Perspectives in Ag: Experts weigh in on COOL lawsuit
August 7, 2013
On July 8, the American Meat Institute, the National Cattlemen's Beef Association, the Canadian Cattlemen's Association and five other organizations representing national and international meat processing interests filed a complaint against the U.S. Department of Agriculture in an effort to stop the implementation of mandatory Country of Origin Labeling.
Color/BlackColor/BlackThe amended COOL rule requires that beef be labeled as to the country in which the animal was born, raised and processed, meaning some labels could potentially list three different countries if appropriate.
"Imported livestock are a critical supply for American processing plants, particularly those near the Canadian and Mexican borders," states the complaint. It goes on to say that, "the ban on commingling will choke the supply chain at the point of importation."
Another concern of the defendants is "the costs associated with this new, inefficient process will drive some processors dependent on imports out of business and destroy the market for meat from imported livestock," as well as, "new COOL regulations violate the First Amendment, which prohibits compelled-speech regimes in the absence of a substantial governmental interest."
According to Chase Adams, the NCBA director of communications, "there are basically two components to the lawsuit. One is seeking an injunction, which if granted, would prohibit the USDA from enforcing their amended COOL rule. The other part of the lawsuit, looks at COOL as a whole, asserting the rule violates the United States Constitution by compelling speech and that it exceeds the scope of statutory mandate, among other arguments."
However, not everyone in the beef industry agrees with the lawsuit, or the points raised in it.
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Joe Pongratz, Checkoff Committee Chairman for R-CALF USA (Ranchers-Cattlemen Action Legal Fund), from O'Neill, Neb.
Color/BlackColor/Black"There is a real irony here," Pongratz said on behalf of his organization, which is circulating a petition in opposition of the suit. "On the one hand the NCBA defended its use of beef checkoff dollars all the way to the Supreme Court, arguing that, because the beef checkoff program was government speech, producers could not claim it was a violation of their First Amendment rights to be forced to support a message they did not agree with. On the other hand, the NCBA now argues that their First Amendment right is violated because COOL is government speech, which forces its members to support a message that is widely supported by producers — a COOL label — but that the NCBA does not agree with. It looks like producers are losing either way."
"We lost all of our trade partners because of a BSE cow that was imported from Canada several years ago. COOL would allow us to differentiate our product, so if we'd have had COOL in place at that time, our trade relationships would have been maintained because we could have easily identified all meat that had originated in Canada."
NCBA is the number one contractor for the Beef Checkoff, which takes in approximately $40 million for the purpose of promoting beef, Pongratz noted.
"The checkoff is about advertising beef and it doesn't make sense to me when you have the perfect opportunity to advertise U.S. beef from U.S. producers why the No. 1 checkoff contractor wouldn't be supportive of that. I don't know how they can handle our money for advertising and turn against us, especially now when we have the chance to advertise our products."
Consumers have expressed their overwhelming support for COOL, Pongratz added, saying he is frustrated that "an organization that claims to support producers would go against what a majority of producers want. We look at our clothes and where they are from. But the food we put in our mouth, we don't know where it comes from."
On a broader issue, Pongratz said he worries about diseases crossing the border with cattle or beef.
"Everyone talks about open borders and free trade, but what about our food security? If you open your border and they have an outbreak, who's to say that your trade partners will want to continue trading with you?"
Pongratz went on to say, "it makes no sense" that NCBA would support animal traceback — a national animal identification program — but not COOL. They want to put animal traceback on everything so they can tell what county, township, and section my cattle come from, but then when the consumer gets the product, there is no information on the label. All that work is for nothing."
Pongratz emphasized R-CALF USA's opposition to I a national identification program because "it calls for too much personal information and will not slow or stop the spread of animal disease."
Scott George, NCBA president, from Cody, Wyo.
Color/BlackColor/Black"NCBA supports voluntary marketing programs because they have been so successful in rewarding the producer," the beef and dairy cattle producer said.
"Mandatory country of origin labeling has been an absolute failure," he continued, explaining that in order for a label to be successful, the labeler is going to have to spend "a pile of money promoting," citing successful privately labeled programs such as Harris Beef and Certified Angus Beef.
George pointed out that CAB, for example, has helped more than just the Angus breed as a result of their successful marketing campaign.
"I've had a number of Holstein steers qualify for CAB because they were 51 percent black," and he said he was paid a premium in that situation. George also said mandatory labeling will create challenges for retailers and processors who may as a result choose to eliminate imported cattle from their offerings.
"NCBA's focus is two-fold. Number one, we want to help the producer stay in business and stay profitable and, we recognize that if the consumer is not buying beef then we won't stay in business, no matter how good of a producer we are. So we have to address health and safety concerns and other issues to make sure the consumer feels good about purchasing the beef of their choice," said George, explaining that checkoff-financed advertising is one way of accomplishing this goal.
Kansas State University conducted a study that determined consumers are not aware COOL is currently in place and moreover that consumers did not place greater weight on origin labeling than other similarly informative labeling, George added.
George said that COOL regulations could eliminate a substantial amount of imported beef and cattle from the equation, which could tighten supplies, resulting in higher feeder cattle prices.
However he said he worries that cattle prices will drop if processors near the border are eliminated, forcing border state feeders to seek an outlet that is further away.
"They will have to pay more to transport cattle a further distance, so they won't be able to pay as much for those calves," he said. ❖