FOR IMMEDIATE RELEASE:

Cattle Industry Leaders Testify on Mandatory Labeling

FORT WORTH, Texas, May 5, 2003—A voluntary, rather than mandatory, country-of-origin labeling (COOL) program was the clear preference at the May 1 USDA listening session in Austin. 
          Bob McCan, president of Texas and Southwestern Cattle Raisers Association from Victoria, began the four-hour hearing. “Labeling beef as to its country of origin is a worthy concept,” he testified. However, TSCRA supports a voluntary program rather than a mandatory program with burdensome regulations and undefined costs to the producer.
          The Texas Cattle Feeders Association has a similar position. “TCFA strongly supports voluntary COOL as a viable alternative to mandatory COOL,” testified Ernie Morales, TCFA chairman-elect from Devine. “Our position is based on the premise that, if benefits exceed costs, voluntary labeling would be supported by the market. Mandatory programs are only needed when consumer demand will not pay for the increased costs.”
          Discussions with USDA officials have convinced TSCRA and TCFA leaders that cow-calf and stocker operators, along with cattle feeders, will be required to maintain extensive and auditable records to ensure compliance with the law. 
          Morales said many cattlemen question the intent of mandatory COOL. “Maybe it was adopted to create trade barriers for imported feeder animals from Canada and Mexico. We should think twice about discriminating against our Canadian and Mexican neighbors. Mexico was the largest importer of U.S. beef and beef products last year. We cannot afford to jeopardize this market with artificial trade barriers that create retaliation against our products.”
          McCan pointed out that COOL fails dismally as a consumer information law. “Approximately 80 percent of foreign beef consumed in the U.S. is through foodservice or processed products,” he pointed out. Since these two categories are exempt from country-of-origin labeling, consumers will seldom be able to identify and choose U.S. beef on a restaurant menu or in a processed product at the grocer.
          Many producers question the costs of COOL, Morales said. “Mandatory COOL will add costs to the production, processing, distribution and sale of beef,” he said. “Estimates range up to nearly $10 billion for the beef industry alone.” While Morales said considerable debate exists over what the actual costs will be, “they will be significant because Congressional intent requires a verifiable, record keeping audit trail.”
          In addition, there is not sufficient evidence to suggest consumers will pay a premium for all-U.S. beef, or that they will continue to pay a premium in the future. “Therefore, we are extremely reluctant to assume additional costs of a COOL system if there is a chance the benefits will not be sufficient to cover such costs,” McCan said.
          He went on to point out that cow-calf and stocker producers are in the uncertain position of owning calves now that must comply with a law that goes into effect September 2004 and that regulations for the law have not yet been written.
          Commodity producers from Texas and the Southwest addressed Undersecretary Bill Hawks and TDA Commissioner Susan Combs. The majority of the agricultural producers who testified were opposed to the mandatory program. Nearly two-thirds of the speakers cited the onerous burden of record keeping, the crippling expense of reconfiguring meat processing businesses; the threat of stiff penalties; and the likely prospect of having to significantly alter their foreign purchases of cattle and fed calves, leading to worries of reciprocal action with foreign trading partners. 
           Of the minority who support mandatory COOL, the common thread of their comments appeared to be the “yes, but…” approach. While they approved of the intent of the law, they seemed alarmed at the burdensome record keeping which appears to be necessary to comply with the law as written.
          Texas and Southwestern Cattle Raisers Association is a 126-year-old trade organization whose 12,800 members manage approximately 3.6 million head of cattle on 52.9 million acres of range and pasture land, primarily in Texas and Oklahoma.

—TSCRA-25-2003—