The full effects on producers, packers, retailers and consumers are yet to be known, but it’s certain that the new mandatory country-of-origin labeling law will add costs throughout the pork chain.

Still, things could have been worse for the U.S. pork industry. The original law, which passed as part of the 2002 Farm Bill and required retailers to provide consumers with the origin of certain products, would have necessitated that packers segregate Canadian-sourced pigs and the products derived from those pigs. It also required producers to keep detailed records to prove their pigs’ origin, with a “verifiable audit trail.” The law outlined that fines of up to $10,000 could be levied per violation.

For five years, the National Pork Producers Council worked to repeal the federal meat-labeling law, which it said would place a large financial burden on the U.S. pork industry. NPPC twice — once in 2004 and again in 2005 — helped delay the statute’s implementation, but lawmakers insisted it would take effect this year. (The law went into effect Sept. 30.)

NPPC worked to get changes to the labeling law, which is included in the 2008 Farm Bill, that should make it more palatable. (I personally spent hours with U.S. House Agriculture Committee staff working to address this issue.)

The MCOOL law now requires pork, beef, lamb, chicken and goat meat to be labeled in one of four categories. The law also covers fish, shellfish, perishable agricultural commodities such as fresh and frozen fruits and vegetables, peanuts, pecans, ginseng and macadamia nuts.

Muscle cuts may be labeled as follows:

  • “Product of the U.S.” – Only if the animals from which the products were derived were “born, raised and slaughtered” in the United States. Animals in the United States on or before July 15, 2008, are considered “of U.S. origin.”
  • “Product of the U.S. and another country” – If the animals were born in another country but raised and slaughtered in the United States, such as Canadian feeder pigs.
  • “Imported” – If the animals were born, raised and slaughtered outside of the United States.
  • “Mixed origin” – If the animals were born, raised and/or slaughtered in more than one country – other than the United States.

Ground meat products can be labeled with a list of countries or possible countries from which they were derived. USDA recently clarified that meat from commingled animals, such as a load of U.S.-born and Canadian-born pigs, can be labeled as “product of the United States and the other country.”

Product that is further processed, such as sausage and bacon, are not subject to the labeling law and neither is product sold to foodservice establishments, such as restaurants and cafeterias.

In addition to obtaining flexibility in labeling, NPPC lobbied to ease the recordkeeping burden. Producers may now use existing records, such as normal business records, animal-health papers and import or customs documents, to verify their pigs’ origin. Producers also may provide affidavits about the origin of their animals. (Producers should check with their packers to see how the packers are complying with the law.)

During the six-month period following the “effective date of the MCOOL implementing regulation,” which USDA is expected to issue by Nov. 1, the agency will conduct an education and outreach program addressing the rule’s provisions and requirements. USDA officials have said that the agency will not take enforcement actions during that six-month period.

Using 2007 U.S. production numbers, about 5.5 billion pounds of pork — out of nearly 22 billion pounds produced — would be subject to the labeling law and about 96 percent of that would be labeled “Product of the U.S.”

Despite the mandatory COOL “fixes,” which are included in the implementing regulation, NPPC believes — and outlined in comments submitted in late September to USDA — that the labeling law “will be a costly program that will provide little benefit to U.S. consumers.”

USDA has estimated that the law will cost the livestock industry $2.5 billion to implement and nearly $212 million annually over the next 10 years.

The mandatory COOL law, quite frankly, was pushed by nationalistic interests who think that the soccer (and hockey) moms around the country will always buy American as long as they see a “Made in the U.S.A.” label on the product.

Not to be unpatriotic, but putting a “Product of the U.S.” label on a canned ham, for example, may not help American pork producers if consumers perceive that Danish ham is better. Will consumers really prefer U.S.-made prosciutto over the Italian-made version?

When country-of-origin labeling was voluntary, few retailers participated in it because, according to a January 2004 report on COOL from USDA’s Economic Research Service, “…food suppliers see little or no advantage in labeling domestic products as domestic.”

The ERS report cited several explanations for retailers not using country-of-origin labels:

  • Consumers buy a product primarily based on taste and price.
  • Consumers have a preference for some imported products.
  • Consumers prefer domestic products but not enough to cover retailers’ labeling costs.

That last point apparently was the case in Minnesota, which tried a voluntary labeling program in 2004. It went bust after six months when consumers failed to pick the “U.S.” products enough of the time to justify the extra cost of labeling them.

There’s doubt that much has changed since that state trial, especially with the onset of broad-reaching economic uncertainty. But, while NPPC remains skeptical about the efficacy of it, MCOOL is the law of the land, and the U.S. pork industry must comply. While that shouldn’t put tremendous demands on production systems, the impact will trickle down.


For More COOL Information ...

For general information about the mandatory country-of-origin labeling law, visit USDA’s Web site at www.ams.usda.gov.

For pork-related questions and answers about complying with the law, visit the National Pork Producers Web site at www.nppc.org.