“Let me make sure I understand this right. If the country of origin labeling (COOL) law stands and the industry isn't in compliance come the end of September 2004, then retailers will have no domestic beef to sell, and food service will be able to buy beef cheap because there will be such a glut of it?”
That was the question raised by a caller recently. The caller was with an outfit that consults with lots of this nation's food retailers in matters of public policy.
My answer was, “Yep. In theory, at least, that's the end result.”
By now you know that COOL, which is currently voluntary, will become mandatory by Sept. 30, 2004. That's what the 2002 farm bill stipulates.
The law will require retailers of certain agricultural commodities (beef, lamb, pork, fish and shellfish, but not poultry) to label these products with their country of origin. The law applies to commodities sold at retail level, but not at food service level.
That means, in the case of beef, that a retailer must label a steak as originating in the U.S. or some other country. Under penalty of law, that retailer will also have to be able to verify that fact.
It would seem obvious that complying with the law begs some sort of system-wide, common identification and traceability program. But the very law that mandates COOL also prohibits USDA from creating an identification and traceability system. How's that for a great example of the entire meat industry taking careful aim at both feet, then opening fire?
It's not surprising then that Washington insiders report congressmen are scrambling to figure out how to get themselves out of the corner they've painted themselves into by passing such a no-win law. Nor is it surprising that most agricultural commodity groups are demanding that congress reconsider the law.
What It Means At Home
Certainly, the groups that lobbied for the legislation are still patting each other on the back, actually still believing that the law can be easily implemented, cheap and of great value to the consumer. Whether you're for or against it, though, you've got to start figuring out how COOL could impact you at home, if the law stands as is.
Forget for a minute the estimated $2-billion cost in the first year to implement mandatory COOL. This cost will come out of the industries' pockets.
Forget, too, that non-compliance means either an economic wreck like the beef industry has never seen as about half of the retail market disappears overnight; or, retailers and suppliers could play an expensive game of catch-me-if-you-can with USDA, accepting any penalties that come their way in return for doing business as usual. Of course, those penalties will likely be passed on to their suppliers — perhaps all the way to the cow/calf level. Again, added cost with no value in return.
And, forget the fact that no one has any way of knowing, even if COOL stands as is, how the mandatory rules will look compared to the voluntary ones. We have to go by what we know today.
Retailers Look To Packers
So far, where beef is concerned, the retail response to compliance has been to demand their packer suppliers provide COOL compliance. In turn, at least one packer has so far sent a letter to its feedyard suppliers saying that future patronage will require them to be able to provide COOL verification on all the cattle they send. The more cynical among us might interpret this to mean that cattle feeders are getting hung so far with liability for the entire system.
Does that mean that cattle feeders, in response, will discount cattle that come to them without some sort of COOL verification from the originating producer? Before that happens, could it be that the food-supply chain will come together and collectively figure out a way to comply with the laws in such a way that no single segment has to bear the entire cost burden? (Incidentally, at least one group is currently hard at work trying to accomplish that very thing.)
Nobody knows. But consider the fact that, come Sept. 30, 2004, cattle approximately 18 months old and younger will fall under the new law. That means cow-calf producers should be figuring out how they can identify the calves born beginning this spring, and pass that COOL verification of their calves' identity forward.
It could be as simple as visual tags applied at weaning and recorded in a calving book, or as elaborate as electronic identification applied at birth and recorded in a computer. Either way, the dearth of a common industry system means following cattle will be clumsy and cost-ineffective at best, until such a system exists.
But at least you'll have the information you need to play the game as it's currently written. Some associations, including NCBA, — and land-grant universities — are already gearing up to help their producers feel their way. A good place to start is simply by asking your customers what they'll be requiring of you.
Above all, pay attention to developments as they unfold. Even if COOL is delayed or rewritten, chances are the essence of identification and traceability beyond the pasture will remain in this law or another one not far down the road.
“One more thing,” said the voice inquiring over the phone about COOL. “I don't understand how the industry ever let this happen to begin with.”