Country-of-Origin Labeling for Foods

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Many retail food stores are now required to inform consumers about the country of origin of fresh
fruits and vegetables, seafood, peanuts, pecans, macadamia nuts, ginseng, and ground and muscle
cuts of beef, pork, lamb, chicken, and goat. The rules are required by the 2002 farm bill (P.L. 107-

171) as amended by the 2008 farm bill (P.L. 110-246). During late 2008 and early 2009, the U.S.

Department of Agriculture (USDA) said it was attempting to educate retailers and suppliers about
the new law’s requirements; more rigorous enforcement is expected to be under way by April ^th
2009. However, controversy over the law could continue during the 111 Congress. Some
agricultural and food industry groups and foreign importers oppose COOL as costly and
unnecessary, although others, including some cattle and consumer groups, maintain that
Americans want and deserve to know the origin of their foods.

Backgr ound ..................................................................................................................................... 1
Other Laws with Labeling Provisions.............................................................................................2
Tariff Act...................................................................................................................................2
Meat and Poultry Products Inspection Acts..............................................................................2
Federal Food, Drug, and Cosmetic Act (FFDCA)....................................................................3
Farm Bill COOL Requirements.......................................................................................................3
Defining Origin.........................................................................................................................4
Cove rage ....................................................................................................................... ............ 5
Record-Keeping, Verification, and Penalties............................................................................6
Economic and Trade Issues.............................................................................................................6
Costs and Benefits.....................................................................................................................6
North American Livestock Trade..............................................................................................7
WTO Developments..................................................................................................................8
Livestock Imports......................................................................................................................8
Selected Legislation........................................................................................................................9
Author Contact Information..........................................................................................................10

Since the 1930s, U.S. tariff law has required almost all imports to carry labels so that the
“ultimate purchaser,” usually the retail consumer, can determine their country of origin. However,
certain products, including a number of agricultural commodities in their “natural” state such as
meats, fruits and vegetables, were excluded. For almost as many decades, various farm and
consumer groups have pressed Congress to end one or more of these exceptions, arguing that U.S.
consumers have a right to know where all of their food comes from and that, given a choice, they
would purchase the domestic version. This would strengthen demand and prices for U.S. farmers
and ranchers, it was argued.
Opponents of ending these exceptions to country-of-origin labeling (COOL) contended that there
was little or no real evidence that consumers want such information and that industry compliance
costs would far outweigh any potential benefits to producers or consumers. Such opponents,
including other farm and food marketing groups, argued that mandatory COOL for meats,
produce, or other agricultural commodities was a form of protectionism that would undermine
U.S. efforts to reduce foreign barriers to trade in the global economy. COOL supporters countered
that it was unfair to exempt agricultural commodities from the labeling requirements that U.S.
importers of almost all other products already must meet, and that major U.S. trading partners
impose their own COOL requirements for imported meats, produce, and other foods.
With passage of the 2002 farm bill (P.L. 107-171, § 10816), retail-level COOL became mandatory
for fresh fruits and vegetables, beef, pork, lamb, seafood, and peanuts, starting September 30,
2004. Continuing controversy over the new requirements within the food and agricultural
industry itself led Congress to postpone full implementation. The FY2004 omnibus
appropriations act (P.L. 108-199) postponed COOL—except for seafood—until September 30,

2006; the FY2006 agriculture appropriation (P.L. 109-97) further postponed it until September ¹

30, 2008.

During deliberations on a new omnibus farm bill in 2007 and 2008, those affected by COOL
reached consensus on a series of amendments intended to ease what many of them viewed as
some of the more onerous provisions of the 2002 COOL law. Modified were such provisions as
the recordkeeping requirements, considerations for labeling U.S. and non-U.S. origin products,
and penalties for noncompliance. These amendments were incorporated into the final farm bill
(P.L. 110-246, § 11002). The enacted 2008 bill also maintained the September 30, 2008,
implementation date and added goat meat, chicken, macadamia nuts, pecans, and ginseng as
commodities covered by mandatory COOL.

