12 April 2009 - Be Careful What You Wish For

In the world of agriculture, new rules, regulations and legislation are put in place for beneficial reasons. Occasionally those benefits also bring about some unwanted and unintended results. A recent case in point; the banning of horse slaughter and the export of horse meat for human consumption to foreign countries. That ruling has led to a miserable existence and death for hundreds of unwanted horses that are turned loose and ultimately die of disease or starvation.

Now we have another “unintended result” situation in the world of agriculture; COOL, Country of Origin Labeling, with rules recently put into place that call for the labeling of meat as to country of origin, where that animal was fed and processed before it makes its way to the super market. False labeling or even a mistake in labeling could lead to penalties including heavy fines for processors and retailers who in this global market realize that meat can make its way through several different countries before arriving on the dinner table.

For example, a lot of Canadian pigs come across the border into the United States to be fed out by pork producers. Mexican feeder cattle come across the border to be fed out and processed in this country.

While Australian beef could be imported from that country, it could have originated in another country adding to the challenge of accurate tracking for beef ultimately marketed in this country.

So, what is the unintended result? American producers like Bryan Karwal of Elliott, Iowa who annually feeds out 18,000 feeder pigs that come across the border from Canada are losing their market. Brian has been told recently by several packers that, because of COOL and the concern over proper labeling, they are going to phase out Canadian pigs. Cargill, Hormel, Seaboard and Smithfield have either stopped buying Canadian hogs or will phase out such purchases.

Defending COOL, Carol Tucker Foreman, Consumer Federation of America, said “Because of the global market, people want to know where their food comes from and some want to buy from American producers.” On the other hand, Steve Meyer, economist with a livestock consulting firm said “I just think retail customers are not going to care, so retailers are not going to care, so packers are not going to care, eventually”.

Finally, our two biggest agricultural trading partners, Canada and Mexico are crying foul, claiming COOL regulations are violating trade rules and they have now filed formal objections with the World Trade Organization. So, while COOL has good intentions and benefits, the unintended results are another example of being careful what you wish for.

My thoughts on Samuelson Sez.