Voluntary country of origin labelling for beef and pork, biofuel tax credit changes, and an impending U.S. farm bill are three U.S. agriculture trends worth watching according to recent analysis from Farm Credit Canada—particularly as a presidential election looms over the border.
In an article posted to FCC’s website Wednesday, senior economists Justin Shepherd and Graeme Crosbie, questioned the extent to which U.S. consumers will demand “made in the USA” beef and pork once rules when voluntary country of origin labeling (vCOOL) rules kick on January 1, 2026.
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This spring, the USDA ruled that meat processors claiming their product as a “Product of USA” must only use animals born and raised in the U.S. For example, under vCOOL, the four million piglets Canada sends to the U.S. annually would not qualify for a “Product of USA” label.
Canadian hog producers, who already face reduced domestic processing capacity, may face greater risks under this policy, especially with insiders reporting that some U.S. processors intend to enforce vCOOL rules as early as mid-2025, FCC said. Labeling requirements may also reroute trade flows and add costs.
Biofuel tax credit
U.S. tax credits for biofuel production are changing January 25, 2025. This may challenge Canada’s biodiesel industry and domestic canola and soy oil production just as new Canadian crush capacity is coming online, FCC said.
Under current U.S. policy, blenders mixing biodiesel (or renewable diesel) with conventional diesel are eligible for a dollar-per-gallon tax credit. Other policies add further incentives. Historically, almost all Canadian-produced biodiesel has been exported to the U.S. to qualify for these credits.
Under new policy, credit will shift from blenders to producers. This means only U.S.-produced biodiesel will be eligible, although inputs can still come from abroad. Unless a similar credit is introduced in Canada, experts suggest the construction of biofuel plants in Canada will face an upward battle.
The U.S. farm bill
The U.S. is overdue for a new farm bill which sets parameters like commodity insurance programs and price supports for U.S. producers. These bills usually expire after five years but the current bill was given a one-year extension in 2023 that has since run out.
Canadian producers may want to monitor the farm bill for potential impacts, Crosbie and Shepherd said.
“Changes in support prices or insurance programs could alter crop decisions of U.S. producers,” they wrote.
“For instance, better insurance for corn might lead to more corn planting in the U.S., pushing prices down. Ultimately, choices made on U.S. farms significantly affect futures markets and, consequently, Canadian prices for both grain and livestock.”
