27 May 2018Insights + Opinion
By Ronnie Cummins
Consumers know if the tomatoes they buy in the supermarket were imported from Mexico. They know if the sweater they purchased was made in Vietnam.
<p>They also know if the chicken they toss in their grocery cart was imported from another country. Under Country of Origin Labeling (COOL) laws, these products are required to carry labels that tell you if the product was imported from another country.</p><p>But beef and pork? Those products are exempt from COOL laws. That means consumers have no idea where their steak and bacon came from, unless the producer chooses to label it.</p><p>U.S. cattle ranchers say the failure to require COOL labels on beef is hurting their industry. That's especially true for ranchers serving the fast-growing <a href="https://www.stonebarnscenter.org/wp-content/uploads/2017/10/Grassfed_Full_v2.pdf" target="_blank">grassfed segment</a> of the beef industry said <a href="http://www.whiteoakpastures.com/content/our-team.asp" target="_blank">Will Harris</a>, president of the board of directors of the American Grassfed Association (AGA) and a fourth-generation cattleman.</p><p>The grassfed industry suffers the most because, as Harris told us:</p><p style="margin-left: 20px;">"The U.S. leads the world in the production of grain-fed beef. This production advantage primarily exists because grains and soy are so heavily subsidized under the USDA federal farm program. Grassfed beef producers in America are unsubsidized.</p><p style="margin-left: 20px;">"The subsidies on grain permits our domestic grain-fed beef products to be marketed below the pricing thresholds that would allow stiff competition from imported product. The big winners in the repeal of COOL are the multinational meat companies. This has allowed them to shop for meat in the cheapest markets in the world, and bring it into the best market in the world, and sell it to consumers as 'Product of the USA,' even though the animal had never drawn a single breath of air in the United States."</p><p>Harris, who estimates at least 75 percent of the grassfed beef consumed in America comes from Australia, New Zealand or Uruguay, said American consumers are being <a href="http://blog.whiteoakpastures.com/in-the-moment/from-what-country-are-you-buying-your-beef#0003.0000.0000.0000.0000.0000.0000.0000.0000.0000" target="_blank">intentionally misled</a>. Millions of pounds of beef, imported from other countries, are being wrongly labeled as "Product of the USA," Harris said.</p><p>Mike Callicrate of <a href="https://www.mikecallicrate.com/" target="_blank">Ranch Foods Direct</a> agreed. He told us that:</p><p style="margin-left: 20px;">"U.S. grassfed producers can't come close to competing with cost of production of South American, Australian and New Zealand imports, especially considering producers in the exporting countries are similarly being exploited, forced to produce below cost, by the same multinational packers.</p><p style="margin-left: 20px;">"The loss of COOL was a huge hit on the cattle price, especially grassfed prices due to extremely low cost of supposedly 'grassfed' imports, which allow importers and retailers to make <a href="https://nobull.mikecallicrate.com/2018/05/21/news-mikecallicrate-com-food-monopolies-continue-to-plunder-and-pillage/" target="_blank">ridiculous margins</a>.</p><p style="margin-left: 20px;">"I just returned from a ranch tour in Argentina. They think it's funny that most South American beef is considered 'grassfed.' They said that may have been true 20 years ago, but not today. Their highest-quality cattle prices were 30 percent below the U.S. at the time of my visit. South American beef has also been falsely considered organic by default."</p><p>Ranchers and other advocates of COOL are hoping a revamped North American Free Trade Agreement (NAFTA) will help them restore COOL labels on beef—but time may be <a href="http://www.latimes.com/business/la-na-pol-nafta-talks-stall-20180517-story.html" target="_blank">running out</a>.</p><p><strong>Why Are Beef and Pork Exempt From COOL Labeling Laws?</strong></p><p>COOL was first established under the <a href="https://help.cbp.gov/app/answers/detail/a_id/492/~/requirements-for-country-of-origin-marking-on-goods-imported-into-the-u.s." target="_blank">Tariff Act of 1930</a> which required that, "unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked with its country of origin."