New meat labels tell consumers more, but at what cost?

Take a close look at the label on the meat you buy at the grocery store these days, and you might just learn something. Specifically, how that cut of meat actually travelled through the supply chain.

You could discover that your porterhouse steak was “From Cattle Born in Mexico, Raised and Slaughtered in the United States.” Or that your drumsticks were “Born, Raised and Harvested in the U.S.A.”

The fine print is there because new federal rules about country-of-origin labeling, referred to as COOL, went into full effect Nov. 23. Retailers and meatpackers must now detail where the livestock from which meat came was born, raised and slaughtered. The rules apply to certain cuts of beef, veal, chicken, pork, lamb and goat sold in supermarkets. Processed, deli and ground meats are exempt. The previous labels had to list only the countries the meat passed through.

“The idea of COOL is to have greater delineation of the steps in the process, helping the consumer understand that it wasn’t necessarily grown all the way up to slaughter in another country and then brought here for slaughter,” said Bryon Wiegand, who teaches in the meat science department at the University of Missouri-Columbia.

Adding a few bits of basic information to meat labels may not sound like a big deal. But the meat industry and its supporters in Congress have been fighting the change for more than a decade.

Even now — despite the rollout of the final rule and broad support from consumer groups — there’s a challenge pending in federal court. And the issue is part of the debate in the current farm bill. On yet another front, the governments of Canada and Mexico are arguing before the World Trade Organization that the rules are not fair to them.

COOL costs

For all the hubbub, most meat sold in the U.S.

is not affected by the rules.

“The vast majority of red meats and processed meats that we’re going to see in a grocery store will be from the United States,” Wiegand said.

Still, over the last decade, the COOL debate has been heated, with consumer advocates and smaller farmers and ranchers going up against meatpackers and commodity groups such as the American Meat Institute and the National Cattlemen’s Beef Association.

The industry says that complying with the new rules doesn’t mean just printing new labels for cuts of meat. The rules require the meatpacking, processing and livestock industries to fundamentally change how they do business. Adjustments to plant operations, line processing, product handling, storage, transportation and distribution have to be made to comply with COOL. And those changes cost millions.

Companies now have to segregate animals and their meat all along the supply chain from birth to packinghouse. They have to keep track of details about each animal — and print new labels.

A key issue is that the new rules prohibit commingling – or combining cuts of meat from more than one animal in a single package. Previously, companies could use mixed-origin labels on meat from animals that came from more than one country. Now pork chops from one hog born in Canada and another born in the U.S., for example, must be packaged individually before being stickered with labels saying where they were born, raised and slaughtered.

“It changes a processing plant’s mentality a little bit in that they know, ‘If I’m going to use a product of Mexico, then I’m running that in a separate lot, maybe on a separate day, or in a separate shift,’ 

” Wiegand said. “The accounting becomes a greater hurdle for those companies, and there’s a trickle-down and a cost associated with that.”

The American Meat Institute, a national trade group representing meat processors and packers, estimates the new labeling rules will cost the industry between $300 million and $500 million. The

U.S. Department of Agriculture puts the figure at around $120 million

. Some of that cost may get passed onto consumers.

“The bottom line is it’s going to make the price of meat go up,” said Mark Dopp, the institute’s general counsel. “The price of meat will go up at a time when the price of meat is already at record highs because of the limited supply, given the small herd” and other issues.

This summer, a coalition of the nation’s largest meat and livestock companies filed a motion for a preliminary injunction against COOL. A federal judge denied the motion in September and required the industry to comply. The coalition appealed the ruling, and three judges are expected to hear their testimony on Jan. 9.

“It’s now off to the courts, and that gives us plenty of time to sit back and watch the legal process grind slowly away,” said Ron Plain, an agricultural economist at MU.

Some companies aren’t waiting for judicial relief. For example, Tyson Foods, the nation’s largest meat processing company, stopped importing live cattle from Canada in October. The company says it no longer has enough warehousing space to hold all the additional products and labels it needs to comply with COOL.

And that points directly to the broader global issue.

Trading uproar

Canada and Mexico — the U.S.’s biggest beef and pork trading partners — have long argued that COOL takes business away from their beef and hog exporters. When initial COOL rules were implemented in 2009, they asked the World Trade Organization to investigate. Two years later, the WTO ruled that some features of COOL were discriminatory and inconsistent with the United States’ trade obligations. The U.S. appealed the ruling, but WTO determined that COOL needed to change.

To comply, the USDA earlier this year altered provisions on muscle cuts of meat — resulting in the rules being enforced today. Still, Canada is threatening to retaliate with tariffs on a long list of U.S. imports.

In September, the WTO formed a panel to consider whether COOL was restrictive or harmful to U.S. trade partners.

“It’s going to take a while. Canadian and Mexican trade associations will probably go back to the WTO for an appeal against this,” Plain said, adding it probably will be a year or two before the WTO decision. “And then if it goes against the U.S., we’ll probably appeal and add another year or so on this.”

In the meantime, some congressmen are hoping to change COOL through a new farm bill, which looks unlikely to pass this year but could advance in January.

The latest House version of the farm bill requires Agriculture Secretary Tom Vilsack to conduct an economic analysis of the effect of country-of-origin labeling on consumers, producers and packers no later than six months after a new farm bill is passed.

During a recent farm bill committee meeting, Rep. Frank Lucas, Republican from Oklahoma and chairman of the House Agriculture Committee, said he was closely watching the pending WTO case related to COOL and potential retaliation from Canada and Mexico.

“I am hopeful that working together we can prevent the imposition of tariffs on a wide array of products important to many states,” Lucas said.

The American Meat Institute also has urged Congress to use the farm bill to repeal COOL.

“All we’re doing is throwing some additional costs into the system for an issue or information that we believe consumers don’t really care about,” Dopp said.

Consumer groups disagree. Shoppers care about the path their meat took before it got to the grocery store, said Chris Waldrop, director of the Food Policy Institute at the Consumer Federation of America. A recent federation poll showed that 90 percent of Americans believe they have a right to know where the fresh meat originated, he said.

“Consumers like this information and they really do want to know where their food comes from,” Waldrop said. “And this COOL label provides them that info when they’re in the supermarket.”

Some consumer groups and advocates for smaller farmers and ranchers also have pushed for the rule because of potential health or food safety concerns.

“My local producers are proud of the products they produce,” said Chandler Goule of the National Farmers Union. “They want to be able to tell the consumer that this product is from the U.S. — it was raised here locally — so the consumer has information to make an informed decision when they’re in the grocery store.”

But the USDA calls COOL a “consumer information program,” not a food safety issue. Whether processed here or abroad, all meat goes through food safety checks that are equivalent — though not necessarily identical — to those in the U.S., according to the USDA.

Restaurants and food service providers are exempt, as are grocery stores that buy less than $230,000 a year in fresh fruits and vegetables. Processed food items, which the USDA defines as commodities that are altered through any sort of cooking, curing or mixing, are also exempt.

So even if the USDA’s new rules stay on the books, it’s impossible to know where much of our meat comes from.

Outside an Aldi supermarket in Columbia, Mo., Rod Lake recently examined a big ham he had just bought, which he hoped was born, raised and slaughtered in the U.S. But since the ham had been previously cooked, and therefore was exempt from country-of-origin labeling rules, Lake couldn’t be sure.

“I can’t answer you on this,” he said. “I don’t know. I don’t see it real readily on there.”

For its part, the USDA says it is monitoring country-of-origin labels on meat in grocery stores and will follow up with retailers if they are not complying with the new rule.