The mandatory country-of-origin labeling program is going to cost the U.S. pork industry some big bucks. That’s the conclusion of an economic analysis of CCOL conducted by agricultural economists Dermot Hayes, Iowa State University, and Steve Meyer, Paragon Economics.
These economists examined the potential impacts of COOL on behalf of the National Pork Producers Council. They estimated the costs for producers to implement a full traceback system associated with COOL would be $10.22 per hog or $4 per 100 pounds. This equates to a 10 percent increase in on-farm production costs or approximately $1.02 billion for the U.S. pork industry.
“Some surveys show that U.S. consumers favor country-of-origin labeled meat,” says NPPC president-elect Jon Caspers. “But there is no evidence that U.S. consumers are willing to pay a premium for labeled products.”
In addition, Hayes and Meyer contend that by the year 2010, U.S. pork exports could be 50 percent lower because Canada would be forced to slaughter the 5.7 million hogs and pigs it ships to the United States.
“The U.S. would no longer add the value of corn and soybeans to these Canadian hogs,” says Caspers. “Canada would add the value and export the pork.
The recordkeeping burden also would burden pork producers and add more costs. USDA estimates that COOL will cost $1.9 billion for all sectors of the U.S. economy. While activist groups contend both estimates are too high.
NPPC is opposed to mandatory COOL meat labeling because of the added on-farm costs placed on pork producers. NPPC wants COOL to remain voluntary.
NPPC wants Congress to hold hearings on COOL, which is part of the 2002 farm bill. The group will lobby to have the labeling requirement remain voluntary or to have the entire requirement thrown out before it can take effect next year.