It didn’t take long for the fur to start flying after the United States Department of Agriculture posted its rules for country-of-origin labelling on Oct. 30.
The most damning aspect of the 200-page report is an economic analysis that says there are negligible benefits to any sector, which left many asking why the American government continues to pursue such an unpopular law.
“That question is being very actively engaged as we speak in the U.S. right now,” said Dennis Laycraft, executive vice-president of the Canadian Cattlemen’s Association.
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His organization is one of many livestock groups united in their criticism of the law, which is scheduled to come into effect next Sept. 30 and affects beef, pork, lamb, peanuts, fish, fruit and vegetables.
In its report, the USDA estimated that first year implementation costs for producers, processors, wholesalers and retailers ranges between $582 million and $3.9 billion US.
“Basically the only industry that benefits from this is the poultry industry … and that is because they were exempt,” Laycraft said.
Martin Rice of the Canadian Pork Council said mandatory labelling appears to add costs and reduce competitiveness for American producers, who have been working hard to build an export market.
“When they are looking at adding millions if not billions of dollars to their distribution industry, that is going to have a pretty sizeable impact on their ability to deliver product to other countries at a cost competitive price,” he said.
The bill has created uncertainty for Canadian exporters who ship live weaner pigs to the American Midwest, where feed and rearing costs are less expensive.
“That is a huge industry for the sellers of the live animals. A lot of those producers are specialized in their sales and have contracts to sell piglets to U.S. customers,” Rice said. “It is has created a lot of worry for the buyers and sellers.”
There are expected to be additional costs for packers who buy a lot of Canadian hogs. They may not be willing to offer segregated cooler space or specific days to kill Canadian animals.
“Those costs make it less attractive for them to buy Canadian born animals and it is questionable if they can even operate their plants at competitive levels,” Rice said.
Many of the anticipated costs are in record keeping and tracking systems that must be developed and maintained to verify country-of-origin labels. The records must state where animals were born, raised and slaughtered, and the burden of proof rests with producers, who must be able to verify their livestock were born in the U.S.
In a News release
news, the Montana Stock Growers Association said the annual average cost is $180 to $443 per producer for record keeping and tracking.
In an Oct. 27 news conference, the National Cattlemen’s Beef Association and National Pork Council argued this is not the time to introduce a mandatory labelling law that imposes added compliance costs. They prefer a voluntary program.
“We certainly hope that Congress can find a way to rework this law so it helps, not hinders, the profitability of our cow-calf producers and feel that a market-driven, producer-led country-of-origin labelling program will allow producers to participate at their choosing without incurring these unnecessary costs,” said Brian Dierlam, director of legislative affairs for the NCBA.
The American pork industry has said the law could harm the export market because of added record keeping costs to producers that other countries do not have.
“This is really going to destroy our export markets in the pork industry,” said Jon Caspers, president of the National Pork Producers Council.
“We see it having major impacts in the long term. We’re going to pass our export markets on to the Canadians.”
