Commentary: The controversy continues

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North American meat producers lost again this week in a bid to suspend the revised country-of-origin (COL) labeling regulation, as the full U.S. Circuit Court for the District of Columbia upheld by 9-2 an earlier ruling by a three-judge panel that USDA’s labeling requirements neither violate meatpackers’ free speech rights nor exceed the department’s authority.

(Interestingly, Judge Janice Rogers-Brown vehemently dissented, writing that the majority opinion means “A business owner no longer has a constitutionally protected right to refrain from speaking, as long as the government wants to use the company’s product to convey ‘purely factual and uncontroversial speech.’ ” She wrote that the court’s decision “hacks the First Amendment down to fit in the government’s hip pocket. I will not join in the carnage.”)

The revised labeling regulations, which took effect in November 2013, require meat processors to specify the country or countries where an animal was born, raised and slaughtered. Retail fresh meat packages cannot mix muscle cuts from different countries under a “general,” non-specific label.

The imposition of COL has been vehemently opposed by meatpackers for more than a decade in a fight led by the American Meat Institute. In this latest phase, the packers claimed that COL violated their First Amendment rights by forcing them to issue statements against their will. Additionally, they argued that the rule forced them to segregate animals and thus raised their costs.

The second part of their argument is factually correct, but back in March, a three-judge panel of the D.C. Circuit Court rejected it.

“AMI’s argument that the rule unlawfully ‘bans’ commingling fails at a key first step—the 2013 rule does not actually ban any element of the production process,” U.S. Circuit Court Judge Stephen Williams  wrote in March, adding that, “The necessary changes to production are, to be sure, costly for the packers.”

Thank you, your honor, for tossing industry that bone.

To be sure.

The cause of the contention

The current phase of the battle started in 2009, back when COL didn’t require explicit identification of the country of origin at each step in the production cycle, instead requiring a simple retail label stating “Product of” followed by the mention of one or more countries. The earlier regulation also allowed a company to use the simple label for meat processed from animals with different countries of origin as long as the processing and packaging occurred on a single production day.

Canada and Mexico complained to the World Trade Organization that such a vague requirement was hurting their exports, since they had to maintain detailed records, but U.S. meat companies didn’t. WTO upheld the complaint, but instead of COL being junked, USDA instead issued a more precise new rule, prompting a legal challenge and yet another round of controversy.

There are three reasons why COL has been so contentious.

The first is the well-intentioned but ultimately misguided belief among certain producers groups that a “Made in USA” sticker on a package of beef would command a premium price point. As an AMI staffer at the time, I spent several months back in 2003 traveling to a number of USDA-sponsored “listening sessions” to deliver testimony in opposition to the proposed rule.

At each session, the room was divided: A bunch of suits on one side (meat company executives, lawyers and AMI people) and Stetsons and cowboys boots on the other (producer group reps and their hired guns). You could predict the testimony before anyone even opened their mouths, with producers lobbying for the rule always managing to work in the phrase, “American beef is the best in the world.”

Great, and for the most part accurate, but hardly a reason to impose costly new regulations—which, by the way, ranchers and producers resent with a white-hot hatred when such rules impact their operations—but there existed a kind of religious faith among COL proponents that people would be happy to pay more for a package of ground beef if it came with a Stars-and-Strips flag decal on the package.

That proved to be decidedly not the case, and the truth is, most consumers then and now neither know nor care whether the hamburger they’re buying was made with trimmings from Australia or Canada or somewhere else. If the quality was good and the price was right, the minority of shoppers who actually bother to read labels at all could care less.

Second, COL hampers the movement of cattle and meat products that is (at least partly) responsible for the beef industry’s profitability. If Canada can ship feeders to The States for finishing, or send manufacturing meat south for processing, and U.S.-based packers can optimize packing plant capacity up north by reversing that process, everyone in the industry wins.

But when BSE was discovered in North America, the incident became an excuse to close the borders initially and build momentum for COL secondarily, both of which have proven to be counterproductive to the industry’s long-term interests.

Finally, the emergence of global standards for veterinary care, food safety and animal handling is a fait accompli, a reality that USDA latched onto in support of its demand that Asian markets re-open to U.S. beef exports following the discovery of BSE in the U.S herd.

The argument went like this: International rules require that if precautions are in place (ie, removal of “specific risk materials”) and surveillance is conducted at sufficient intensity, then a country’s beef supply is deemed to be safe by OIE, the World Organization for Animal Health.

But neither USDA nor any industry segment can insist on one size-fits-all international rules when it’s to their benefit, and then demand that other countries’ meat products must specifically labeled because there’s an implied difference in the safety and/or quality of their beef or pork products versus ours.

I’m sure there’s a Latin term that describes the legal concept involved.

And there’s an English word that’s also appropriate. It’s called hypocrisy.

The opinions expressed in this commentary are solely those of Dan Murphy, a veteran food-industry journalist and commentator.


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ksdave    
ks  |  August, 06, 2014 at 09:28 AM

Not withstanding the other arguments, the statement: "Second, COL hampers the movement of cattle and meat products that is (at least partly) responsible for the beef industry’s profitability. If Canada can ship feeders to The States for finishing, or send manufacturing meat south for processing, and U.S.-based packers can optimize packing plant capacity up north by reversing that process, everyone in the industry wins." shows the industries lack of respect for the consumer. Its not what the industry wants that drives the industry, its what the consumer wants. Consumers do not care about the logic, lack there of, or hypocrisy of their perceived wants.

grbobf    
Houston Metro Area, TX  |  August, 06, 2014 at 01:13 PM

Overwhelmingly, it appears to be TRUE that consumers WILL NOT PAY a PREMIUM for "USA" beef. However, without COOL (or COL) consumers CANNOT DISCRIMINATE against beef based upon its country-of-origin-labeling. What DOES THAT COST the USA beef industry? Do any of you buy seafood products in the grocery market? I want to be able to DISCRIMINATE against seafood labeled as product of certain countries (e.g., CHINA). "FOOD SAFETY" in China has a POOR track record - melamine & related compounds adulterated milk products, including infant formula, resulting in infant sickness & deaths in ASIA in 2008 (http://en.wikipedia.org/wiki/2008_food_protein_contamination), and, similar melamine (& melamine related compounds) adulteration of various wheat & rice by-products which were imported as ingredients for pet food resulting in pet deaths in the US, Europe, South Africa & Asia in 2007 (http://en.wikipedia.org/wiki/2007_pet_food_recalls) "Sustainability" (farmed or wild caught) of seafood varies by country and is another consumer criterion for discriminating seafood purchases at the grocery market. Look for "sustainability" to become a more important consumer purchasing criterion.

Mike    
Kansas  |  August, 07, 2014 at 11:56 PM

Drovers article against cool: After winning three decisive court cases, some of you still won't accept the law of the USA congress that was passed to identify imported products. Those same groups must support the illegal immigration and open border policy effecting the southern states w a flooding of illegal immigrants! Sorry but a vast majority of USA citizens do not. Nothing wrong with a high fence and large gates to become an American! By the way you can leave your foreign flag flying back home when and if you want to become a USA citizen with tax paying rights you earn by paying something in like all of us have for over 100 years when we left our countries from which we came!


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