Food Label Law Brings Disorder

US - Starting next year, country-of-origin markings could burden producers and retailers with significant record-keeping costs, though the intent of Congress is promoting American products, reported the St. Louis Post-Dispatch.
calendar icon 4 June 2003
clock icon 7 minute read
Food Label Law Brings Disorder - US - Starting next year, country-of-origin markings could burden producers and retailers with significant record-keeping costs, though the intent of Congress is promoting American products, reported the St. Louis Post-Dispatch.
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This year, National Pork Producers Council (NPPC) Board Member Rick Rehmeier expects to ship 22,000 hogs to slaughter from his family farm on rolling hills four miles northwest of Augusta.

This time next year, he expects to ship about the same number, but a new federal law will make the burden considerably greater, he said.

Obeying the law, which will require country-of-origin labeling by Sept. 30, 2004, for many agricultural products sold at retail, means, for Rehmeier, that he must start keeping records and tracking all the pigs he raises for slaughter at 260 to 270 pounds. That could boost his operating costs by $10.22 a head, according to one estimate. That's an additional $224,840 in overhead a year he must cover to stay in business.

"I don't think the system's broke," said Rehmeier, a fifth-generation family farmer in St. Charles County who questions the way Congress wrote the law.

When it passed the Farm Act last year, Congress decided to make mandatory what had been a voluntary system for labeling fresh and frozen pork, beef and lamb as well as perishable fruits, vegetables, fish, shellfish and peanuts.

The basic idea, observers said, was to entice U.S. consumers to "Buy American." A floor amendment in the Senate, added without hearings, was adopted and survived through the conference report adopted by Congress.

"A lot of people early on, without a lot of research, without a lot of testing, bought the idea," said Ron Plain, professor of agricultural economics at the University of Missouri at Columbia.

The result, however, is chaos in this country's elaborate food-supply chain, they say, and an unknown additional cost to food producers, processors and retailers that will be passed on to consumers.

For example, Dermot J. Hayes and Steven R. Meyer, two analysts hired by NPPC, contend that putting the country-of-origin law into effect could add $10.22 to the cost of producing each hog for slaughter.

That cost is attributed to the record keeping, computer programs and time required to track each animal from its birth until it's killed.

And because many hog producers buy feeder pigs in Canada and fatten them for slaughter in the United States, they may stop buying Canadian pigs if there is a stigma attached to pork originating in Canada.

That could cause Canada to feed more of its hogs and capture other markets that U.S. hog farmers export to, the two analysts wrote.

Like many retail grocers, officials at Schnuck Markets Inc. chafe at the law. Its officials have testified at hearings to try to get the U.S. Department of Agriculture to make the regulations as painless as possible while still honoring the will of Congress.

Mike O'Brien, vice president of produce for the St. Louis-based chain, said Schnucks puts labels stating origin on 60 percent to 70 percent of the produce in its about 100 stores. But those labels are voluntary, usually applied by the shipper.

For Schnucks, O'Brien said, the cost of implementing the law would be about $3 million a year.

That's to cover the hundreds of different produce items that are stocked an average of five times a week. He said the grocer's invoicing and stocking system is not set up to handle the record keeping required by the law.

The law requires that records be kept by the retailer, the processors and packers and the producers for two years.

Yet, O'Brien said, those records are not open to the public, only to inspectors of the Agriculture Department.

"The law does nothing for the customer. The law does nothing for food safety. The law does nothing for food quality," O'Brien said.

The Consumer Federation of America, a national consumer-advocate group in Washington, said last year in a letter to members of Congress that while not a food safety program, "country-of-origin labeling will give consumers additional information about the source of their food. As a matter of choice, many consumers may wish to purchase produce grown and processed in the United States or meat from animals born, raised and processed here. Without country-of-origin labeling, these consumers are unable to make an informed choice between U.S. and imported products."

A member of the NPPC's board and past president of the Missouri Pork Producers, Rehmeier used to believe that a label saying "Born in USA" would be a good marketing tool - that it would make pork producers' products more attractive to consumers.

Today, though, Rehmeier and others shake their heads in bewilderment at what Congress and the Agriculture Department, charged with enforcing the law, are about to do to the delivery of food to consumers.

Critics of the law note that the Agriculture Department has set up inspection facilities in countries from which foods are imported. To require producers, meatpacking plants, food processors and retail grocers to keep records concerning the origin of food is redundant, critics say, because there already is a system of inspections to ensure quality and safety.

They say that being required to tell consumers the country of origin is not adding useful information because the food already is to have met federal inspection standards.

Rehmeier admitted that stories about one cow in Canada with mad-cow disease would give consumers cause for some alarm, but he said those stories have been exaggerated.

"You have one cow that created that amount of media coverage," Rehmeier said.

Some groups, such as the National Farmers Union, say country-of-origin labeling should not be onerous for producers, processors and retailers.

The farm group points out that most consumers support labeling on foods of all kinds, and the country-of-origin labeling requirement is merely an extension of that concept.

"The law does not impose any additional restrictions in the form of tariff rate quotas or non-tariff barriers to imports," the farm group said in a release on myths and facts about the law. "Many countries already require country-of-origin labeling on a variety of food products."

Chickens and turkeys are excluded from the law. As did others, Plain of Mizzou alluded to possible heavy lobbying by such poultry producers as Tyson Foods Inc. and Perdue.

"As an ag economist, I'm confident this will be very costly to the hog and cattle industry," Plain said. "There are two main criticisms. One is that the record-keeping costs will be quite high. And the other is the benefit to the U.S. farmer is zero."

What's covered

Country-of-origin labeling, required by the Farm Act of 2002, will become mandatory Sept. 30, 2004, for these products:
  • Muscle cuts of beef, pork and lamb; ground beef, ground lamb and ground pork. Poultry isn't covered.
  • Farm-raised fish and shellfish.
  • Wild fish and shellfish.
  • Fresh and frozen -- but not canned -- agricultural commodities. All fresh and frozen vegetables and fruit will be covered.
  • Peanuts. Other nuts aren't covered.

Who's affected

Under rules that will be issued by the Department of Agriculture secretary, any person who prepares, stores, handles or distributes a covered commodity for retail sale is required to keep a verifiable audit trail for two years. Grocers are required to maintain those records, but restaurants are not.


Fines of up to $10,000 can be levied against retailers who willingly fail to comply.

Source: National Pork Producers Council (NPPC) - 3rd June 2003
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