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Under §304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), every imported item must be
conspicuously and indelibly marked in English to indicate to the “ultimate purchaser” its country
of origin. The U.S. Customs Service generally defines the “ultimate purchaser” as the last U.S.
person to receive the article in the form in which it was imported. So, articles arriving at the U.S.
border in retail-ready packages—including food products, such as a can of Danish ham, or a
bottle of Italian olive oil—must carry such a mark. However, if the article is destined for a U.S.
processor where it will undergo “substantial transformation,” the processor is considered the
ultimate purchaser. Over the years, numerous technical rulings by Customs have determined what
is, or is not, considered “substantial transformation,” depending upon the item in question.
The law has authorized exceptions to labeling requirements, including articles on a so-called “J
List,” named for §1304(a)(3)(J) of the statute, which empowered the Secretary of the Treasury to
exempt classes of items that were “imported in substantial quantities during the five-year period
immediately preceding January 1, 1937, and were not required during such period to be marked
to indicate their origin.” Among the items placed on the J List were specified agricultural
products including “natural products, such as vegetables, fruits, nuts, berries, and live or dead
animals, fish and birds; all the foregoing which are in their natural state or not advanced in any
manner further than is necessary for their safe transportation.” (See 19 C.F.R. 134.33.) Although J
List items themselves have been exempt from the labeling requirements, § 304 of the 1930 Act
has required that their “immediate container”(essentially, the box they came in) have country-of-
origin labels. For example, when Mexican tomatoes or Chilean grapes are sold loosely from a
store bin, country labeling has not been required by the Tariff Act.
USDA’s Food Safety and Inspection Service (FSIS) is required to ensure the safety and proper
labeling of most meat and poultry products, including imports, under the Federal Meat Inspection
Act, as amended (21 U.S.C. 601 et seq.), and the Poultry Products Inspection Act, as amended (21
U.S.C. 451 et seq.). Regulations issued under these laws have required that country of origin
appear in English on immediate containers of all meat and poultry products entering the United
States (9 C.F.R. 327.14 and 9 C.F.R. 381.205). Only plants in countries certified by USDA to
have inspection systems equivalent to those of the United States are eligible to export products to
the United States.
All individual, retail-ready packages of imported meat products (for example, canned hams or
packages of salami) have had to carry such labeling. Imported bulk products, such as carcasses,
carcass parts, or large containers of meat or poultry destined for U.S. plants for further
processing, also have had to bear country-of-origin marks. However, once these non-retail items
have entered the country, the federal meat inspection law has deemed them to be domestic
products. When they are further processed in a domestic, FSIS-inspected meat or poultry
establishment—which has been considered the ultimate purchaser for purposes of country-of-
origin labeling—FSIS no longer requires such labeling on either the new product or its container.
FSIS has considered even minimal processing, such as cutting a larger piece of meat into smaller

pieces or grinding it for hamburger, enough of a transformation so that country markings are no
longer necessary.
Meat and poultry product imports must comply not only with the meat and poultry inspection
laws and rules but also with Tariff Act labeling regulations. Because Customs generally requires
that imports undergo more extensive changes (i.e., “substantial transformation”) than required by
USDA to avoid the need for labeling, a potential for conflict has existed between the two
requirements.
Foods other than meat and poultry are regulated by the U.S. Department of Health and Human
Services’ Food and Drug Administration (FDA), primarily under the FFDCA (21 U.S.C. 301et
seq.). This act does not expressly require COOL for foods. Section 403(e) of the FFDCA does
regard a packaged food to be misbranded if it lacks a label containing the name and place of
business of the manufacturer, packer, or distributor (among other ways a food can be
misbranded). However, this name and place of business is not an indicator of the origin of the
product itself.

The COOL provisions of the 2002 and 2008 farm bills do not change the requirements of the
Tariff Act or the food safety inspection statutes; rather, they amend the Agricultural Marketing
Act (AMA) of 1946 (7 U.S.C. 1621 note). USDA’s Agricultural Marketing Service (AMS) ²
administers most AMA-authorized programs, including COOL. AMS published a final rule to
implement COOL for all covered commodities on January 15, 2009, to take effect March 16, ³

2009. This final rule replaces both the April 4, 2005, interim final rule for seafood (see footnote ⁴

1), and the August 1, 2008, interim final rule for all other covered commodities.