</p><p>Over the years, COOL, as applied to meat, has evolved with a <a href="https://www.khlaw.com/A-BRIEF-HISTORY-AND-OVERVIEW-OF-COUNTRY-OF-ORIGIN-LABELING-REQUIREMENTS" target="_blank">convoluted history</a>.</p><p>Under COOL, imported beef and pork were <a href="https://www.americangrassfed.org/court-documents-allege-hundreds-of-millions-of-pounds-of-imported-beef-likely-being-mislabeled-as-product-of-usa/" target="_blank">required</a> "to bear a label denoting the foreign country-of-origin of the beef all the way to the consumer, unless the beef undergoes a substantial transformation in the United States."</p><p>That sounds clear enough, but the "undergoes substantial transformation" in the U.S., along with exemptions under the law for some agricultural commodities, led to a series of changes in the law. <a href="http://nationalaglawcenter.org/overview/cool/" target="_blank">According to</a> the National Agricultural Law Center:</p><p style="margin-left: 20px;">The requirements for listing the country of origin for beef and pork specifically were outlined in the COOL law, but were altered through the evolution of the proposed regulations and litigation with the World Trade Organization. In the original regulations, if the product had not undergone a substantial transformation in the United States, its country of origin was the one that was declared to the U.S. Customs and Border Protection. 7 C.F.R. § 60.200(f). However, if the product underwent a substantial transformation in the United States, the product must have been labeled as "product from [the country it was imported from], and processed in the U.S." 7 C.F.R. § 60.200(g)(2). If commodities were sold together, with only a part of it undergoing a substantial transformation in the United States, all the countries of origin must have been disclosed. 7 C.F.R. § 60.200(h). Similarly, commodities that had different countries of origin and/or methods of production could still be sold together, as long as all the countries and methods were listed, pursuant to 7 C.F.R. § 60.300(d).</p><p>That's more or less how the law worked, with some tweaks here and there, until December 2008. That's when Canada and Mexico sued to overturn COOL requirements for beef and pork, arguing that the law violated international trade law because it discriminated against Canadian and Mexican livestock.</p><p>After much back and forth with rulings and appeals, in May 2015, the World Trade Organization (WTO) <a href="http://www.cbc.ca/news/business/wto-rejects-final-u-s-appeal-on-meat-labelling-1.3078050" target="_blank">determined</a> that the U.S. COOL requirements did in fact violate international trade law. The WTO also <a href="https://www.wsj.com/articles/wto-says-canada-mexico-can-slap-1-billion-in-tariffs-on-u-s-over-meat-labels-1449508424" target="_blank">said</a> the countries could impose $1.01 billion in retaliatory tariffs on U.S. goods.</p><p>Soon after the WTO's ruling, in December 2015, Congress <a href="https://www.forbes.com/sites/nancyhuehnergarth/2015/12/21/quashing-consumers-right-to-know-congress-repeals-country-of-origin-labeling-for-beef-and-pork/#6c5bb56436e5" target="_blank">repealed</a> COOL and Agricultural Sec. Tom Vilsack announced that the U.S. Department of Agriculture (USDA) would no longer enforce the labeling law on beef and pork products. The repeal was a part of the $1.4-trillion omnibus spending bill, which was signed by President Barack Obama.</p><p>The USDA justified its decision by arguing that imported beef is a product of the U.S. even if it comes from a different country, as long as the country of origin has food safety standards similar to that in America.</p><p>U.S. ranchers rise up in defense of COOL</p><p>Ever since COOL was repealed in 2015, U.S. cattle ranchers, including those in the grassfed beef industry, have been vocal on the need to reestablish the labeling law.</p><p>According to a <a href="https://www.r-calfusa.com/wp-content/uploads/2017/06/170619-COOL-Complaint.pdf" target="_blank">lawsuit</a> filed in June 2017, by American ranchers and cattle producers against the USDA and Sec. of Agriculture Sonny Perdue, millions of pounds of beef are now being imported from various countries and labeled as "Product of the U.S.A," despite only undergoing repackaging in the U.S. The lawsuit alleges that this practice violates the Tariff Act of 1930.