New label law shakes up U.S. meat industry
CHICAGO (Reuters) - Bryan Karwal raises and sells 18,000 Canadian-born hogs a year on his Iowa farm, but a new food labeling law designed to help consumers threatens that business because it has shut off key markets for the hogs.
The law has also angered Canada and Mexico because, they say, it will hurt demand for their cattle and hogs. It has raised talk of a trade war among the three countries.
The law, called COOL, was implemented last month and requires that labels on supermarket packages of meat and other foods list all the countries where the food came from. The drive for such labels intensified after dairy products from China were tainted last year with the chemical melamine.
To better comply and to avoid stiff fines for labeling mistakes, U.S. beef and pork companies are either refusing or are segregating cattle and hogs born outside of the United States.
This has reduced markets for U.S. producers like Karwal, as well as for producers in Canada and Mexico.
"Right now, the way the situation is, several of the packers said because of COOL they are going to phase out Canadian pigs," said Karwal of Elliott, Iowa.
That will leave him with only a few places to ship his hogs.
COOL stands for Country-of-Origin-Labeling and applies to packages of fresh beef, pork, lamb, goat and chicken.
"Because of the global market, people want to know where their food comes from," said Carol Tucker-Foreman, a food policy expert for the Consumer Federation of America, which pushed for the law. "The bottom line is some people want to buy from American producers."
However, consumer groups say it is too early to determine if consumers are preferring U.S.-only foods.
Livestock producers and industry experts claim consumers will not care and that the extra cost and handling will hurt the meat industry. Plus, price, not country of origin, will guide purchasing decisions, they said.
"I just think retail customers are not going to care, so retailers are not going to care, so packers are not going to care, eventually," said Steve Meyer, economist for the livestock consulting firm Paragon Economics.
Wal-Mart Stores Inc (WMT.N) the largest U.S. grocery chain, said that as long as meat packages are correctly labeled it does not have a preference regarding country of origin.
Beef and pork companies have been most affected by the law because they buy cattle and hogs from producers, who in turn may have bought them from someone else including Canadians or Mexicans, so paperwork is needed to assure country of origin.
U.S. chicken companies own their chickens from the eggs to the meat case, so compliance has been fairly easy. Continued...
