COOL is less than 4 weeks away

Last week I sat in on a webcast from Iowa State University on the upcoming implementation of Country of Origin Labeling (COOL). Hosted by Dr John Lawrence, extension ag economist and Dr Jim McKean, extension swine veterinarian, the webcast dealt with the myriad of details associated with the September 30 implementation of this federal legislation. While controversy continues to surround this legislation, the fact of the matter is that it will become a fact of life for US pork producers.

 

Because final details of this legislation were not passed until this spring, USDA has just recently published the proposed rules for comment in the Federal Register. It is possible that the rules and regulations will be changed in response to the comments received.

In the meantime, these proposed rules are what USDA will be using to initiate the legislation.

 

The basics of the proposed rules and regulations is that USDA will require retail fresh meat cuts (loins, blade steaks, etc for pork) to be identified in the retail meat display of larger grocery stores. In the webcast John Lawrence estimated that 52% of the US market will be covered under this regulation.

 

The proposed regulations will require fresh meat cuts to be labeled by country of origin in one of four possible manners:

1)      Product of the US. This means the pigs were born, raised and slaughtered in the US.

2)      Product of the US and Country X. This means the pigs were born in country X (most likely Canada) and raised and slaughtered in the US.

3)      Product of Country X and the US. This means the pigs were born and raised in country X (most likely Canada) and slaughtered in the US.

4)      Product of Country X. This means the fresh pork was imported from country X (could be Canada, Denmark, Mexico, etc.). 

 

Every sale of pigs will require an affidavit attesting to the country of origin of that pig(s) or lot of pigs. In the case of sale to slaughter, this means someone with knowledge and access to records to verify the affididavit must sign – its not something you can have a barn worker or trucker do.

 

Many of the producers who read this blog have already had conversations with their packer regarding this legislation and the affidavit. At least 2 packers have stated they will not buy pigs that are not born and raised in the US, which basically means they will not slaughter pigs born in Canada and raised in the US. However other packers are still trying to decide how to implement this legislation.

 

It appears to me that a major factor in implementation of this legislation is the consumer. If the consumer is willing to pay $0.05/lb more for fresh pork labeled as ‘Product of the US’ versus fresh pork labeled ‘Product of the US and Canada’, we can expect many packers to make efforts to participate in this product. However, if the consumer does not distinguish in price between the labels, there will be limited demand by the packers for US born and raised pigs versus Canadian born and US raised pigs.

 

The key to this will most likely be the buying and labeling decisions of WalMart and Kroger. According to the Food Marketing Institute, in 2006 these 2 grocery chains represented 33% of all of the food dollar expenditures of US consumers. If they differentiate between country of origin labels in their advertisements and pricing, you can be sure other chains will follow. Because they are so dominant, you can also be sure that packers will respond to their lead.

 

However, on the flip side, it appears that the US production chain doesn’t expect the labeling at retail to impact production in a big way. I say this based on the 144,000 Canadian feeder pigs that were imported in the week ending August 30. US producers continue to set records for the number of Canadian feeder pigs imported to fill finishing facilities. In fact, at the current pace they will import over 7.1 million feeder pigs this year, up from the 6.5 million imported last year.This suggests that they feel confident that these pigs won’t be discounted by the packer at the time of sale sometime this winter, or that the delivery requirements (such as a specific day of the week or a specific plant if the packer has multiple slaughter plants) won’t cause them problems.

 

Having said this, be aware that everyone in the production chain will be involved in more paperwork as a result of this legislation. I urge every pig owner to contact their hog buyer to be sure they understand what type of paperwork will be required beginning September 30 to verify country of origin. Also, be aware that the legislation requires sellers to maintain normal business and production records to verify country of origin for 1 year in the event that a trace back from the retailer occurs. While chances are small that your farm will be audited, the chance and risk of fines is still enough to justify becoming familiar with the requirements of these regulations.

Leave a Reply

Your email address will not be published.