United States-Country of Origin labelling.

UNITED STATES-

Agriculture Secretary Tom Vilsack’s proposal for unofficial changes to country-of-origin labels on meat sold in U.S. stores may re-ignite a cattle trade dispute with Canada, two farm lobbyists said on Wednesday.

President Barack Obama was scheduled to meet Canadian Prime Minister Stephen Harper on Thursday in Ottawa on his first foreign trip since taking office last month. The discussions were expected to include the global recession, trade and energy.

Vilsack asked meatpackers during a meeting on Tuesday to voluntarily put more details on meat labels. The Agriculture Department delayed a public unveiling of the plan on Wednesday but a spokesman said Vilsack was going ahead with the idea.

"The damage is done," a U.S. farm lobbyist said, because USDA increased frictions just before the U.S.-Canada meeting.. Said another farm lobbyist: "The whole thing blew up in their faces." The lobbyists spoke on condition of anonymity.

A final set of U.S. rules for country-of-origin labeling is due to take effect on March 16. Vilsack said he would re-open the rule-making process, if packers did not agree to the unofficial changes that he suggested.

They are specifically listing the origin of cuts of meat, putting country-of-origin labels on a larger volume of processed meats and allowing less leeway on listing the origin of ground meat.

Some U.S. consumer and farm groups say the labeling rule proposed on January 15 by the outgoing Bush administration was too lax and exempted too many products.

Canada shelved a World Trade complaint last month in the belief that U.S. rules would give packers more flexibility in handling livestock. It had charged the U.S. labeling law was a trade barrier that depressed prices for Canadian livestock.

Some 1.6 million head of Canadian cattle and 9.3 million head of Canadian hogs were shipped to U.S. buyers in 2008. About 35 million head of cattle and calves are slaughtered each year in U.S. plants and 109 million head of hogs.

Canadian Agriculture Minister Gerry Ritz said on Tuesday Canada would revive its WTO challenge, if protectionist U.S. rules are put in place.

USDA spokesman Jim Brownlee said the agency was drafting a letter to packers to spell out the changes it sought. Packers were reluctant to comment on Vilsack’s plan before seeing the letter.

Colin Woodall of the National Cattlemen’s Beef Association said the effectiveness of country-of-origin labeling cannot be judged until rules are concrete.

"All we’re asking is this January 15 rule be put in place," said Woodall.

The labeling law applies to packages of beef, chicken, lamb, pork and goat meat sold in grocery stores as well as nuts, seafood and fruits and vegetables.

(Additional reporting by Christopher Doering; Editing by Walter Bagley)

reuters.com

Does Obama Want Trade War After All?

Vilsack Warns Obama May Give Bad News to Canada - Our #2 Beef Customer

Steve Dittmer, Executive Vice President

Agribusiness Freedom Foundation, Colorado Springs, CO

Feb. 18, 2009

To Turn mCOOL, Into COOL, COR & COS (Country of Origin, Country of Raising and Country of Slaughter)?

Saying the U.S. would not be a "good friend" if President Obama avoided giving bad news to Canadian officials Thursday and then imposed more restrictive meat labeling rules after he left town, U.S. Agriculture Secretary Tom Vilsack began warning packers Tuesday, according to CongressDaily.

But in a confusing setup, Vilsack said the final decision about "trade implications of the labeling program would be made by Obama himself," according to Jerry Hagstrom of CongressDaily. Then Vilsack turned right around and outlined steps he was already taking to change mCOOL regulations yet again, thrusting more changes and costs on a struggling meat industry.

In news perfectly designed to further anger America’s #1 (Mexico) & #2 (Canada) beef customers and our #1 (Canada) & #3 (Mexico) oil supplying trading partners, Vilsack said he would require much stricter mCOOL provisions and get agreement from packers. If packers didn’t agree, he threatened a new rulemaking process.

In a letter he said would go out to packers Wednesday, Vilsack was set to ask the meat industry to label each meat package with the country in which the animal was born, the country in which it was raised and the country in which it was slaughtered, CongressDaily said. He would also ask packers to cut the inventory window of sourcing countries for ground meat products from 60 days to just 10 days.

This is horrible news to a meat production chain already hammered by huge fuel and feed cost increases, the increases in costs already associated with mCOOL, mCOOL trade and animal supply disruptions and slackening world demand.. The packers must wonder if the Obama administration wants to see them in straits like Detroit automakers. The livestock industry desperately needs export markets to reduce losses, not a trade war to cost producers money.

It appears that Secretary Vilsack is listening to activist ag and consumer groups who want more government interference in agriculture. He certainly can’t be listening to consumers, whose buying behavior has definitively shifted to cope with reduced incomes and lost jobs. Retailers, packers and foodservice operators are reporting customers more often buying less expensive cuts and hamburger and less often selecting higher-priced "middle meats." Piling more segregation, tracking and labeling costs on packers will further threaten some plants’ ability to stay open and further damage entire packing companies’ bottom lines. Higher costs for retailers and upward pressure on prices further erode purchasing power for consumers already economizing to feed families.

Imposing stricter labeling - and thus segregation and tracking costs - on packers in the northern half of the U.S. who depend on both U.S. and Canadian livestock for volume to operate profitably threatens their viability, as well as the feedlots, auction markets and ranchers down the chain on both sides of the border. That could mean tougher times for cattlemen outside the High Plains who depend on smaller packers or large packers’ smaller plants to make a market for the feedyards their calves end up in.

Mexican cattlemen are upset because they sell feeder cattle to U.S. feedyards who have sold them for years to U.S. packers. Much of the meat then goes back to Mexico, to U.S. retailers and foodservice or the retailers serving the American Hispanic population. But mCOOL costs have already significantly depressed prices for Mexican calves.

Because hogs thrive on corn rather than Canada’s available small grains, Canadian farmers have raised millions of feeder pigs and sold them to hog finishing operations in the U.S., where corn was plentiful. Those finishers and the packing plants, all the way back to feeder pig operations on both sides of the border dependent on those packers, have been significantly impacted by mCOOL. Canadians are reluctant to talk about the fate of thousands of baby pigs with suddenly nowhere to go and the farmers who raised them.

Long term, mCOOL regulations interpreted in the strict and even overreaching vein the Obama administration is outlining, will further diminish a Canadian beef industry already struggling because of BSE issues plus all the factors American cattlemen are struggling with. A smaller Canadian beef industry would mean fewer slaughter cows that have helped satisfy American ground beef demand, which long ago outstripped domestic supplies. That means rather than getting ground beef from neighboring Canadian sour