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Cattle producers watching for change in labeling rule

BUFFALO —Wyoming cattle producers are watching a new rule proposed by the U.S. Department of Agriculture earlier this month, saying the change could provide more transparency for consumers and additional confidence in U.S. meat. The proposal would effectively close a labeling “loophole” that allows products to use “Product of USA” for beef and pork that is simply repackaged in the U.S.

The rule would allow the voluntary “Product of USA” or “Made in the USA” labels only on meat and poultry products derived from animals born, raised, slaughtered and processed in the United States.

Current regulations allow any beef and pork product that's repackaged in the U.S. to be labeled a product of the U.S., despite where that animal was raised.

For example, if a cow born and raised in Brazil is processed into ground beef in the U.S., it's eligible for a “Made in the USA” label.

“American consumers expect that when they buy a meat product at the grocery store, the claims they see on the label mean what they say,” said U.S. Secretary of Agriculture Tom Vilsack in a release announcing the proposed rule.

Jim Magagna, executive vice president of the Wyoming Stockgrowers Association, said the move is a good first step.

“Our organization has always favored voluntary country of origin labeling,” he said. “I think this is a step in the right direction. Currently, a label that says 'Product of the USA' is very deceptive from our perspective; it could be entirely produced in another country, and only processed in the U.S.”

It's not just cattle producers' groups that find the practice misleading.

A nationwide consumer study by the USDA found that the current “Product of USA” labeling claim is misleading to a majority of consumers surveyed, with a significant portion believing the claim means that the product was made from animals born, raised, slaughtered and processed in the United States.

The move to a voluntary label is the latest in a long and winding history that stretches back more than two decades.

Following fears of mad cow disease from imported meat, in 2002 Congress passed a country of origin labeling requirement for meat, and the law went into effect in 2009. Under COOL, labels told consumers a cut of meat was “born in Canada, raised and slaughtered in the United States,” for example.

But the U.S. repealed COOL in 2016 after Canada and Mexico threatened over $1 billion in retaliatory tariffs, claiming the rule unfairly discriminated against their beef and pork products.

Since then, industry trade groups, the USDA, Congress and the Wyoming Legislature have pitched various efforts to ensure that meat produced from animals born, raised and slaughtered in the United States is distinguished in the marketplace.

In both 2017 and 2018, the Wyoming House Agriculture Committee passed the “Country of origin recognition — USA Beef” bill, which would have required retailers to designate beef as “USA beef” or imported. The bill was never considered by the House in either session.

Most recently, in January, U.S. Sen. Cynthia Lummis, R-Wyoming, joined U.S.

Sens. John Thune, R-South Dakota; Jon Tester, D-Montana; Mike Rounds, R-South Dakota; Cory Booker, D-New Jersey; and Kirsten Gillibrand, R-New York, in reintroducing the American Beef Labeling Act, which would reinstate mandatory country of origin labeling for beef.

But mandatory labeling has plenty of detractors — including livestock associations — who fear retaliatory measures at a time when the beef industry, in particular, cannot afford to lose foreign markets. That's because the growth in the beef industry is coming from a burgeoning export market, Magagna said, with a record 15.2% of U.S. beef exported in 2022, according to the USDA.

“Our industry has become so dependent on exports. For 2022, the export market in general added $447 to the end value of every head of cattle,” Magagna said. “We don't think mandatory country of origin labeling is the answer, and, frankly, we're fearful of what the implications could be. We're fearful of trade retaliation from other countries that are prime areas of focus for our export market. It could allow countries to put huge tariffs on American beef, and we're competing with other major beef- exporting countries, including Australia, Brazil and England.”

At a time when American consumption of beef has been in decline, industry groups say the voluntary labels could boost consumer confidence and help bolster the market.

In advance of its rule proposal, the USDA undertook a nationwide survey in November to better understand customer behavior and the value of “Product of USA” labeling claims.

The data showed American consumers are willing to pay a premium for meat products bearing the “Product of USA” claim versus products without this claim.

The survey found that customers were willing to pay an average of $1.69 more per pound for ground beef bearing the “Product of USA,” $3.21 more per pound of New York strip steak and $1.71 for 1 pound of pork tenderloin. Consumers were willing to pay the greatest price premium for meat products where all production steps (born, raised, slaughtered and processed) took place in the United States.

But there is a significant knowledge gap that has to be overcome, because consumers do not have a good understanding of what the “Product of USA” label means.

In the survey, only 16% of consumers were able to correctly identify the definition of what the label means. That consumers are willing to pay the most for products born, raised, slaughtered and processed in the United States, but that they don't know how to identify those products is a concern, Magagna said.

"I'm not satisfied that it provides the final answer, but our organization is pleased that USDA is moving in that direction, but I really don't think it goes far enough,” he said.

"The next step is a label, not that's mandated, but that clearly conveys the animal was born, raised an

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