On December 22, 2008, USDA notified congressional appropriators of its intention to transfer in
FY2009 $3.18 million from the $49 million Specialty Crops Block Grant Program (authorized the
by 2008 farm bill) for implementation of COOL. The transferred funds are to be used for a
retailer survey, the hiring of 10 temporary employees for program administration, training for
state employees who will conduct field reviews and audits during the second half of the fiscal
year, and outreach and education activities. AMS stated that it has cooperative agreements with

42 states to assist with retail surveillance reviews, which are to begin by April 2009, and that it ⁵

would begin audits of retail suppliers in July 2009.

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Among the major COOL provisions:
• Covered commodities are ground and muscle cuts of beef, lamb, and pork, farm-
raised and wild fish and shellfish, peanuts, “perishable agricultural commodities”
as defined by the Perishable Agricultural Commodities Act (PACA, i.e., fresh and
fresh frozen fruits and vegetables), goat meat, chicken, pecans, macadamia nuts,
and ginseng.
• These items are exempt if they are an ingredient in a processed food.
• Only PACA-regulated retailers (those purchasing at least $230,000 a year in fresh
fruits and vegetables) are covered, and must inform consumers of origin “by
means of a label, stamp, mark, placard, or other clear and visible sign on the
covered commodity or on the package, display, holding unit, or bin containing
the commodity at the final point of sale.”
• Exempt are “food service establishments” such as restaurants, cafeterias, bars,
and similar facilities that prepare and sell foods to the public.
In designating country of origin, difficulties arise when products—particularly meats—are
produced in multiple countries. For example, beef might have been from an animal that was born
and fed in Canada, but slaughtered and processed in the United States. Likewise, products from
several different countries often are mixed, such as for ground beef. For covered red meats and
chicken, the COOL law:
• permits the U.S. origin label to be used only on items from animals that were
exclusively born, raised, and slaughtered in the United States, with an exception
for those animals present here before July 15, 2008;
• permits meats or chicken with multiple countries of origin to be labeled as being
from all of the countries in which the animals may have been born, raised, or
slaughtered;
• requires meat or chicken from animals imported for immediate U.S. slaughter to
be labeled as from both the country the animal came from and the United States;
• requires products from animals not born, raised, or slaughtered in the United
States to be labeled with their correct country(ies) of origin; and
• requires, for ground meat and chicken products, that the label list all countries of
origin, or all “reasonably possible” countries of origin.
Many retailers and meat processors reportedly had planned to use the “catch-all” label (second
bullet, above) on as much meat as possible—even products that would qualify for the U.S.-only
label, because it is both permitted and the easiest requirement to meet. COOL supporters raised
concerns that the label would be overused, undermining the whole intent of COOL (i.e., to ⁶
distinguish between U.S. and non-U.S. meats). In an effort to balance the concerns of both sides,
USDA attempted to clarify its August 2008 interim rule to state that meats derived from both U.S.

