COOL rules lead Tyson to close door on Canadian cattle

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The Canadian cattle industry is losing business from a major purchaser as Tyson Foods won’t accept cattle directly from the country to avoid added expenses associated with country-of-origin labeling rules.

The decision is likely to increase feeder-cattle exports. Tyson will continue to purchase Canadian-born cattle sent to U.S. feedlots, however the decision removes the third largest buyer from the Canadian fed cattle market.

Tyson says it doesn’t have the space necessary to separate, categorize and label products in line with COOL requirements. The added process would also raise costs.

“These new rules significantly increase costs because they require additional product codes, production breaks and product segregation, including a separate category for cattle shipped directly from Canada to U.S. beef plants without providing any incremental value to our customers,” Worth Sparkman, a spokesman for Tyson, told Businessweek.

U.S. meat packers have voiced opposition to the rule with claims that it will drive up costs and pose a bookkeeping nightmare. Mexico and Canada are challenging COOL before the World Trade Organization which isn’t expected to be resolved until 2015.

Brian Perillat, a senior analyst at Calgary-based Canfax, agrees that the process Tyson would have to enact to track the carcass as it’s broken down to individual cuts isn’t logistically possible.

COOL was approved by Congress in 2002 and became mandatory in 2009. The rules are estimated to cost processors and retailers between $53 million and $192 million in “total adjustment costs” according to Reuters.

The rule is designed to provide more information to consumers as they make purchasing decisions, but added expenses appear everywhere on the value chain from cow-calf producers to consumers.

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October, 24, 2013 at 09:07 PM

In my opinion this is very bad news and should be a real eye opener for folks that enjoy their T-bone steak, burgers, or other beef products at an "affordable" cost. The average retail beef price per lbs in August was at a record $5.39. The domestic supply of cattle in the US is at its lowest point it has been in 61 years. Now, one of the largest packing companies is "closing it doors" on imported cattle from Canada because the company, "won’t accept cattle directly from the country to avoid added expenses associated with country-of- origin labeling rules." Great policy making Washington, NOT!! I support COOL because it gives consumers information about a product. However, I think it is a HUGE recipe for disaster for the already suffering and shrinking cattle industry. So in a way I guess you could say I am also against it. We will see....

Iowa  |  October, 25, 2013 at 09:42 AM

Great News! Higher Prices For US beef. The New Lobster. Keep Those Food Stamps Coming And Buying The $4/# Hamburger. I Love Those Dumb Asses in Congress Who Passed COOL and Are Too Stupid To Understand The Repercusions. Yahoo $2.00 In The Beef & Going Up. I Will A Millionare Soon.

oregon  |  October, 25, 2013 at 10:24 AM

If Tyson has the ability to control about a third of the U.S. slaughter facilities in the U.S. which it does, you would think they could pay for the country of origin labels (COOL) for the consumers like any other ag products produced. Always look at the profit to be made by the packers selling foreign beef with the U.S. label for their reasoning ($). Rejecting to take Canadian cattle resembles the recent government shutdown. Purely political.

Craig A. Moore    
Billings, MT  |  October, 25, 2013 at 10:36 AM

This is pure political posturing to speed up the Canadian and Mexican fight against COOL. Pushing on their importers and scare tactics to the US public. Like they say about Obamacare, it is the law and must be adhered to and when the public sees the benefits of it they will approve of it. The packers and the folks in their back pocket are the main opponents in the US. They need to give the law a chance to see how well it might be accepted by the public.

Kansas  |  October, 26, 2013 at 07:30 AM

Being no fan of any imports when they are used to distort markets here in the USA. This is precisely why more and more support the enforcement of the Packers and Stockyard Act. I am no fan of open imports at all cost especially when it does harm to a USA industry. And just a reminder to those who put their trust in imported Canadian calves, "you know the risk on price (you buy them cheaper up there in hopes to sell here for highter prices HERE.. and therefore being imported they are probably going to get less here in the USA since consumers care where their food comes from, regardless of what a "few say" the proof is in the real studies that weren't biased) based on "consumer demand", therefore it is still a very unwarranted ploy and shows the market arrogance with this power move". A breakup and strong enforcement of the P&S Law would get their attention! It would accomplish teaching others to not be so arrogant and abusive with "their global market system" and monopolistic market they hold. Fair trade never is a bad deal but becomes bad with free market monopolies.

October, 26, 2013 at 10:01 AM

Tyson seems to want to play by the rules. What a shock when all we hear from crank activists is how big corporations work tirelessly to cheat and poison us all. Actually, Tyson could just as easily stick "made in USA" COOL labels on everything and let it go at that. There is no credible verification process backing up the COOL program. It is just a ditzy honor system intended to damage our food system. Good on Tyson but shame on R-CALF and other devious COOL supporters.

T Glennie    
Montana  |  October, 26, 2013 at 01:00 PM

I would almost bet that Tyson already puts their sticker with made in U.S. COOL labels for our Beef Export market. Why? Because foreign countries demand U.S. beef not a mixture of other countries that are currently accessing our beef market. Even Mexico and Canada demand that our beef is certified as U.S. beef before it is exported to their countries. Tyson makes money by selling to our foreign customers and wants to be able to bring in foreign beef and make U.S. consumers think it is U.S. beef. Let's face it Tyson would have a hard time selling straight Canadian or Mexican beef to U.S. consumers so they either have to comingle it with our beef or hope that COOL is eliminated. Food safety is very important and foreign countries would just love to sell beef here and access our high prices. Even dog food is labeled and consumers can tell if the dog food is from China with the recent pet problems. We need strong, mandatory COOL.

October, 31, 2013 at 10:15 AM

COOL was approved by Congress in 2002 and became mandatory in 2009. The rules are estimated to cost processors and retailers between $53 million and $192 million in “total adjustment costs” according to Reuters That's less than a buck a person to make the adjustment. Everyone knows the cost will be passed on to the consumer anyway. Smells like politics to me.

missouri  |  January, 27, 2014 at 07:42 PM

NAFTA and COOL are a joke. Lets kill the rest of Mexican AG. and wonder why we have a immigration problem. Every illegal Mexican I have met is from rural Mexico and they all say farming became unprofitable in their country that's why their here. Immigration is due to bad policy. We need less governing in the United police states of America. PS at least they just threw direct payments out of the bill.

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