Meat Matters

The Mandatory COOL Saga Is Nearly Over

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A new study revealed that MCOOL of meat products appears to have failed to deliver any of the benefits claimed by supporters.

The saga over mandatory country of origin labeling (MCOOL) has had as many plot twists as a long-running TV series. It’s been both a drama and a cautionary tale. MCOOL became law only after it was attached to another piece of legislation in the dead of night, and this came after years of battling between supporters and opponents. Now the saga looks to be in its last episode.

MCOOL finally was implemented in 2009, but the battle continued. Canada, later joined by Mexico, initiated a complaint with the World Trade Organization (WTO). WTO subsequently ruled in June 2012 that the law is discriminatory against livestock from other countries and doesn’t meet the U.S.’s WTO trade obligations. Then, on Dec. 4, WTO gave the U.S. until May 23, 2013, to bring MCOOL into compliance with its WTO obligations.

Just prior to that, a new study revealed that MCOOL of meat products appears to have failed to deliver any of the benefits claimed by supporters. In fact, MCOOL has resulted in a net economic loss to the meat industry rather than any net gain, the study says. That’s because MCOOL added costs, but didn’t increase demand. Moreover, the beef and pork industries may have been more adversely impacted than chicken.

The key findings of the study, conducted by four agricultural economists, include:

  • U.S. residents are largely unaware of MCOOL and don’t regularly use origin information when making purchase decisions.
  • U.S. consumers prefer meat products with some origin label, but tend to be indifferent to specific provenance details on the label.
  • There is no evidence of consumer beef, pork, or chicken demand responses to MCOOL’s implementation at retail level.

The three-part study included an online survey in April 2012 that was completed by 2,001 people, as well as in-person experiments with consumers in Texas grocery stores. The survey found that only 23% of respondents were aware of MCOOL, 12% incorrectly believed MCOOL was not a law, and nearly two-thirds didn’t know whether MCOOL is law.

Another Perspective: WTO Rules Against U.S. COOL Rule; Now What?

Similarly, the majority of in-person experiment participants didn’t know whether MCOOL was in place, despite standing near a retail meat counter. Furthermore, the majority of in-person participants also said they never look for origin information when shopping for fresh beef or pork products.

These findings appear to vindicate MCOOL’s opponents.

Another interesting finding was that consumers valued meat products labeled “Product of North America” about the same as “Product of U.S.” As the study’s authors point out, the two labels have vastly different implications in terms of trade and segregation costs, despite their similarity.

In fact, the enforced segregation, due to MCOOL, of livestock and meat from Canada and Mexico is at the heart of those countries’ WTO complaint. Canada says its producers have lost tens of millions of dollars.

A North America label might be one way to change the MCOOL law and bring the U.S. into WTO compliance. However, industry officials say a better solution would be to have the current “Product of the U.S.” label, one of four label options under the MCOOL law, apply to any meat products that come out of a federally inspected U.S. plant and thus carry the USDA mark of inspection. Their argument is that an origin label only applies to covered commodities, i.e., meat, so where animals originate from that supply is irrelevant.

Changing the “Product of the U.S.” label to include the above definition would require an amendment to the MCOOL statute. Such action is bound to meet with considerable opposition from MCOOL supporters. But the White House and Congress will be looking for a speedy solution. The WTO clock is ticking and they must act quickly to meet the deadline. If they do, the 19-year MCOOL saga might finally end this May.

Steve Kay is editor and publisher of Cattle Buyers Weekly (www.cattle buyersweekly.com). See his weekly cattle market roundup each Friday afternoon at beefmagazine.com.

Discuss this Blog Entry 5

Anonymous (not verified)
on Jan 2, 2013

All this could have been avoided if proponents had done good market research first. This isn't the time the industry shot itself in the foot by acting on a flawed perception of consumers and what they value in making buying decisions.

Because cost is usually the highest consideration for the majority of consumers much of the time, a wider understanding of basic economics, particularly substitution, would help.
http://commonsenseeconomics.com/about/
Mankiw's 10 Principles of Economics
http://www.slembeck.ch/principles.html

It would also help if our congressman understood economics and followed accounting basics. Look at the last two pages of the bill approved by the House last night - http://www.scribd.com/doc/118551686/Mat-12564 - under Budgetary Effects.

Same as if they were stealing from the till but at the same time passing a law making it illegal for you to count it in and out to catch them with their hands in it.

Anonymous (not verified)
on Jan 2, 2013

If one ever doubted the social bias of our foreign born friend Mr Kay, this article goes along way in exposing it.
Of course consumers were not aware of COOL, heck half the time it took a magnifying lens just to find the label.
Mr Kay and the KSU study would rather have an international commodity label, such as North America label, than a per country one that allows producers in the US to differentiate their product.
As far as consumer preference, both Mr Kay and the KSU study get an F for their analyses, They failed to note that COOL never had any marketing effort to it to give consumers a reason to choose it, even us dumb old ranchers realized that. In fact, when posed with the question in the USDA Checkoff producer survey a few years back, we were asked if we would like Checkoff dollars to be used to promote Made in USA beef, we gave that question the most affirmative of any asked.
I believe along with a vast majority of US ranchers, that educating the consumer why US beef is the most wholesome in the world, and then promoting US beef through some marketing efforts would be very beneficial. But you need to be able to differentiate your product to do that, not continue to have it further masked it in an international, socialized commodity program.
I appreciate Mr Kay with his social background and our friends at KSU with their tenure and entitlement programs may have trouble acknowledging these free market principles.
I also believe that these kind of fraudulent studies from our Land Grant Institutions and some of the policies promoted by Mr Kay and others, have played heavily in the contraction we have seen in the cattle industry the last 20 years or so.

Anonymous (not verified)
on Jan 2, 2013

It seems amazing to me that anyone would even consider not wanting to label our product with its country of origin. U.S. beef for U.S. citizens. This is just another example of NCBA leading their flock of supporters astray. While NCBA does a lot of great work for our industry they tend to push on U.S. cattleman whatever large corpations like JBS or Tyson want. Not always what is best for the U.S. cattleman. Of course a global company like JBS would not be a fan of MCOOL, it causes them extra work and keeps them from sliding through cheaper beef from another country onto our plates with no hassel from the government. Don't blindly follow any organization just because of who they are. Do the research and make your decisions for yourself.

Anonymous (not verified)
on Jan 2, 2013

If you believe that your beef is worth more with a "U.S. origin" label for the consumer, you can already do that without COOL or any help from the NCBA.

The secret is to develop your own specifications, such as the cattle origin, their breed, how they were raised, and so on that increases the product value to the consumer, and submit a proposed label with these terms to the USDA AMS for approval. The USDA also requires submission of production or processing standards and protocols for specific label terms, such as "natural" or "free ranging."

Labeling guidance - http://www.fsis.usda.gov/Regulations_&_Policies/Labeling_Guidance/index.asp

The labeling requirements are here - http://www.fsis.usda.gov/pdf/labeling_requirements_guide.pdf

The label approval process is here - http://www.fsis.usda.gov/Regulations_&_Policies/label_Submission_Approva...

on Jan 4, 2013

I love these guys who come in and take the potshots as "anonymous." Don't shoot the messenger for the message he carries, boys.

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