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and non-U.S. origin animals may carry a mixed origin claim (e.g., “Product of U.S., Canada, and
Mexico”), but that the mixed origin label cannot be used if only U.S. origin meat was produced ⁷
on a production day.
The final (January 2009) rule attempts to further clarify the “multiple countries of origin”
language. For example, muscle cut products of exclusively U.S. origin along with those from
foreign-born animals, if commingled on a single production day, can continue to qualify for a
combined U.S. and non-U.S. label. “It was never the intent of the Agency [AMS] for the majority
of product eligible to bear a U.S. origin declaration to bear a multiple origin destination. The
Agency made additional modifications for clarity,” AMS stated in material accompanying the ⁸
rule. Nonetheless, some producer groups reportedly continue to view this portion of the rule as a
“loophole that would allow meat packers to use a multiple countries, or NAFTA [North American
Free Trade Agreement], label, rather than labeling U.S. products as products of the United States. ⁹
This is misleading to consumers,” stated National Farmers Union (NFU) President Tom Buis.
For perishable agricultural commodities, ginseng, peanuts, pecans, and macadamia nuts, retailers
may only claim U.S. origin if they were exclusively produced in the United States. However, a
U.S. state, region, or locality designation is a sufficient U.S. identifier (e.g., Idaho potatoes). For
farm-raised fish and shellfish, a U.S.-labeled product must be derived exclusively from fish or
shellfish hatched, raised, harvested, and processed in the United States; wild fish and shellfish
must be derived exclusively from those either harvested in U.S. waters or by a U.S. flagged
vessel, and processed in the United States or on a U.S. vessel. Also, labels must differentiate
between wild and farm-raised seafood.
Consumers may not find country labels on much more of the food they buy, due to COOL’s
statutory and regulatory exemptions. First, as noted, all restaurants and other food service
providers are exempt, as are all retail grocery stores that buy less than $230,000 a year in fresh
fruits and vegetables. Second, “processed food items” derived from the covered commodities are
exempt, and USDA, in its final rule, has defined this term broadly (at 7 C.F.R. 65.220).
Essentially, any time a covered commodity is subjected to a change that alters its basic character,
it is considered to be processed. Although adding salt, water, or sugar do not, under USDA’s
definition, change the basic character, virtually any sort of cooking, curing, or mixing apparently
does. For example, roasting a peanut or pecan, mixing peas with carrots, or breading a piece of
meat or chicken, all count as processing. As a result, only about 30% of the U.S. beef supply, 11%
of all pork, 39% of chicken, and 40% of all fruit and vegetable supplies may be covered by ¹⁰
COOL requirements at the retail level. Whole peanuts are almost always purchased in roasted
form, which will not have to be labeled. Some critics are arguing that AMS overstepped its
authority, and congressional intent, by excepting such minimally processed commodities.

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AMS has countered that in fact many imported items still must carry COOL under provisions of
the Tariff Act of 1930. “For example, while a bag of frozen peas and carrots is considered a
processed food item under the COOL final rule, if the peas and carrots are of foreign origin, the
Tariff Act requires that the country of origin be marked on the bag,” AMS argued, citing similar ¹¹
regulatory situations for roasted nuts and for a variety of seafood items.
The law prohibits USDA from using a mandatory animal identification (ID) system, but the
original 2002 version stated that the Secretary “may require that any person that prepares, stores,
handles, or distributes a covered commodity for retail sale maintain a verifiable record-keeping
audit trail that will permit the Secretary to verify compliance.” Verification immediately became
one of the most contentious issues, particularly for livestock producers, in part because of the
potential complications and costs to affected industries of tracking animals and their products
from birth through retail sale. Producers of the plant-based commodities, as well as food retailers
and others, also expressed concern about the cost and difficulty of maintaining records for
commodities that are highly fungible and often widely sourced. The 2008 law eased these
requirements somewhat by stating that USDA “may conduct an audit of any person that prepares,
stores, handles, or distributes a covered commodity” in order to verify compliance. Such persons
must provide verification, but USDA may not ask for any additional records beyond those
maintained “in the course of the normal conduct of business.”
In its final rule, AMS stated that covered persons generally would have to keep records for one
year that can identify both the immediate previous source and the immediate subsequent recipient
of a covered commodity; certain exceptions are provided for pre-labeled products. A slaughter
facility can accept a producer affidavit as sufficient evidence for animal origin claims.
Also, potential fines for willful noncompliance are set for retailers and other persons at no more
than $1,000 per violation. The 2002 law had set the fine at no more than $10,000 (and for
retailers only), but the amount was lowered by the 2008 farm bill.

