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Wendy Reuer, Published January 29 2014

Product of "U.S.A." or "North America"? Country of Origin Labeling divides ND beef producer groups

FARGO – While most farmers and ranchers celebrated when the U.S. House passed a farm bill Wednesday, some area beef producers who hoped to exclude a provision that demands “Product of the U.S.A.” labels on American meat weren’t pleased.

Country of Origin Labeling, or COOL, requires that U.S. beef be labeled as “Product of the U.S.A.” in stores so consumers know where their meat was born, raised and/or slaughtered.

Supporters of COOL say consumers have a right to know where their meat comes from, but opponents, including U.S. meatpackers, say the law imposes unnecessary costs on the industry and violates free trade. Meat companies say costs are driven up by the extra work to segregate beef by origin.

The COOL provision, which was first implemented in 2008 and remains in the current farm bill approved Wednesday requires meat to be labeled with where animals are born, grown and processed.

COOL is already being challenged in the World Trade Organization following complaints by Canada and Mexico. The two countries claim the system unfairly markets their product and that a “Product of North America” label should be used instead.

Kenny Graner, a Menoken, N.D., beef producer and president of the Independent Beef Association of North Dakota, supports “Product of the U.S.A.” labels. He said changing the labels away from being U.S.A.-specific would hurt an already declining beef industry in North Dakota. The U.S. Department of Agriculture says cattle numbers dropped by 2 percent in 2013 from 2012.

“It secures our space on the meat shelf,” Graner said of the U.S. labels. “We’re proud of the product that we raise, and we shouldn’t disguise it.”

As U.S. cattle numbers fall, import numbers increase to supply the demand. That means more money to outside countries and less money going to U.S. producers, Graner said.

“We have a very straight-forward COOL law,” he said. “It’s marketing 101. You distinguish your product.”

The U.S. also has the highest standards for meat production in the world and allowing meat to be comingled with foreign products not regulated to the same standards could dilute the quality, Graner said.

The North Dakota Stockmen’s Association takes the opposite view. Like the National Cattlemen's Beef Association, which lobbied against the farm bill because it wanted changes in COOL, the state association has spoken against COOL.

Jason Zahn, a Towner beef producer and president of the North Dakota Stockmen’s Association, said COOL drives up the cost of production, which lowers the amount of money packers and feeders will pay him for his feeder calves.

Zahn said that will lead to higher costs for consumers in the end.

“Research has shown that while consumers say they want U.S.-origin beef, they still make their purchasing decisions based on cost,” Zahn said. “If our beef costs more because of the implementation of a costly program like COOL, consumers will likely turn to cheaper, non-U.S. beef or another protein source as an alternative. That will affect my bottom line.”

Tim Skauge, owner of Prime Cut Meats in Fargo, only buys U.S. products and prominently labels them as such in his shop. Like Zahn, however, Skauge said customers really don’t seem to care about the labels.

“No, I don’t think they even notice. I very seldom have anyone ask (for U.S. products),” he said.

Julie Ellingson, executive director of the North Dakota Stockmen’s Association, said her group supports the idea behind COOL, but believes labeling should not be government regulated. Instead, free enterprise would allow for COOL.

“We have some concerns that it diminishes our free market or free enterprise,” she said.

Ellingson is also concerned Canada and Mexico would follow through on threats to impose high retaliatory tariffs on U.S. imports if the labeling continues.

Canada and Mexico plan to argue their case against COOL at hearings before the World Trade Organization in February.

After passing the U.S. House on Wednesday, the 2014 farm bill is expected to be up for a Senate vote next week.


Readers can reach Forum reporter Wendy Reuer at (701) 241-5530