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Ranching Voices Part 4: Does the consumer care what the label says?

Is COOL really the golden goose, or are there other paths for U.S. beef producers to differentiate their products?

Well, 2020 is here, and we are hitting the hot topics early and often in this new year!

Last week, I launched the Ranching Voices series, and in the first three installments, we’ve tackled some particularly polarizing issues that were discussed at a local event I attended, which was hosted by the Foothills Cattle Producers in Wessington Springs, S.D.

These topics included the Beef Checkoff, packer consolidation, out-of-the-box marketing to earn a premium for your beef calves and factors that may impact whether producers will be able to survive with so many factors stacked against them.

In case you missed the previous installments, here are parts 1, 2 and 3:

Leaving no stone unturned, I would be remiss not to tackle the bid daddy of them all — Country-of-Origin Labeling (COOL).

If you’ve been a BEEF reader for very long, then you already know our publication’s stance on COOL.

In a previous blog post titled, “COOL and fuzzy connections,” Wes Ishmael reminds us exactly why COOL was repealed.

Ishmael explained, “Ultimately, COOL requirements were repealed for muscle cuts of beef and pork, as well as ground beef and pork. Those requirements were repealed, in part because the World Trade Organization (WTO) determined that the law violated U.S. trade obligations (restricted trade), based on challenges from trading partners Canada and Mexico. Specifically, WTO gave approval to those two nations to move forward with just over $1 billion of retaliatory tariffs against the U.S.”

In another blog titled, “How cool is COOL? Depends on your perspective,” BEEF Senior Editor Burt Rutherford writes, “BEEF editors are not opposed to the concept of labeling beef. In fact, through the years, you can find many pages devoted to chronicling the innovative efforts of producers to identify and document value-added differences in genetics and management, which are subsequently labeled or branded and marketed to capture the added value.

“Those efforts are, by the way, voluntary and market driven. There is nothing preventing anyone today from voluntarily documenting and labeling beef with country-of-origin information.

“We are opposed to mandatory COOL as it now exists because we believe that it’s bad for the beef business. It adds cost to the packer and retail sectors, while offering no added revenue to dilute the cost. Ultimately, we believe the added cost will be paid for by the production sector through lower prices offered by retailers and packers.”

Sadly, even when beef was previously labeled as a product of the United States, turns out, the consumer didn’t really care or notice.

A USDA Economic Analysis of COOL, prepared for the USDA Office of the Chief Economist and reported to Congress, concluded that when surveyed consumers seemed interested in knowing if their beef came from the U.S., but at the meat case, they weren’t willing to pay for that assurance.

According to the report, “In terms of consumers, USDA’s regulatory impact analyses concluded that while there is evidence of consumer interest in COOL information, measurable economic benefits from mandatory COOL would be small. USDA’s regulatory impact analyses also found little evidence that consumers would be likely to increase their purchases of food items bearing U.S.-origin labels.”

My guess is the majority of consumers are on a budget and opt for the most affordable beef items at the meat case to add to their family’s menu.

For the affluent, they may be looking for more in a label than just the country of origin. And because of value-added brands like Certified Angus or Hereford, grass-fed, organic, all natural, etc., there are many options to meet the needs, values and ethics of these consumers who are willing to pay a premium on their products.

Following his speech at the Foothills Cattle Producers event, Corbitt Wall, of DV Auctions, echoed this sentiment.

When asked about COOL, he said, “Do you remember when we had COOL? Most housewives didn’t pay attention to it. I think mandatory COOL is great, but I don’t think we can get it. With the U.S. Beef Integrity Act, it either is a product of the U.S. or it isn't.”

He added, “There are many reasons why mandatory COOL isn’t good. If a U.S. cow plant receives a load of Canadian origin cattle, what happens when they come through the plant?  They have to shut the entire plant down and sanitize everything from that Canadian group of cattle, because if one trace of those cattle is left in the facility they can no longer label the U.S. cattle that come through later as such.  That slows production — and if you’re all about better cattle prices then you want smoke blowing out of the smoke stacks.”

Wall also noted, “You know, Canadian ranchers operate the same way you do. Their ranches don’t look any different. They dress the same, talk the same and love their kids and their ranches just the same. Want to know what mandatory COOL does to them? It slits their throats. How long can we throw beer cans on the other side of the neighbor’s fence before they are no longer willing to come help you work cattle? I think there are better wins for us to go after.”

South Dakota Senator Mike Rounds also spoke on this subject at the Foothills Cattle Producers event and explained why he believes the U.S. Beef Integrity Act, which he co-sponsored with South Dakota Senator John Thune, would be the most viable option moving forward.

Of the bill, which was introduced in October 2019, Senators Rounds said, “The Beef Integrity Act is designed to be something that we could actually accomplish. We don’t see a forward path with COOL. In adding COOL, we send a death note to that bill that had a good shot of passing. While the Integrity Act may not offer everything you get with country of origin labeling. If we can get packers to actually understand the value of labeling something as product of the USA; if we can show them that there is a strong market for that, that is an awfully powerful tool to have. We know it’s not perfect, but we really feel it’s a step in the right direction.”

The Senator added, “I don’t disagree with mandatory COOL, but I don’t know how to get it designed or working. What we are hoping to be able to do through this act is make this a voluntary product to get around WTO guidelines. Canada is already doing it. This would be a Product of the USA, and there is value to that.”

Learn more about the U.S. Beef Integrity Act by clicking here.

My two cents — we need to take our wins where we can get them, and if a voluntary, producer-driven Product of the U.S.A. label gets the job done, then I support the U.S. Beef Integrity Act. Let’s get it passed and let our consumers decide if they want to pay a premium for it.

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Farm Progress.

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