Guenther: Canadian cattle producers, U.S. packers dread COOL revisions

Canadian ranchers and North American packers aren’t looking forward to the arrival of revisions to the U.S. government’s country-of-origin labelling (COOL) rules.

The prospect of Washington’s latest changes to COOL — and the length of the process to appeal against them under world trade rules — left ranchers and others in the beef industry cold at the Saskatchewan Stock Growers Association (SSGA) convention here this week.

Mandatory COOL has been in force since 2008 in the U.S, and was ruled out of order by the World Trade Organization’s (WTO) Dispute Settlement Body and Appellate Body in 2011 and 2012 respectively.

Washington, however, responded to the WTO rulings last month with changes expected to tighten COOL even more, forcing Canada to appeal to the WTO once again.

Steve Kay, editor and publisher of the California-based journal Cattle Buyers Weekly, told SSGA delegates he has heard the WTO panel could rule as quickly as three to six months from now — but, he said, it might also take nine months.

“Then you’ve got the U.S. appealing. So you go well into next year, which is a pretty shocking prospect,” said Kay, also a columnist for Canadian Cattlemen magazine.

Beef producers are running short on patience with the process — but have little choice.

“Like every producer, when I want something done, I want it done now. It frustrates me. I wish that there was something that could be done quicker,” said Mark Elford, chair of the Saskatchewan Cattlemen’s Association.

Ryder Lee, manager of federal-provincial relations with the Canadian Cattlemen’s Association, said frustration with the WTO comes up at every meeting he attends.

“It’s kind of like democracy. When you look at the system, it’s messy and it’s awful — until you consider the alternatives. So it takes a while, but it’s not something we’re new to, either.”

Willie Van Solkema, president of JBS Canada, said JBS’ Hyrum plant in Utah process about 40 per cent fed cattle each week. JBS’ other U.S. facilities are purchasing Canadian cattle as well, he noted.

“With full force, it’s going to be tough for our U.S. facilities. It’s going to be tougher for them to segregate it out and our guys are very nervous that it’ll cost too much to bring those Canadian cattle in,” said Van Solkema.

Next steps

Kay said COOL supporters will pressure retailers about the regulation, which was technically implemented on May 24, to try to force the industry to comply before the six-month grace period is up.

The U.S. meat and livestock industry will now press Congress to act soon to avoid disrupting the industry, Kay added.

Kay sees the U.S. Farm Bill as the best way to fix COOL — but he said he’s not going to hold his breath, as he’s heard the U.S. House of Representatives doesn’t want any amendments to its version of the Farm Bill.

“Part of the reason for that is that the House version of the Farm Bill has much deeper cuts to nutritional supplemental spending — commonly known as food stamps — and other programs, than the Senate version, which has already pretty much been passed by the full Senate.”

Over the next month, the full House will look at its version of the Farm Bill, and then meet with the Senate to reconcile the two versions of the bill, Kay said.

“So we can only hope at this point that during that House farm bill process, that an amendment to COOL is attached.”

Kay sees two possible logical changes to COOL. One would be to revert back to the system where all meat products processed in a federally inspected U.S. facility would be labeled as products of the U.S. The other option would be to make COOL voluntary, essentially gutting the regulation.

Kay said it’s fantastic that the government of Canada came out with a list of possible tariff targets — including all cattle and pork originating in the U.S.

“Those beef and pork exports from the U.S. into Canada last year were $2 billion and $33 million. So that’s a colossal amount that is at stake. Canada, of course, as you know, has got an even stronger case now because it’s going to cost (cattle producers) $90 to $100 a head rather than $25 to $40 now.”

Although most players in the U.S. meat and livestock industry are against COOL, Canada has little choice but to retaliate against them as well, said Lee. Otherwise, people in the other sectors against which Canada is retaliating would call their MPs to complain.

Kay said it will be critical to have a WTO compliance panel hearing Canada’s case including the same people who heard the original complaint, so there is continuity and understanding of the issue.

— Lisa Guenther is a field editor for Grainews at Livelong, Sask. Follow her @LtoG on Twitter.

Related stories:
Last-minute COOL changes a burn for Canada, May 24, 2013
Potential COOL tariff targets shortlisted, June 7, 2013
Mexico says may suspend U.S. trade preferences over COOL, June 11, 2013

About the author

Editor

Lisa Guenther

Lisa Guenther is the editor of Canadian Cattlemen. You can follow her on Twitter @LtoG.

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