Country of Origin Labeling (COOL)

and the Beef Industry

March 13, 2003

What Country of Origin Labeling Isn’t

• Is not animal health or food safety– FSIS (meat)– APHIS (animals)

• Is not market grading– AMS

What Country of Origin Labeling is

• Included in 2002 Farm Bill (PL 107-171)

• Amends Ag Marketing Act of 1946• Covers 500+ retail products

– Beef, Pork, Lamb– Fresh Fruits and Vegetables– Seafood– Peanuts

• Administered by AMS

Components of COOL

• Retail product must be labeled• Food service excluded• Excludes processed foods

• Becomes mandatory September 30, 2004

Unprocessed Beef Products Requiring Labeling

• Whole muscle meats– Product of U.S.A.– Mixed Origin– Imported

• Ground beef– Must list all countries in order of

prominence

U S BEEF AND VEAL IMPORTSCarcass Weight, Annual

1.5

1.8

2.1

2.4

2.7

3.0

3.3

1979 1982 1985 1988 1991 1994 1997 2000 2003

Bil. Pounds

I-N-1202/21/03

U S BEEF AND VEAL IMPORTSAs a Percentage of Production, Carcass Weight, Annual

0

2

4

6

8

10

12

14

1979 1982 1985 1988 1991 1994 1997 2000 2003

Percent

I-N-0802/21/03

U S BEEF AND VEAL NET IMPORTSAs a Percentage of Production, Carcass Weight, Annual

0

2

4

6

8

10

1979 1982 1985 1988 1991 1994 1997 2000 2003

Percent

I-N-1102/21/03

MAJOR U S BEEF IMPORT SOURCESCarcass Weight, Annual

0

200

400

600

800

1000

1200

Australia New Zealand Canada Argentina

Mil. Pounds

Avg.1996/00

2001

2002

I-N-3602/21/03

CATTLE IMPORTS FROM CANADA AND MEXICO

Annual

0

500

1000

1500

2000

1977 1980 1983 1986 1989 1992 1995 1998 2001

Thou. Head

Mexico

Canada

I-N-1302/21/03

Labeling Requirements

• Product of U.S.A.– Born, Raised and Processed in the U.S.

• Product of Country X– Labeled from entry until final sale– Label only covers importing country

(not other countries of birth or production)

Labeling Requirements cont.

• Mixed Origin (whole muscle)• Examples

– Born in country X, raised and processed in U.S.

– Born and raised in country X, raised and processed in U.S.

– Born in country X, raised in country Y, processed in U.S.

Labeling Requirements cont.

• Mixed Origin (ground or blended)• Example

– From cattle born and raised in country X processed in U.S.; country Y product; and U.S. product

– Must reflect order of prominence by weight

Recordkeeping

• Retailers must maintain records for 2 years• Suppliers must provide information about

country of origin– Producers, handlers, processors, packers,

importers

• Verifiable (auditable) records– Retailers will ensure with contracts or other

means; suppliers must maintain records– Domestic product must identify location of

producers and production facilities

• Self-Certification is not sufficient

Implications for Cattle Industry

• Record requirements are unclear• Liability will transfer down production chain

– Retail– Wholesaler – Packer– Feeder– Stocker – Cow-calf

• Retailers will shift liability to suppliers for incorrect information

Auditable Record Trail

• Full traceability would require lifetime animal ID

• Less than full traceability may be sufficient but is complicated– Retail product must be traceable to

one or more cow-calf producers• Third-party verification is likely to

be required

Implications for Cattle Industry

• Probable minimum cow-calf records– Owner and location– Breeding herd inventory

• Purchased animals• Cull sales• Raised animals

– Number and Sex of Births by year– Animal sales

• Buyer• Date• Animal sex

Implications for Cattle Industry

• Probable minimum stocker records• Put-together groups

– Seller and location of purchased animals• Date and sex of purchased animals

– Animal sales• Buyer• Date• Animal sex

Implications for Cattle Industry

• Probable minimum feedlot records• Each pen

– Seller and location of purchased animals• Date and sex of purchased animals

– Animal sales• Buyer• Date• Animal sex

Implications for Cattle Industry

• Probable minimum packer records• Each shift or slaughter group

– Owner and location of purchased animals• Date and sex of purchased animals

– Meat sales by slaughter/fab group• Lot number, date and plant

Challenge for the Industry

• Plan for compliance– Beef animals born February 2003 and

later are subject to compliance– Rules are uncertain and subject to change

• Make beneficial use of new information– Use records to improve production and

marketing

• Prepared by:– Derrell S. Peel, Dept of Ag. Econ.

• In collaboration with:– Clem Ward, Dept of Ag. Econ. – Dave Lalman, Dept of Animal Science– Don Gill, Dept. of Animal Science– Livestock Marketing Information

Center