Live Cattle Marketing Committee

During Thursday’s day-long meeting of the Live Cattle Marketing Committee, cattle producers heard representatives of the retail and packing industries lament the perceived down-side of country-of-origin labeling (COOL) of beef. As dictated by federal legislation, COOL becomes mandatory on September 30, 2004, requiring package labels for whole muscle cuts and ground beef. Labels must carry information about where beef animals were born, raised and processed.

According to Food Marketing Institute representative Deborah White, retailers aren’t convinced that consumers really want the full history of the beef they buy.

"Congress believes that consumers do want to know and the law makes retailers responsible for providing that information," stated White. "We are liable for labeling and label accuracy"

Consequently, she expects retailers to require their suppliers (packers) to provide an audit trail and be responsible for indemnification. Violations of labeling and accuracy provisions of the law call for a $10,000 fine, so retailers will expect to be reimbursed by suppliers providing inaccurate information.

The American Meat Institute’s Mark Dobbs said packers share in the labeling responsibility, because they must provide COOL-related information to retailers.

"We won’t have any other option," said Dobbs. "And we won’t give an option to the people who supply us with slaughter cattle. Accurate producer records will be required. I believe packers will expect their suppliers to sign an indemnification agreement in case a producer provides inaccurate information."

Some NCBA members called the retailer and packer comments "scare tactics" aimed at spurring association efforts to halt COOL implementation. Label advocates claimed consumers do care about where and how beef is produced. Even imported beef bears a USDA quality grade stamp, so consumers may assume it was produced domestically. Advocates say COOL will help differentiate foreign product from that produced in the U.S.

Not all NCBA members were in agreement, with some producers fearful that costs of implementing COOL will outweigh program benefits. Deliberations led to adoption of a measure directing NCBA staff to support Congress or the Administration in re-examination of COOL, prior to implementation, regarding its benefits and potential cost to the industry. The issue will head this committee’s priority list for the coming year.

Another contentious issue prompting members to propose action was captive supply. One proposed resolution called for NCBA support of federal legislation to halt packer/retailer control of livestock that allows manipulative power over livestock prices. Another sought legislated limits restricting a packer, other than a producer-owned entity, from having more than 25% of its slaughter mix (per plant, per day) come from captive supplies. Southern Plains cattle feeders voiced the greatest opposition to both measures and each was defeated.

Among those finding favor with a majority of members was proposal encouraging federal regulatory agency consideration of how agricultural mergers and acquisitions are likely to affect producers. Currently, primary consideration is given to potential impact on consumers, but the adopted resolution urges scrutiny with regard to "buyer-side" impacts.

— by Troy Smith