Country-of-Origin Labeling

Groups Seek Reintroduction of American Beef Labeling Act

Thu, 12 Jan 2023 21:11:47 GMT

The United States Cattlemen’s Association, R-CALF USA, among 48 other groups and organizations recently sent a letter to U.S. Senate and House members asking them to reintroduce the American Beef Labeling Act in 2023, which would reinstate country-of-origin-labeling (COOL) for beef in the U.S.

As the letter states, “We the undersigned organizations would like to express our gratitude for your leadership and support of the American Beef Labeling Act ( S.2716, H.R. 7291 ). This commonsense policy has remained popular with the American people since Congress rescinded country of origin labeling for beef in 2015.”

This bill would re-insert the words “beef” and “ground beef” to the existing 2002 MCOOL law, which requires country of origin labels on other foods, such as lamb, chicken, fish, nuts, fruits and vegetables. The bill would further require all beef, including imported beef, to be labeled as to where it was born, raised and harvested.

The joint letter also notes a recent poll conducted by Morning Consult on behalf of the Coalition for Prosperous America (CPA), in which 86% of votes support the American Beef Labeling Act, with 64% of voters who strongly support and 22% of voters who somewhat support the legislation.

Originally introduced in the Senate by Sen. John Thune (R-S.D.) in September 2021, the bill was last referred to the Committee on Agriculture, Nutrition and Forestry.

The letter addressed Sen. Thune and co-sponsors Sen. Jon Tester (D-Mont.), Sen. Mike Rounds (R-S.D.), Sen. Cory Booker (D-N.J.), Sen. John Hoeven (R-N.D.), Sen. Ben Ray Lujan (D-N.M.), Sen. Cynthia Lummis (R-Wy.), Sen. Martin Heinrich (D-N.M.), Sen. John Barrasso (R-Wy.) and Sen. Kirsten Gillibrand (D-N.Y.), as well as U.S. House of Representatives supporters, including Rep. Lance Gooden (R-Texas), Rep. Ro Khanna (D-Calif.) and Rep. Morgan Griffith (R-Virg.).

“Although we did not cross the finish line in the 117th Congress we are confident that with your continued leadership and our support we can ensure that beef produced from U.S. born and raised cattle is distinguished in the marketplace and consumers will have accurate information as to the origins of the beef they purchase for their families in the 118th Congress,” the letter states.

The 118th United States Congress session began on Jan. 3, 2023.

The full list of groups signing in support of the American Beef Labeling Act can be found in the letter .

COOL 2.0 Won’t Improve Producer Prospects

Thu, 28 Apr 2022 17:16:23 GMT

My previous column addressed some of the touted claims in support of COOL . However, the evidence is clear the law failed to: 1. Slow beef import tonnage coming to the U.S., 2. Provide U.S. beef producers better prices compared to their foreign counterparts, and 3. Improve beef demand.

Some of the feedback I received was telling. Much of it proclaiming the data presented doesn’t really matter. The only thing that matters are the believed benefits. And even if COOL didn’t make things better for producers or consumers, let’s proceed anyway because there’s not really any cost associated with implementing the program. So, let’s tackle that perspective.

Let’s first review the issue on the demand / benefit side. As reminder from the previous column, USDA’s Report to Congress: Economic Analysis of Country of Origin Labeling asserted COOL didn’t improve beef demand. The report states: “…we found no evidence that consumer demand for beef or pork has increased because of MCOOL. Thus, our economic analysis finds no measurable benefits to consumers as a result of the MCOOL rules.”

From the cost side, the mandate requires additional compliance measures (e.g. record-keeping, documentation, logistic complexities, etc…). To offset cost associated with those added requirements, the USDA report summarizes demand needed to improve more than 7%. But without any measurable shift in demand, producers are left holding the bag

To that end, USDA models the net outcome from a producer surplus perspective: “…the net gain that producers receive for producing and selling a good…[it] is a measure of the economic welfare or benefit that producers collectively receive for selling a good in the marketplace.” Based on the modeling estimates, implementation of COOL results in producer surplus declining nearly $1.6B (basis 2022 dollars) in the cattle sector over the span of ten years (see first graph). Undoubtedly, that decline will disproportionately harm smaller producers who inherently possess higher costs of production.

(Farm Journal)

Never mind all that, there’s a new rationale for COOL that’s been thrown into the hopper: packer margins. The argument being that packer margins began to surge after COOL was repealed. As such, the law must have been holding the packer in check. And if we reinstate COOL, producers will get back to better days. Right?