COOL supporters argue that a number of studies show that consumers want such labeling and
would pay extra for it. Analysis accompanying USDA’s interim and final rules concluded that,
while benefits are difficult to quantify, it appears they will be small and accrue mainly to
consumers who desire such information. A Colorado State University economist suggested that
consumers might be willing to pay a premium for “COOL meat” from the United States, but only ¹²
if they perceive U.S. meat to be safer and of higher quality than foreign meat. USDA earlier had
estimated that purchases of (demand for) covered commodities would have to increase by

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between 1% and 5% for benefits to cover COOL costs, but added that such increases were not
anticipated. Data from several economic modeling studies of COOL impacts appear to fall within ¹³
this range. Another research paper found that demand for domestic apples would need to
increase by a range of 3% to 7% and for domestic tomatoes by 8% to 22% for COOL to increase ¹⁴
total economic welfare in these markets.
Critics of mandatory COOL have argued that large compliance costs will more than offset any
consumer benefits. USDA’s analysis of its final rule estimates first-year implementation costs to
be approximately $2.6 billion for those affected. Of the total, each commodity producer would
bear an average estimated cost of $370, intermediary firms (such as wholesalers or processors)
$48,219 each, and retailers $254,685 each. The USDA analysis also includes estimates of record-
keeping costs and of food sector economic losses due to the rule.
With implementation now underway, foreign suppliers, notably in Canada and Mexico, have
questioned the trade legality of mandatory COOL. They claimed that publication in August 2008
of the interim rule had already altered normal trade patterns and caused large financial losses. The
initial focus of these concerns was on livestock (i.e., cattle and hogs, and their products).
The animal products industries were becoming increasingly integrated across all three North
American countries in recent years, particularly after the onset in 1994 of the North American
Free Trade Agreement (NAFTA) and, before that, the Canada-U.S. Free Trade Agreement in
1988. These agreements, along with the global Uruguay Round Agreements under the World
Trade Organization (WTO), by helping to reduce tariff and nontariff barriers to trade, have
enabled animals or their products to move across borders more freely, based on market demands.
For example, in the pork industry, the Canadians tended toward breeding and farrowing small
pigs, which in turn were shipped to the United States, where access to large supplies of grain ¹⁵
made it more economical to feed them to slaughter weight.
A number of animal health and other incidents have disrupted this market integration from time to
time. Perhaps the most significant recent event was the discovery of bovine spongiform
encephalopathy (BSE) in 2003, first in Canada and later in the United States, which halted most
southern cross-border movement of cattle and beef. This trade was still recovering in 2007 and
2008. The predominance of BSE (mad cow) cases coming out of Canada rather than the United
States may have contributed to wider support for the mandatory COOL law, some analysts
believe, although government officials assert that both countries now have strong, scientifically
defensible safeguards in place to ensure that BSE is controlled and that its infectious agent does ¹⁶
not enter the human food supply.

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¹⁵^S^{ee f}^o^{r exa}^m^p^l^e,^US^D^A^,^E^c^oⁿ^o^mⁱ^{c R}^e^sear^ch^S^e^rvi^{ce (E}^RS^),^M^a^r^k^e^t^Iⁿ^te^gr^ati^oⁿ^of^the^N^o^r^t^{h Am}^e^r^ic^{an A}ⁿ^im^al
^Pr^oduc^ts^C^o^m^p^le^x⁽^L^D^P^-^M^-¹^31-⁰¹⁾^,^Ma^y²⁰⁰⁵^.
¹⁶^Se^e^C^R^S^R^e^por^{t R}^S²¹⁷⁰^9,^M^a^d^C^o^w^Dⁱ^s^e^as^e^an^{d U}^.^{S. Be}^e^f^Tr^ade^,^b^y^Ch^arl^e^{s E}^.^Han^r^ah^an^and^G^e^o^f^f^r^e^y^S^.^Beck^er.

