New label law shakes up U.S. meat industry
April 13, 2009
A new food labeling law designed to help consumers threatens small farm businesses, reports Reuters. The law, called COOL, was implemented last month and requires that labels on supermarket packages of meat and other foods list all the countries where the food came from. To better comply and to avoid stiff fines for labeling mistakes, U.S. beef and pork companies are either refusing or are segregating cattle and hogs born outside of the United States. The law has angered Canada and Mexico because, they say, it will hurt demand for their cattle and hogs. It has raised talk of a trade war among the three countries. This has reduced markets for U.S. producers, as well as for producers in Canada and Mexico, leaving them with only a few places to ship. COOL stands for Country-of-Origin-Labeling and applies to packages of fresh beef, pork, lamb, goat and chicken. Livestock producers and industry experts claim consumers will not care and that the extra cost and handling will hurt the meat industry. Plus, price, not country of origin, will guide purchasing decisions, they said. Consumer groups say it is too early to determine if consumers have a preference for U.S.-only foods. Beef and pork companies have been most affected by the law because they buy cattle and hogs from producers, who in turn may have bought them from someone else including Canadians or Mexicans, so paperwork is needed to assure country of origin. U.S. chicken companies own their chickens from the eggs to the meat case, so compliance has been fairly easy. Historically, the United States has been an important market for Canadian cattle and hogs and Mexican cattle, as the animals are fattened here and slaughtered in U.S. meat plants. Many businessmen worry the two countries, both important markets for U.S. goods including meat, will retaliate with tariffs or other action. Canada and Mexico have both taken their cases regarding restrictions brought on by COOL to the World Trade Organization.