That’s not what the data says. The second graph details annual packer gross profit both pre- and post-COOL. Gross margins averaged $191/head in the nine years leading up to COOL (’00-’08). However, that number barely budged during the next seven years (’09-’15) while COOL was in effect.

Widening margins during the past several years have occurred for multiple reasons. The timing of that occurrence post-COOL is coincidental. But it’s important to remember, the absence of COOL isn’t causal to that occurrence. It’s an important difference. And as such, the argument is a head fake. In summary, COOL did nothing to alter packer margins the first time around, so there’s little reason to think this time will be different.

(Farm Journal)

The phenomenon of target-fixation originated during WWII. To make an accurate drop, bomber pilots become singularly focused on their target; but in doing so, they lose track of the altitude and end up flying into the ground. That’s seemingly where we find ourselves with COOL 2.0. It’ll leave producers worse off – not better.

Nevil Speer is an independent consultant based in Bowling Green, KY. The views and opinions expressed herein do not reflect, nor are associated with in any manner, any client or business relationship. He can be reached at nevil.speer@turkeytrack.biz .

Speer: COOL Zombie Walking Again

Mon, 18 Apr 2022 18:46:56 GMT

Belief perseverance is the phenomenon in which people hold on to their convictions despite overwhelming evidence to the contrary. That’s the only sensical explanation as to why we’re once again discussing mandatory country-of-origin labeling (COOL). Somehow the fervor grabbed hold of Reps. Gooden (R-TX) and Khana (D-CA). Their proposed legislation asserts : “…the United States Trade Representative, in consultation with the Secretary of Agriculture, shall determine a means of reinstating mandatory country of origin labeling for beef…”

COOL fans cling to the idea this matters to consumers. Consequently, it then strengthens market prices and boosts producers’ revenue. For example, the “ranch group” explains it like this : “American cattle producers are being unfairly displaced out of their own market. We have got to implement MCOOL immediately to give our cattle producers leverage at the meat counter and the American consumer the accurate information that they deserve. Without MCOOL, we will import ourselves out of a domestic market.” With that, let’s explore what the data says about all this.

First, imports. Claim: COOL will slow imports else “we will import ourselves out of a domestic market.” In other words, advocates promote COOL as an active, non-tariff trade barrier – but that’s the very reason it was struck down by WTO in the first place. Moreover, in an ironic twist, those hopes went unfulfilled the first time around. Rather, as a percentage of total beef supply, beef imports topped their highest levels in a decade (’14 and ’15) – while COOL was in effect. Since its repeal, imports have leveled off at 9-10% of total beef supply – largely in-line with the longer-run average.

(Farm Journal)

Second, producer leverage. Claim: COOL will immediately “give our cattle producers leverage” in the market place. That’s a popular argument because prices reached record highs during COOL. But that didn’t happen because of COOL else Canadian prices wouldn’t have also been surging. In other words, the law made no difference to buyers and sellers – thus providing zero marginal benefit for U.S. producers.

(Farm Journal)

Third, and most important, consumer demand. Claim: COOL provides “…the American consumer the accurate information that they deserve.” But do they care? USDA’s own commissioned research (Drs. Tonsor , Schroeder and Parcell ) noted there was , “…no evidence that consumer demand for beef or pork has increased because of MCOOL. Thus, our economic analysis finds no measurable benefits to consumers as a result of the MCOOL rules.”

The beef industry enjoyed the benefits of new pricing power during the COOL years (’09-’15) – much of that largely attributable to the industry’s previous work emphasizing quality and promotion. However, specific to beef demand, the price / quantity relationship during COOL was weaker compared to the trendline established the nine years prior (’00-’08). ( For more detailed discussion, see Dr. Tonsor’s detailed work regarding COOL and demand. ) Since COOL was repealed, beef demand has jumped to new highs. Seemingly, consumers have responded to what really matters in the marketplace: continuous improvement in beef quality and consistency.

(Farm Journal)

We’ve run this gauntlet once before. But for whatever reason, the COOL zombie just keeps coming back. Undoubtedly, some will argue that this time is different. But that’s a weak argument given the track record. The industry is best served by killing it once and for all.

Nevil Speer is an independent consultant based in Bowling Green, KY. The views and opinions expressed herein do not reflect, nor are associated with in any manner, any client or business relationship. He can be reached at nevil.speer@turkeytrack.biz .