On December 1, 2008, Canada had filed a request for formal WTO consultations on COOL with
the United States. Normally, if such consultations are unable to resolve an issue, the next step
likely would be referral to a WTO dispute settlement panel. Mexico also had requested WTO
consultations on COOL on December 17, 2008. Both the Canadian and Mexican filings asserted
that COOL is inconsistent with several WTO-related trade commitments, including those
providing that imports must be treated no less favorably than products of domestic origin; that
laws on marks of origin should not damage imports, reduce their value, or unreasonably increase
their cost; and that laws, rules, and procedures on country of origin should not “themselves” ¹⁷
create or disrupt international trade, among other things.
Canada reportedly suspended its WTO challenge following publication of the COOL final rules,
until it can determine whether the rules will in fact allow for more flexibility and ease the
financial impacts on Canadian producers. However, the Canadians appeared to leave the door ¹⁸
open for further action.
The requests for consultations were not specific to livestock and their products, and presumably
other covered commodities could be affected if a challenge were to be pursued. However, the
Canadian beef and pork industries, led by the Canadian Cattlemen’s Association (CCA) and the
Canadian Pork Council, had actively pushed their government to initiate a WTO challenge. CCA
had argued that COOL cost its producers $92 million in losses over the two months following the
interim rule, and could cost $500 million (Canadian dollars) per year. CCA had estimated that
slaughter steers and heifers were losing $90 per head, because U.S. meat establishments do not
want to assume the increased costs of complying with new labeling requirements by segregating,
holding, and then slaughtering Canadian cattle separately from U.S. cattle. The losses included
lower prices for all Canadian cattle due to decreased U.S. demand, as well as the cost of shipping
those that are sold further distances, to a fewer number of U.S. plants willing to take them. ¹⁹
Canadian pork producers expressed similar concerns.
Almost all U.S. live cattle imports come from Canada and Mexico; almost all hog imports come
from Canada. Total cattle imports from the two countries had been increasing annually since
2003, reaching 2.495 million in 2007. They declined to an estimated 2.128 million in 2008, as a
modest annual increase in Canadian cattle was more than offset by a reduction in the number

¹⁷^Unⁱ^t^e^d^S^t^at^es—Cert^aⁱⁿ^Couⁿ^t^ry^o^f^Ori^gⁱⁿ^L^a^b^e^lⁱⁿ^{g Req}^uⁱ^rem^eⁿ^t^s,^Req^u^e^st^f^o^{r Con}^s^u^l^t^a^tⁱ^oⁿ^s^b^y^Caⁿ^a^d^a^,^Decem^b^e^r
⁴^,²⁰⁰⁸^,^aⁿ^d^Re^q^u^e^st^f^o^{r Con}^s^u^l^t^a^tⁱ^oⁿ^s^b^y^M^e^xi^co^,^Dece^m^b^{er 2}²^,²⁰⁰⁸^,^accessed^Jan^u^a^ry⁵^,²⁰⁰⁹^,^at^W^T^{O Do}^cu^men^t^s
^Oⁿ^line^a^t^htt^p^://^doc^s^o^nline^.^w^t^o.^or^g^/^g^e^n_hom^e^.^a^s^p?^la^ng^ua^ge⁼¹^&^_⁼^1#.
¹⁸^Va^rⁱ^o^u^s^tr^a^d^e^pr^e^s^s^r^e^por^ts^,^inc^l^u^d^ing^“^T^he^C^O^O^L^r^u^le^is^out^{, b}^u^t^othe^r^s^s^a^y^m^o^r^e^c^h^aⁿ^g^e^s^r^e^quir^e^d,”^Ag^ri-Pu^l^se^,
^J^a^nua^r^y^{14, 20}⁰⁹^{; a}ⁿ^{d “}^N^e^w^C^O^O^L^s^oothe^s^C^a^na^diaⁿ^liv^e^s^toc^k^pr^oduc^e^r^s^,^f^o^r^now^,”^M^e^ating^p^lac^e^.^c^o^m^{, J}^a^nua^r^y^13,
²⁰⁰^9.
¹⁹^So^ur^c^e^s^{: v}^a^rⁱ^ous^tr^a^d^e^p^u^b^lic^a^tio^{n r}^e^por^ts^{, i}ⁿ^c^l^ud^ing^“^M^C^O^O^L^H^a^s^C^o^s^t^C^a^na^diaⁿ^P^r^od^uc^e^r^s^C^$⁹²^M^,”^Cattle
^B^u^{yers Weekl}^y^,^Dece^m^b^{er 8}^,²⁰⁰⁸^;^“COOL^regu^l^a^tⁱ^oⁿ^s^creat^{e h}^eart^b^u^rⁿ^f^o^{r Can}^a^dⁱ^an^s^,^”^Ag^ri-P^u^l^se^,^Dece^m^b^{er 3}^,
²⁰⁰^{8; a}^nd^W^a^s^hⁱⁿ^gtoⁿ^Tr^ade^D^aⁱ^l^y^{, D}^e^c^e^m^b^e^r^{2, 20}⁰⁸^{. Cha}ⁿ^g^e^s^,^{if a}ⁿ^y^,^{in th}^e^s^e^g^r^ou^{ps’ f}ⁱ^g^u^re^{s to re}^f^l^e^c^{t the}^fⁱ^na^{l rule}
^ha^{d n}^o^t^be^eⁿ^r^e^p^o^r^t^e^d^a^s^of^J^a^nua^r^y^{15, 20}^09.

