By Rachel Dahl
President Donald Trump signed an executive order Sept. 4 directing the U.S. Department of Agriculture to examine how mandatory country-of-origin labeling (MCOOL) could once again be required for beef sold in the United States.
For cattle producers who have spent more than a decade fighting to restore the labels, it is a significant development.
But MCOOL is not back, just yet.
The executive order gives Agriculture Secretary Brooke Rollins 90 days, working with the U.S. Trade Representative, to review the government's existing legal authority to require country-of-origin labeling for beef and conduct an economic analysis of what mandatory labeling would mean under current market conditions.
After that review, USDA may pursue new regulations if existing law allows it. If it determines congressional action is needed, the administration can instead recommend legislation.
Congress removed beef and pork from mandatory country-of-origin labeling requirements in December 2015 after a years-long trade dispute with Canada and Mexico. USDA formally amended its regulations the following year.
Until then, the federal COOL program required retailers to tell consumers where beef originated. The rules generally required information reflecting where an animal was born, raised and slaughtered.
Canada and Mexico challenged the requirements at the World Trade Organization, arguing the system discriminated against imported livestock because cattle and hogs had to be segregated and tracked through the U.S. supply chain.
The WTO ultimately found that the U.S. system treated imported Canadian and Mexican livestock less favorably than domestic livestock. In 2015, Canada and Mexico were authorized to impose retaliatory tariffs worth more than $1 billion annually.
Congress repealed the beef and pork requirements before those tariffs were imposed.
Which may explain why Friday's executive order does not simply direct USDA to put the old labels back on grocery store beef.
Instead, the administration specifically directed USDA and the U.S. Trade Representative to determine what can legally be done now and to analyze the economic consequences before moving forward.
This action follows what has already been one major change in beef labeling this year.
Beginning Jan. 1, meat voluntarily labeled “Product of USA” or “Made in the USA” must come from animals born, raised, slaughtered and processed in the United States.
Previously, imported beef could in some circumstances receive a U.S.-origin claim after processing in this country, and that January action closed that loophole.
However, that label remains voluntary, and that is the difference on which MCOOL supporters have focused.
A packer selling beef produced entirely from U.S. cattle can choose to identify it as American. A packer selling imported beef, or beef derived from imported cattle, generally is not required under the federal COOL program to tell the grocery store customer where that beef originated.
For producers, the argument goes well beyond consumer curiosity, the theory being that U.S. cattle and U.S.-produced beef should be able to compete on origin as well as price.
If consumers value beef produced from cattle born and raised in the United States, mandatory labeling would allow them to identify it at the meat counter. Supporters argue that, in turn, could allow some of that consumer preference to work backward through the supply chain to the producer.
USDA's own research surrounding the voluntary “Product of USA” rule found evidence that consumers place value on U.S. origin. In one USDA-commissioned survey, consumers indicated a willingness to pay more for beef identified as coming from animals born, raised, slaughtered and processed in the United States.
But MCOOL is not without costs – tracking cattle through the system requires keeping records. Imported and domestic cattle may have to be segregated. Packers and retailers have to maintain origin information through processing and distribution.
Those costs were central to the earlier WTO dispute.
USDA now has to answer several questions that have hovered over MCOOL for years:
Can a mandatory beef-labeling system be designed under existing federal law after Congress' 2015 repeal? If not, what legislation would Congress have to pass?
Can a new system provide meaningful origin information without reproducing the trade problems that sank the previous program?
What would compliance cost packers, feeders and retailers?
And perhaps most importantly for cattle producers: Will consumers use the information in a way that changes the value of American cattle?
The United States is operating with its smallest cattle herd since the early 1950s. Beef prices are high. Packing capacity is being reshuffled. Tyson recently announced additional plant closures and the sale of another major slaughter facility.
At the same time, the administration recently moved to increase access to lower-tariff imported beef in an attempt to address high consumer prices, a decision that drew sharp criticism from cattle producers and organizations across the country.
Mandatory origin labeling would not stop imported beef from entering the United States.
It would, however, give consumers more information about where the beef they are buying came from — exactly what organizations including R-CALF USA and the National MCOOL Coalition have been demanding.
Just one day before Friday's announcement, the National MCOOL Coalition said more than 5,000 people had signed a petition calling for restoration of mandatory beef labeling.
And that may ultimately be the point.
Consumers are asking more questions about where their food comes from and how it was produced. If country of origin becomes one of the things they can see at the meat counter, we'll finally get to see whether that information changes what they buy and whether any of that value makes its way back to the American cattle producer.
Photo Credit: Larry Blain