign livestock trade groups in their lawsuit filed against COOL.
The U.S. district court was unpersuaded by the meatpacker trade groups’ anguishing mantra of unintended consequences and flatly rejected, in a thoughtfully worded 76-page opinion, not only their First Amendment claim but also their assertion that they would all suffer irreparable injury if the final rule were fully implemented Nov. 23.
Unwilling to yield to the district court’s rejection, the meatpacker trade groups immediately appealed. They argued the final rule should be blocked because it benefits domestic livestock producers. COOL supporters find this argument bizarre because they had asked Congress to pass COOL for this precise reason – to benefit U.S. farmers and ranchers. Soon thereafter, the appeals court handed the meatpacker trade groups yet another defeat by refusing to schedule a hearing on the appeal before November 23 – the day that irreparable injuries would supposedly begin.
After two resounding defeats by the judicial branch of government, the meatpacker trade groups turned their focus toward the long-delayed 2013 Farm Bill. They presumably hoped the grid-locked Congress would be either distracted enough or naïve enough to fall for their exhausting, unintended consequences mantra and block the implementation of the final rule, an outcome the more probative courts have so far rejected.
How far the meatpacker trade groups will go to prevent U.S. livestock producers from differentiating their U.S. product in their own U.S. marketplace and U.S. consumers from knowing where their meat was produced is not known. However, the fact that they have been fighting COOL since 2002 suggests they have considerable resources dedicated to its ultimate destruction.