imported from Mexico. Hog imports also declined, from just over 10 million head in 2007 to just ²⁰
over 9 million in 2008.
A closer look at the USDA data indicates that imports of Canadian feeder cattle for the July 14
through December 27, 2008, period, at nearly 188,000 head, were 38% lower than the during the
same period in 2007. Imports of Canadian slaughter cattle (steers and heifers), at nearly 263,000
head, were 35% lower. Imports of Mexican feeder cattle from July 14 through December 20, ²¹

2008, were more than 323,000 head, 39% lower than prior-year levels for the period. CattleFax,

an industry-funded data and analysis service based in Colorado, concluded that 2008 declines in
imports of both feeder cattle (those destined for feedlots) and fed (slaughter-ready) cattle were
due to mandatory COOL regulations, and that imports “face a big wild card in 2009” for the same
reason.
Meyer and Steiner wrote that reductions in imports from both Mexico and Canada “came at a
time when a significant devaluation in the value of the Peso and Canadian dollar normally would
have been conducive of increased imports from these two countries. Under normal circumstances, ²²
one would expect cattle imports to actually increase rather than be cut by almost 40%.” USDA’s
Economic Research Service (ERS), in its December 2008 livestock market analysis, appears to
suggest that the currency exchange situation may be somewhat more involved. The decline in
Canadian cattle imports:
^coⁱⁿ^cid^e^d^wⁱ^th^t^h^{e r}^a^pⁱ^d^d^e^p^r^eciatioⁿ^o^f^t^h^e^Can^a^dⁱ^aⁿ^d^o^llar^,^m^a^kⁱⁿ^g^Can^a^dⁱ^aⁿ^cattle
^r^e^lativ^el^y^c^h^eap^erⁱⁿ^{U.S. d}^o^llar^ter^m^{s, b}^u^{t also}^m^a^kⁱⁿ^g^Caⁿ^a^dⁱ^an^b^eef^m^o^r^e^co^m^p^etiti^v^e^oⁿ
^th^{e e}^x^port^m^a^r^k^et.^{Feeder cat}^{tle h}^a^v^e^been^re^m^aⁱⁿ^{ing in Can}^a^{da.... I}^m^ports^{of s}^l^a^u^g^h^t^er
^s^t^eers^an^d^h^eⁱ^f^ers^f^r^o^m^C^aⁿ^a^{da als}^o^declin^{ed dra}^m^aticall^yⁱⁿ^Septe^m^{ber, driv}^en^b^y^t^h^{e s}^a^m^e
^ex^ch^aⁿ^g^e^r^a^{te co}ⁿ^d^itioⁿ^s^a^f^f^e^c^tin^g^f^eed^er^cattle.^A^d^d^itioⁿ^a^ll^y^,^th^{e p}^a^{st i}ⁿ^cr^{ease i}ⁿ^Can^a^dⁱ^aⁿ
^ex^p^o^r^{ts o}^f^f^eed^er^cattle^w^o^u^l^d^r^e^d^u^{ce th}^{e cu}^r^r^en^{t s}^u^p^p^l^y^o^f^f^e^d^{cattle in}^Caⁿ^a^d^a^to^b^e
^m^a^rk^et^{ed or ex}^port^e^{d, l}^o^w^e^ri^ng^t^h^{e num}^{ber o}^f^C^aⁿ^a^di^aⁿ^cat^t^l^{e s}^eⁿ^t^t^o^t^h^{e U}ⁿⁱ^t^e^{d St}^at^es^f^o^r²³
^s^l^augh^t^e^r.

