Significant action was taken last month on two issues which can dramatically impact the value of your beef products, both at home and in export markets.

During September, the U.S. Congress passed legislation giving China Permanent Normal Trade Relations (PNTR), a move that could help open that market for U.S. beef. For cattle producers PNTR for China is an opportunity to take advantage of a trade agreement reached between the U.S. and China nearly a year ago. Under the agreement, China would recognize U.S. Department of Agriculture food inspection standards as equal to its own. Under the PNTR status, China and the U.S. can freely trade goods without annual trade status reviews. China also agreed to lower the tariffs on most U.S. beef products from 45 percent to 12 percent by 2005.

While America was working to open the Chinese market for beef and other U.S. goods, how your beef is labeled for American consumers was also a subject for considerable debate. Several groups continue to push for country-of-origin labeling on all beef products sold in U.S. supermarkets. Currently, mandatory country-of-origin labeling legislation is before the U.S. House of Representatives in the form of H.R. 1144, but those close to the action in Washington say it is unlikely Congress would approve such a measure.

Opponents of mandatory country-of-origin labeling, such as the American Meat Institute, believe the legislation would create untenable barriers to
imported meats, damage the beef industry's ability to export U.S. meats and mandate significant new costs throughout the industry.

A compromise plan, supported by the National Cattlemen's Beef Association (NCBA), the Food Marketing
Institute, Farm Bureau Federation, several meatpackers and retail organizations, is voluntary beef labeling in supermarkets. Such a plan could help achieve many of the objectives of country-of-origin labeling while avoiding many of the costs and problems. (For the record, NCBA supports the proposed mandatory country-of-origin labeling legislation, but also joined the other groups on the voluntary plan.)

The voluntary proposal includes a "Beef: Made in the USA" labeling program, which would allow retailers and food service operators to voluntarily promote beef that was predominantly raised in the U.S. The proposed "Beef: Made in the USA" mark, however, is not limited to cattle raised in the U.S. Cattle raised in Mexico, for instance, but fed for at least 100 days and slaughtered in the U.S. would qualify for the label. The voluntary plan must be approved by USDA.

Sara Lilygren, AMI's senior vice-president of legislative and public affairs, says the costs in implementing a mandatory country-of-origin labeling program are extraordinary.

AMI and the General Accounting Office (GAO) estimate that a mandatory program would cost $1 billion per year to implement.

Voluntary labeling, however, also has opponents. South Dakota Sen. Tim Johnson, who supports mandatory country-of-origin labeling, has urged U.S. Secretary of Agriculture Dan Glickman not to approve the voluntary plan. Specifically, Sen. Johnson opposes the language of the plan that would allow cattle born outside the U.S. but fed 100 days in the U.S. to use the U.S. label.

Neither the mandatory legislation nor the voluntary plan would seem headed for approval during this election year. That would put the whole country-of-origin labeling issue in the hands of a new Congress and possibly a new Secretary of Agriculture next year.