Rarely a day goes by that I don’t run across a story addressing country-of-origin labeling. Analysis about the pros and cons of COOL; who it will and won’t impact; how much it will or won’t cost, appear continuously.
How much COOL might cost draws the greatest debate, with fingers pointing back and forth across the industry at estimates being too high or too low.
Whether it falls within $9 billion or $90 billion is of little consequence right now. Yes, it’s wise to get a ballpark idea of the potential costs, but no one knows what the program tally will run, largely because the rules haven’t yet been written. Besides, the early numbers are easily manipulated to reflect the message that you wish to make.
It is safe to say, however, that it will take a lot more time, energy and money to write, implement and maintain the eventual COOL program requirements. For pork, those costs will trickle through the chain to you, the producer, further burdening an industry facing already narrow profit margins.
At the risk of citing one of those early estimates, two Iowa economists say that COOL will increase on-farm production costs by 10 percent, or $10.22 per head. If that additional cost is passed on at the retail level, “U.S. consumers will likely demand 7 percent less pork due to higher prices,” they say.
The export market is the place where U.S. pork producers have the most to lose. The United States is already the highest-priced pork supplier in most parts of the world, which has kept record sales from advancing even further. Higher production and processing costs won’t help that cause.
Unable to send weaned pigs south to finish out on U.S. feed grains, Canada – the United States’ No. 1 export competitor – will grow those hogs out at home. Canada will process those hogs into value-added product and export it to markets to compete with U.S. pork. That includes Canada’s No. 1 pork export market, the United States.
Most countries already like Canadian pork as well or better than U.S. pork. It’s possible that U.S. consumers could respond similarly.
“By 2010, U.S. pork exports could be 50 percent lower than they would be without the labeling program,” say the economists.
Then there’s the fallout of producers who have been buying or contracting Canadian weaned pigs to finish out in the United States. Not only have they invested in buildings and equipment, but they also purchase U.S. supplies and services to get those animals to market. That little tidbit is something U.S. feed-grain producers need to note. After all, there are 5 million Canadian feeder pigs eating their grain.
About the only positive spin I’ve heard in relation to COOL is that it could expedite farm-to-fork traceability. Yes, that’s where much of the cost enters the equation, but there is marketing merit in having a traceable product. It would appeal to consumers at home and abroad. Whether they will pay extra for traceable product is another issue.
However, product traceback is part of a competitive future regardless of COOL.
“Maybe it will remain voluntary; maybe Congress will rescind the program; maybe it will just die,” are all wishes I’ve heard in relation to COOL.
Those are all unlikely scenarios because COOL is part of the 2002 Farm Bill, which makes it nearly impossible for it to disappear. Congress won’t reopen the Farm Bill for fear of it unraveling altogether. Others won’t allow the proposal to fade silently away.
No, the voluntary COOL program will likely become mandatory on Sept. 30, 2004.
For now, your best bet is to express your needs, opinions and interests on the issue. USDA will hold a dozen COOL listening and education sessions throughout the country. For more information on dates and times, go to: http://www.ams.usda.gov/news/065-03.htm
You also should call and write your congressmen. Don’t just count on your associations to speak for you. The squeakiest wheels (and numbers) get legislators’ attention.
COOL is purely a protectionist measure, and it will only serve to cast a chill on the U.S. pork industry’s future.