U.S. appeals COOL ruling
December 13, 2014
The office of the U.S. Trade Representative filed a notice to the World Trade Organization, Nov. 28 that an appeal would be made regarding Country or Origin Labeling. A three-member WTO compliance panel ruled in October that U.S. mandatory COOL, requiring "born," "raised," and "slaughtered" information for meat violated global trade rules and put Canada and Mexico at a disadvantage relative to the U.S. For further details, check out "COOL Conflicts" in the Oct. 25, 2014 issue of Tri-State Livestock News.
Many aggies across the country praised the move. Over 200 organizations signed on to a letter on Dec. 2, urging Congress to stay the course with COOL.
The group's letter specifically urges Congress not to weaken, suspend or rescind COOL in the upcoming legislation to provide funding for the federal government in FY 2015.
The WTO ruling was the result of a challenge made by the Canadian and Mexican governments. They claimed that livestock from their countries are treated less favorably than U.S. livestock under domestic the domestic COOL law.
In a news release, Ranchers-Cattlemen Action Legal Fund- United Stockgrowers of America, said packer concentration, not COOL, is the problem. Their CEO said that the four packers that control 85 percent of the U.S.'s slaughter are able to shun imported beef in order to prove a point – that segregating imported cattle is too difficult for them.
Danni Beer, president of U.S. Cattlemen's Association doesn't buy it.
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"Packers in the U.S. are the most efficient in the world at sorting carcasses. They sort for over 100 different reasons already – from quality grades like prime, select and standard to branded beef products for Angus, Hereford and so many more. It is a different marketing scheme than it was in the 80s and 90s. Today that sorting of carcasses is a part of the business."
Beer pointed out that the U.S. cattle industry is enjoying record highs, which she attributes to COOL in part.
"Right now cattle numbers are at an all time low, and demand is high, but even in a different cycle I think we'd get that direct demand signal back from COOL."
Both groups signed on to the congressional letter.
The National Cattlemen's Beef Association is much less pleased with the U.S. decision to appeal.
"NCBA has maintained that there is no regulatory fix to bring the COOL rule into compliance with our international trade obligations, or that will satisfy our top trading partners. The WTO was very clear in its ruling, COOL discriminates against our trading partners, and we do not see any merit for appeal. An appeal only continues along the current path and brings us closer retaliatory tariffs from Canada and Mexico; a path that will damage our economy and our relationship with our largest trading partners. Congress needs to act to bring a permanent solution to this failed legislation," said NCBA president Bob McCan, Victoria, Texas.
Siding with NCBA, the Canadian Cattlemen's Association adamantly opposes the U.S. COOL law, supporting their federal government's appeal to the WTO.
"Country of origin labeling is a discriminatory trade measure put in place in 2008 with the objective of restricting cattle and hog imports to the United States," said John Masswohl, the organization's director of government and international relations.
While Canada requires a country of origin label on meat that is imported and not further processed, any livestock or meat that is processed after importation is not required to bear a country of origin label.
Masswohl said he sometimes sees U.S. beef in Canadian grocery stores in the summer when domestic production is unable to keep up with demand. And he's ok with that.
"Consumers don't care. I would rather have the Costco bins be full of beef than have no beef at all."
It is because of a significant nationwide herd reduction that Canadian meat isn't always available during the busy summer grilling season he said.
USCA's Beer added that while Canadian imports of live cattle are lower now than before COOL was implemented, the country's entire cowherd has also dropped significantly as the result of the 2003 discovery of BSE.
According to Canadian statistics, the beef cow herd totaled 4,802,400 in 2002 and about 4,228,000 in 2012.
According to USDA National Ag Statistics data, the U.S. imported about 512,000 head of cattle from Canada in 2003, the year BSE was discovered in that country. After dropping to nearly zero in 2004, imports the following year were a little higher than 2003 levels. After peaking at 1,581,000 in 2008, Canadian live cattle imports dropped back down to 786,000 head in 2012.
During the same timeframe, Mexican live cattle imports totaled 1,239,500 head in 2003, dropping to a low of about 700,000 head in 2008, then steadily rising to about 1,466,500 in 2012.
Red Deer, Alberta cattle producer Doug Sawyer hopes the U.S. COOL law is repealed. While he sold his lighter steer calves for about $1,480 per head this fall weighing about 440 pounds, he said a Canadian study reveals that Canadian cattle would be worth about $100 more per head if not for U.S. COOL.
"We definitely need to get this thing fixed. In my view it needs to be repealed and changed so that our two labeling laws are the same. So that it would be a voluntary label. We are shipping cattle every day across there and taking less money on a daily basis."
Sawyer said his federal government plans to impose trade sanctions against U.S. food products if the U.S. COOL is not repealed.
Belvidere, S.D., rancher Kenny Fox doesn't believe U.S. COOL is disriminatory.
"If people want to buy meat from other countries they can. COOL creates fair competition for our industry. I think it is one of the reasons our cattle market is strong today."
Another Canadian cattle producer, Fred Tait, Manitoba, said he has urged his industry and government from the beginning not to fight U.S. COOL.
He was involved in a detailed cattle industry report in 2008. "At that time we looked at the issue of COOL and recommended that we not fight it but that we implement country of origin labeling for Canada. We didn't think at the time that the U.S. was going to reverse itself on it. We thought even U.S. COOL could be an asset if you do your branding of your product."
Tait said he believes Canada has "wasted an awful lot of time" on the issue. "In the meantime we've reduced our cattle herd to such a degree that I suspect Canada might be a net importer of beef."
Canada has made no progress toward eliminating U.S. COOL, but has spent significant time and money trying, Tait said. "How much progress has been made? None. You know what they say if you keep doing the same thing over and over and expect different results. That is a sign of insanity. I would rather label our beef as a product of Canada and that's it."
His country continues to reduce its herd, Tait said and cautioned any country against relying on an export market.
Some industry representatives support a rebuilding of the Canadian beef herd but Tait doesn't agree. "They haven't learned history very well.
"We had an excess of 27 percent above domestic consumption. You don't want to be there. We don't know what will happen next, it could be foot and mouth disease."
While cattle prices even in his country are at record highs, the general attitude is tepid, he said. "We had ten years of depressed prices (after BSE) and it seems that it had the same psychological effect that the great depression had on my parents and grandparents. They always felt it was going to happen again."
Even with rising cattle prices, the producer share of the consumer dollar keeps depreciating, Tait said. "We asked in our study, is that because the retailers today are less efficient than the mom and pop's of earlier decades, or is it because of the market power of the packers and retailers?" Tait said the report presented data and allowed the reader to come to his own conclusion.
Fox said COOL is important to maintain the viability and health of the U.S. industry. "If we have an issue with meat that isn't suitable for consumers, we can correct it. Our parts for our automobiles and tractors, everything has a label. Why is it so bad that food be labeled?"