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The COOL nightmare

Country-of-origin labelling (COOL) has become the North American meat industry’s nightmare that refuses to end. Just when the industry thinks resolution is in sight, hopes are dashed and the battle continues.

Opponents and supporters have been deeply divided ever since the idea of COOL emerged in the late 1990s. It’s remarkable that this hasn’t divided the U.S. industry more. The reason is that the vast majority of American livestock producers oppose mandatory COOL. Only a tiny minority support it and they are on the fringe of the industry in terms of influence. But the most bizarre aspect of the COOL battle is that the minority view has prevailed where it counts, in the corridors of Congress and in the law courts.

Remember how Canadian Ag Minister Gerry Ritz last November confidently predicted that Congress through the new U.S. Farm Bill would repeal COOL. I hate to say “I warned you so” but I wrote in this column in December that “it ain’t over till it’s over.” Now it seems the battle will drag into 2015.

Meat and livestock groups in the U.S. and Canada had spent months trying to persuade the Farm Bill authors and other legislators that the COOL rule needed to be amended or repealed to avoid retaliation from Canada and Mexico after they prevail at the World Trade Organization. But the authors crushed hopes that the bill would contain a COOL provision.

Opponents made a solid case. But COOL never became a top priority for the authors or other legislators. COOL got shoved down the list, as the authors struggled to reconcile the much larger issues of food stamp spending, dairy support policy, direct payments to farmers and others. Neither though did the authors sufficiently understand that COOL is already causing considerable hardship both in Canada and the U.S., and probably in Mexico as well.

COOL and the shrinking U.S. cattle herd will claim another packing plant casualty on April 4 when National Beef Packing closes its Brawley, Calif., beef-processing plant. The plant has struggled with a declining supply of fed cattle and faces operating losses for the foreseeable future, says its majority owner. The declining cattle supply largely reflects the big reduction last year in imports of Mexican feeder cattle. The reduction was due to the impact of COOL and a recovery in pasture conditions in Mexico.

From the Manitoba Co-operator website: U.S. meat industry groups want COOL repealed

Cargill idled its Plainview, Texas, beef plant early last year, also because of shrinking cattle supplies in part due to COOL. It had a processing capacity of 4,650 head per day. The Brawley plant has a capacity of 2,000 head per day. That’s a big combined loss for the region and a big blow for cattle feeders in the Southwest.

The failure to put a COOL remedy in the Farm Bill means opponents must now wait for the WTO to determine whether the U.S. remains out of compliance with its WTO obligations. That’s assuming the groups fail in their ongoing legal efforts to get the COOL rule suspended. A WTO disputes panel met February 18 and 19 to hear continuing arguments from the U.S., Canada and Mexico. This process will continue the rest of the year, because one side or the other will appeal the panel’s final decision. Canada and Mexico are widely expected to prevail. The WTO will then allow them to apply $1.5 billion of retaliatory tariffs against a wide range of U.S. exports, including livestock and meat, to both countries. That might start in mid-2015. Then Congress will finally have to do what it should have done through the Farm Bill.

Steve Kay is publisher and editor of Cattle Buyers Weekly.

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A North American view of the meat industry. Steve Kay is publisher and editor of Cattle Buyers Weekly.

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