</p><p>While the lawsuit makes its way through the courts, Kenny Graner, president of the U.S. Cattlemen's Association, is looking for an opening in the recent NAFTA negotiations to strike a deal with Canada and Mexico that restore the labels on beef. (The WTO governs global trade, while NAFTA resolves trade disputes that erupt between only Canada, Mexico and the U.S.)</p><p>In a written <a href="https://www.tsln.com/news/wheres-the-beef-nafta-negotiators-have-the-opportunity-to-answer/" target="_blank">statement</a>, Graner said:</p><p style="margin-left: 20px;">As talks continue on a modernized NAFTA, U.S. cattle producers remain disappointed in the lack of discussion on a WTO-compliant country-of-origin labeling (COOL) program. Country-of-origin labeling remains an important issue for cattle producers across the U.S. and consensus must be reached on how to best respond to consumer demand for accurate information. USCA continues to work toward truth in labeling on all fronts, and we hope the administration will do the same.</p><p>Graner cited industry figures showing that in 1994, the year NAFTA was implemented, the U.S. ran a surplus of $226.7 million in beef and a deficit of $978.8 million with Canada and Mexico combined. By 2016, the surplus in beef had become a deficit of $710.4 million, and the combined deficit in cattle had grown to $1.55 billion.</p><p>Political commentator Tomi Lahren expressed similar concerns in a Fox News Insider <a href="http://insider.foxnews.com/2018/05/08/tomi-lahren-says-trump-must-act-help-cattle-ranchers-beef-industry" target="_blank">report</a>, saying that U.S. ranchers and cattle producers have been "squeezed, poked and prodded by the meat packing industry." She went on to say:</p><p style="margin-left: 20px;">They [the foreign beef producers and the big meat packers lobbyists] control the market. They control the price. They buy this cheap foreign beef, and your American ranchers are going under—and not because they can't compete in quality, but because that can't compete with mystery meat brought in from who knows where.</p><p>If the repeal of COOL is hurting the beef industry, it's even worse for grassfed producers, Harris told us. In an email he wrote:</p><p style="margin-left: 20px;">"I was among the earliest of the American cattle producers who embraced the grassfed protocol. I have seen <a href="https://www.organicconsumers.org/blog/saving-soil-and-their-ranches-raising-100-grass-fed-beef" target="_blank">steady increases for demand</a> of this product for the last 25 years. In the last few months, I have seen most of the necessary-for-production margin premiums eroded by imported grassfed beef."</p><p>U.S. cattle producers <a href="https://www.r-calfusa.com/mandatory-cool-reinstated-nafta-renegotiations/" target="_blank">continue to lobby</a> to get COOL reinstated, as they believe it will help create competition in the beef market, put a stop to consumer deception, reduce market manipulation, enable price discovery and support America's rural economy.</p><p>As Carrie Balkcom, executive director of American Grassfed Association, said:</p><p style="margin-left: 20px;">"Consumers want to know when they go to the market that the grassfed meats they are buying are from these farms and farmers. Farmers that are <a href="http://regenerationinternational.org/why-regenerative-agriculture/" target="_blank">restoring and regenerating</a> their farms. Farmers and farms that are preserving and restoring their rural economies. Farmers and farms that are saving a way of life by allowing these farms to survive so the next generation can be supported.</p><p style="margin-left: 20px;">"Feeding Americans with American products without the worry of whether or not other countries will or will not provide us with food. COOL provides these consumers with the knowledge that they are helping with these efforts. We cannot allow marketing and food conglomerates to decide what goes on a label."</p><p>If you want to support American-grown grassfed meat and dairy, buy directly from a trusted farmer near you or look for products that bear the <a href="https://www.americangrassfed.org/" target="_blank">American Grassfed Association</a> logo to ensure that your food is truly a "Product of the U.S.A."</p>
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