Mandatory country-of-origin labelling for meat could virtually freeze the American hog industry in its tracks and hand the world’s growing pork export market to Canada.
That is one scenario set out in a report commissioned by the American National Pork Producers Council and written by Dermot Hayes, an economist at Iowa State University and Steve Meyer, an American pork industry economist.
The conclusion drawn by NPPC from the report is that there would be great costs to U.S. hog producers and almost no benefits from mandatory COOL.
Read Also
Huge Black Sea flax crop to provide stiff competition
Russia and Kazakhstan harvested huge flax crops and will be providing stiff competition in China and the EU.
Another argument against making COOL mandatory is welcome news for Canadian hog producers.
But, a cursory read of the Hayes and Meyer report could leave the impression that a mandatory COOL would be good for Canada over time.
In reality, it would devastate Canadian and American hog and cattle farmers and directly benefit their true competition, the chicken industry and Brazilian pork producers.
The report says a trace-back system under COOL would increase U.S. hog production costs by about 10 percent or $1 billion US and retail pork costs by about seven percent, discouraging consumption.
If allowed into the U.S. at all, Canadian hogs would be severely discounted, which initially would be devastating to Canadian producers.
But Hayes and Meyer believe Canada would avoid an industry melt down thanks to a federal and provincial government rescue.
They see Canadian hog packers expanding to process formerly U.S.-bound hogs. The meat would be exported, taking global market share that otherwise would have been shared with American meat.
A mandatory COOL would indeed focus the Canadian industry on overseas exports, but Hayes and Meyer’s suggestion that Canadian producers would ride out this storm thanks to government help is optimistic.
Rather, COOL would stagger the Canadian and U.S. hog industries for years, allowing the fast-growing Brazilian hog industry to capture market share.
Since 1996, Brazil’s pork exports have grown 450 percent, making it the world’s fourth largest exporter.
The American chicken industry would also be whistling a happy tune. Inexplicably, chicken is not included in the COOL legislation. It would happily widen its lead over beef and pork during the chaotic labelling implementation.
The American supporters of COOL must ask themselves why they want to hand such an advantage to their real competition.
