INDUSTRY CONSENSUS BUILDING FOR VOLUNTARY BEEF LABELING

ROBERT VOSBURGH

WASHINGTON -- Support is growing throughout the food industry for a voluntary "Made in the USA" beef labeling program, rather than the mandatory country-of-origin legislation currently under review by Congress.

Both measures would have some impact on food retailers, since they would change the way a meat product is presented to the consumer -- and therefore, the manner in which processors and retailers market the item.

Testifying before the House Agriculture Subcommittee on Livestock and Horticulture, Tim Hammonds, president and chief executive officer of the Food Marketing Institute, said the voluntary program would be less costly and not as damaging to U.S. trade policy as the country-of-origin proposal, which would require imported beef products to be labeled with the name of the processing country or countries.

"This [domestic] cooperative labeling and certification program is clearly a far better approach than mandating country-of-origin labels on imports," Hammonds stated, adding the latter approach would also raise false safety and quality concerns.

In separate testimony, an official with the U.S. Department of Agriculture stated the agency also sees no overt consumer benefit to mandatory labeling, and considers country-of-origin labeling to be a marketing issue -- not a food-safety issue.

"Indeed, if consumers do distinguish goods depending on their country of origin, strong incentives exist for industries to act without government intervention on a voluntary basis," said Caren Wilcox, USDA's deputy undersecretary for food safety. She added existing guidelines written for domestic producers have not been extensively used to date.

"[This] infrequent use of voluntary labeling by our domestic establishments may reflect the unwillingness of consumers to pay a price premium for domestically labeled products, or it could be that the benefits may be less than the costs the domestic industry would incur in changing to a country-of-origin labeling system," said Wilcox. "In either case, both producers and consumers could be worse off."

A number of trade associations, including FMI, the American Farm Bureau Federation, American Meat Institute, National Cattlemen's Beef Association and National Meat Association, have been meeting to hammer out a unified, mutually beneficial voluntary labeling policy. Hammonds said an agreement was recently reached and has already received initial approval from major retailers.

"It was a long but fruitful process that produced a huge step forward for the entire food industry -- from the rancher and packer to the grocer and food-service distributor," he said.

Under the "Made in the USA" proposal, beef producers and processors who want to sell their products so labeled would have to abide by a written certification program administered by the USDA. It would require cattle feeders and beef packers to maintain adequate systems and records, and to make consistent and accurate labels. Packers and cattle producers would be required to reimburse the USDA for the cost of the certification program.

The proposed label would read as follows: "Beef: Made in the USA. This beef is processed from cattle raised and fed for at least 100 days in the United States."

According to FMI's own research, mandatory country-of-origin labeling for beef, pork and lamb would cost the industry and consumers $1.38 billion per year. It could also trigger trading partners that view labeling as a non-tariff barrier to retaliate by restricting imports of U.S. products. USDA, the Government Accounting Office and others have raised cost and trade concerns in reports on the impact of country-of-origin labeling, Hammonds pointed out in earlier testimony on the subject.

The USDA estimated it would cost $8 million just to label imported and domestic muscle cuts for sale in supermarkets -- a projection that does not include costs associated with ground product like hamburger or sausage.