Canadian Livestock Producers May Soon Feel The Heat Of New USDA COOL Policy

By Sam Lewis

Upcoming labelling policy in U.S Farm Bill may crush Canada’s livestock industry

The most recent version of the U.S. country-of-origin labelling (COOL) policy will go into effect on Saturday, Nov 23. Cattle and hog producers are saying the update will add more strain to the already struggling pocketbooks of Canadian livestock producers.

The policy was approved back in May by the USDA, but has been on hold over the last six months. The new rule will require meat products to have labels showing where an animal was born, raised, and slaughtered for the food market. Companies in the U.S. will not be able to package meat coming from animals of different origin countries together. The worry from some U.S. companies is the added cost of sorting, labeling, and storing meat from Canada differently than that of domestic animals. Inflated prices at the farm may lead to many producers of livestock falling out of business.

According to the Canadian Pork Council, the first version of the policy, introduced in 2008, put a stranglehold on the pork industry. Canadian producers felt a hit of $1.9 billion due to American companies not buying pigs ready to be slaughtered in Canada. The Council’s current fear is that American pork companies will stop buying from Canada altogether. “It would appear that we are going to lose, or we have already perhaps lost, another three or four U.S. plants that formerly were buying some Canadian-born animals and no longer will do so,” says Martin Rice, executive director at the Canadian Pork Council. “This new COOL rule will further lessen the number of producers who can sell into the United States.”

Producers of beef have already felt the woes of new labelling rules. In October, Tyson Foods — one of the largest U.S. buyers of Canadian cattle — said it would stop buying from Canadian producers due to increased cost of abiding by the new policy. However, not everyone in Canada is giving up hope. “A lot of people are really holding their breath and hoping that maybe in this U.S. farm bill there will be some kind of a fix here in the next couple of weeks,” says John Masswohl of Canadian Cattleman’s Association.

Gerry Ritz, Canada’s Federal Agriculture Minister, argues that the new labelling policy will hurt both American and Canadian producers. Ritz met with Congress and U.S. Secretary of Agriculture, Tom Vilsack, on Thursday, Nov 21. He told them there is support for Canada’s position, but amending COOL may prove difficult. “That is a 50-50 proposition at best. There are major problems here trying to get anything through Congress at this level,” Ritz says.

For now, groups like the Canadian Cattleman’s Association can only watch for updates to COOL as they progress. But that’s not to say that they’re not ready to take action if a resolution isn’t made, and soon. “Either we are in for some good news of a fix by the end of this calendar year or some companies in the States are going to make these decisions about their packing plants,” Masswohl says. The Canadian government is prepared to retaliate with its own imposed trade sanctions on the U.S., totaling $1.1billion. While regulations are a necessity to maintain safety in the supply chain, at what point do they transition from help to hindrance?

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