U.S. meat and livestock groups this week sharply objected to newly implemented U.S. Department of Agriculture requirements on country-of-origin labeling, saying the changes violate World Trade Organization rules and could cost meat packers, such as Tyson Foods Inc., as much as $47.3 million collectively to implement, based on the regulations published in the Federal Register.
Under the change, which went into effect Thursday, producers and processors are required to identify where each farm animal was born, raised and slaughtered.
The change is intended to bring the U.S. into compliance with the trade organization’s rules.
Canada and Mexico objected to the change because many U.S. meat packers ceased buying from those countries, fearing that many consumers would not buy foreign-raised beef or pork.
But under a U.S. law that took effect in 2009, food processors already must identify the nation of origin for cattle and hogs.
That law was introduced and passed after the discovery of bovine spongiform encephalopathy, commonly known as mad cow disease, in a cow that was bred in Canada.
The American Meat Institute said, however, that the new rules on identification are “far more burdensome than the original.”
The earlier rules, the meat institute said, cost meat and poultry processors as much as $500 million in the first year as a result of new reporting requirements on segregation of livestock, record keeping and packaging.
The institute warned that the new rules make it a “virtual certainty that several meatpacking establishments will ultimately close because of the costs they will be forced to incur to implement the proposal’s requirements.”
“It’s a difficult system to comply with, and we don’t think it brings the U.S. into compliance with the World Trade Organization. It’s an extremely costly rule,” said Adam McClung, executive vice president of the Arkansas Cattlemen’s Association. “It will end up costing us money and allow Canada and Mexico to retaliate, and consumers don’t really care about it.”
The federal government has estimated that the augmented labels will apply to 2,808 livestock processing and slaughtering firms, 38 chicken processors and 4,335 retailers.
In a statement released Thursday, the National Cattlemen’s Beef Association called the USDA’s action “shortsighted.”
“Our largest trading partners have already said that these provisions will not bring the United States into compliance with our WTO obligations and will result in increased discrimination against imported products and, in turn, retaliatory tariffs or other authorized trade sanctions,” Scott George, president of the beef association, said in the statement.
Gary Mickelson, a spokesman for Tyson, said in an email that the company was disappointed that the USDA “chose to ignore the concerns we and hundreds of others have expressed about this rule.”
He referred to a letter the company sent to the agency last month that said the required additional livestock and meat segregation and record-keeping “will increase costs to the industry that must be absorbed by livestock producers, meat processors, retailers and consumers and, further, that will likely lead to retaliation by our trading partners.”
The letter urged the agency to withdraw or delay implementation of the new rule “until a more meaningful and realistic examination of the costs is completed by the USDA or until the WTO has made a final ruling on the legitimacy of this rule, which we and others believe is inconsistent with the United States’ WTO obligations.”
Business, Pages 29 on 05/25/2013