A number of lawmakers appear to agree with some industry groups’ criticisms of mandatory
COOL and conceivably could offer legislation to limit its scope and impacts. Other lawmakers
remain strongly supportive of the new law and likely would oppose any significant changes.
Observers point out that the 2008 farm bill was intended to balance the concerns of both sides.
However, unfolding trade and market developments, including the potential for a WTO challenge ^th
and changes in import patterns, could alter the dynamics of any COOL debate in the 111
Congress.

²⁰^So^u^r^{ce: USDA}^,^A^g^ricu^ltu^{ral Mark}^etin^g^Serv^{ice, v}^a^rio^u^s^Ma^r^k^e^t^Ne^w^s^r^e^por^ts^{; a}^l^s^o^U^S^D^A^{, ER}^{S, L}ⁱ^v^e^s^t^oc^k^a^nd
^M^eat^T^r^ad^{e Dat}^a^seri^e^s^.
²¹^S^o^u^r^ce:^M^e^y^e^r,^S^t^eve,^an^d^L^eⁿ^S^t^eiⁿ^e^r,^“M^arket^Co^mmen^t^s,^”^CME^Daⁱ^l^y^Lⁱ^vest^o^{ck R}^e^po^rt^{, C}^o^m^m^o^d^ity^Me^rc^aⁿ^tile
^Ex^c^h^aⁿ^g^e^{, J}^a^nua^r^y^{7, 200}^9.
²²^Me^y^e^r^a^{nd Ste}ⁱ^ne^r^,^CME^Daⁱ^l^y^Lⁱ^vest^o^{ck R}^e^p^o^r^t^.
²³^US^DA^,^ERS^.^Lⁱ^vest^o^ck,^Daⁱ^r^y,^an^d^P^o^ul^t^r^{y Ou}^t^l^o^o^k^{, L}^D^P^-^M-¹⁷^4,^D^e^c^e^m^b^e^r^{18, 2}⁰⁰⁸^.^ER^{S a}ⁿ^a^l^y^s^ts^poi^nt^out^tha^t
^prior^to²⁰⁰⁸^{, the}^Uⁿ^ite^d^Sta^t^e^s^w^a^s^e^a^s^ing^the^BSE-re^la^te^{d re}^s^t^ric^tⁱ^ons^{on Ca}^na^diaⁿ^c^a^ttle^im^ports^;ⁱⁿ^N^o^v^e^m^b^e^r²⁰⁰⁷^,
^c^a^ttle^ov^e^r^{30 m}^onths^of^a^g^e^w^e^re^a^g^aⁱ^{n pe}^rm^itte^{d to e}ⁿ^te^{r f}^r^om^Ca^na^da^.

During the 2008 debate over the safety of imported foods generally, some suggested that COOL
be extended to additional products—a proposal that was in an FDA reform bill (the Food and
Drug Globalization Act of 2008) drafted by Representative Dingell, then chairman of the House
Ways and Means Committee. As noted, the FFDCA does not contain express COOL requirements
for foods (or drugs). The Dingell bill, which was not introduced formally but was widely
circulated, would have added new language to provide that a “processed food” will be considered
misbranded if “(1) the labeling of the food fails to identify the country in which the final
processing of the food occurs; and (2) the website for the manufacturer of the food fails to
identify the country (or countries) of origin for each ingredient in the food.” Similar requirements
would have applied to nonprocessed foods as well. A separate Senate bill (S. 3653) introduced ^th
late in the 110 Congress would have extended mandatory COOL to fluid milk, cheeses, yogurt,
ice cream, butter, and any other dairy product.
^Geof^f^r^e^y^{S. B}^eck^er
^Sp^{ecialist i}ⁿ^A^g^rⁱ^c^u^lt^u^r^{al P}^o^lic^y
^g^b^eck^er@^c^r^s^.l^oc.g^ov^{, 7-}⁷²⁸⁷