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Cattle Industry COOL Summit II

8:00 a.m., MT, December 11, 2003
Red Lion Hotel Denver Central

MEETING NOTES

The first COOL Summit was held on November 18, 2003.  The COOL Summit II was scheduled at the request of the participants from the first Summit to further develop the concepts and ideas generated during the first Summit.  Eighteen representatives from 7 statewide cattle associations, 3 county and regional cattle associations, along with R-CALF United Stockgrowers of America (R-CALF USA) and the National Cattlemen’s Beef Association (NCBA), participated in the Cattle Industry COOL Summit II on December 11, 2003.

Important Notice:  Unless stated otherwise, the following notes reflect ideas generated by the participants but do not necessarily reflect an agreement or consensus on the ideas presented.  These notes reflect an ongoing work-in-progress by the U.S. live cattle industry.

Part 1:  Miscellaneous Provisions of COOL Rules

Ground Beef:  Participants expressed concern over the proposal to exempt ground beef from labeling if the ground beef contained more than 30 percent fat or if it contained water.  This exemption would appear to reduce the amount of ground beef sold at retail that would be labeled.

Slaughtered:  Participants agreed that the word “harvested” should be used in lieu of “slaughtered” for retail beef labels.

Labeling Beef When the Product Has Entered the United States During the Production Process:  Participants expressed concern over USDA’s proposal to go beyond the mandate of the COOL law by requiring that the country involved in each production step be included in the retail label.  For example:  a retail label such as “Born in Canada, Raised and Slaughtered in the U.S.” would be required when cattle spend production steps in multiple countries.  Participants viewed this as the most complicated and most costly labeling system among the three systems discussed:

The least complicated and least costly system would be one that reserved the USA label only for products born, raised, and slaughtered in the U.S.; and for beef that was imported during any production step, the beef would be labeled with the foreign country from which it was imported.  For example:  beef from cattle born in the U.S., raised in Canada, and slaughtered in the U.S. would be labeled “Product of Canada.”

The second least complicated and least costly labeling system would be one that simply listed the countries, in alphabetical order, on the retail label in which the animal spent a portion of its life cycle.  For example:  beef from cattle born in the U.S., raised in Canada, and slaughtered in the U.S. would be labeled “Product of Canada and the United States.”

Participants offered that USDA should mandate the least complicated and least costly labeling system and allow the processing and retailing segments the option of voluntarily adopting the more complicated system. 

Blended Products:  Participants suggested that USDA afford the packing and retailing industries greater flexibility in labeling blended products.  For example:  ground beef derived from cattle from several countries should be labeled as “This product may include beef from any of the following countries: (countries listed in alphabetical order).”

Part II:  Addressing the Critical Flaws in the Proposed COOL Rules

A.  Participants generally agreed that the most prominent flaw contained in the proposed COOL rule is that USDA has authorized packers to “possess and have legal access to producer records” without, in any way, limiting the type of records, information, demands or requirements that packers may impose on producers.

Participants further agreed that the final rules should not grant packers any authority over producers.  Participants surmised that USDA granted this authority to the packers because Congress did not grant USDA authority over cattle producers or cattle.  In response to this challenge, participants developed the following solution:

  1. USDA should prescribe that packers shall rely solely upon producer affidavits for initiating country of origin labeling designations.
  2. USDA should prescribe the information that must be contained in a producer affidavit.  That information should be limited to the following:
    1. The producer’s testament as to the origin or origins of the animal.
    2. An agreement by the producer to provide records to the packer upon a specific request by USDA for the production of such records.
  3. USDA should list the specific records that it will use in determining the validity of an origin claim in the final rule.  USDA should itemize the same records it has previously provided the industry.  For example:  health records, brand inspections, production estimates, feed bills, and the other records listed on USDA’s website.   
  4. USDA should clarify that only USDA has the authority to verify, audit, and administer the labeling program.

Participants believe the foregoing changes to the proposed COOL rules will solve the critical flaw in the rules while effectively addressing the fact that Congress did not grant USDA jurisdiction over cattle producers.

B.  Another flaw in the COOL rules is that USDA did not address the issue of how to identify the origins of older cattle and cattle that have entered the United States prior to the effective date of the COOL law.  This oversight could result in a devaluation of older cattle, primarily breeding stock, whose origin cannot be affirmatively proven by their present owner.  Participants developed the following solution to this challenge:

Proposal for Ascertaining Origins of Preexisting Cattle 

  1. During the 60 day period preceding the effective date of the COOL law, all cattle residing in the United States shall be designated as born and raised in the United States (this is consistent with current USDA-APHIS policy in which all imported cattle in the United States for over 60 days are considered domestic), except:
    1. All foreign cattle bearing a foreign marking or ear tag.  (this would include all Mexican cattle in the United States and, because the border with Canada has been closed since May 2003, there should be few, if any, young cattle from Canada in the United States).
    2. All cattle identified by APHIS as originating in a foreign country.  APHIS would be directed to notify all producers in writing of any cattle in their possession that APHIS has identified as originating in a foreign country.

Participants agreed that this proposal would provide an adequate window to address the issue of preexisting cattle in full compliance with the COOL law as the law would be supplemented with a rule that establishes an evidentiary burden for determining origins of live cattle that would otherwise be unidentifiable.  This rule-based designation of origin would be a one-time event and would effectively prevent the unnecessary devaluation of U.S. breeding stock.

Part III:  Devising a Better Method of Determining Origins of Live Cattle

Participants reviewed the three new options developed during the first COOL Summit held on November 18, 2003, and determined that the hybrid model incorporating both an import marking system and an affidavit-type system was the most workable.  This system addresses USDA’s principle objection to a presumption of domestic origin system.  USDA has stated that the presumption of domestic origin system does not allow USDA to retrace an animal back through its chain of custody.   The following hybrid model incorporates both a presumptive-type system as a secondary, real-time check on the accuracy of the accompanying paper trail that is the primary source of origin information.  This model significantly reduces, if not completely eliminates, the potential for error associated with USDA’s current model of using an affidavit-type system backed up with producer records.  

The Import Marking and Origin Disclosure Model

  1. Packers and USDA shall use existing import markings to verify the accuracy of accompanying transfer documents at the point of slaughter.
    1. To further enhance the effectiveness of import markings on livestock from all present and future importing countries, the cattle industry should pursue the removal of livestock from the J-List (the list of exceptions to the general rule that all imported products be identified with a mark of origin)
  2. A new line or field should be included on all livestock transfer documents enabling each seller to disclose the origins of livestock at every transfer of ownership.  Such documents shall include:
    1. Shippers Agreements
    2. Health Certificates
    3. Brand Inspections
    4. Bills of Sale
    5. Affidavits (needed only if producers retain ownership of livestock all the way through the beef manufacturing process)

Under this model, the packer shall use the origin designation on the applicable transfer document listed above to determine the origin designation of each animal slaughtered.  Additionally, the packer shall inspect the livestock for any foreign markings at the time of slaughter to ensure that the origin designation on the transfer document is verified by either a foreign marking or lack of foreign marking.  For audit and compliance purposes, USDA is afforded a paper trail with which to retrace the entire chain of custody back to the original seller of the animal using the above mentioned transfer documents.  From the producer’s perspective, this model eliminates the expense and burden associated with the accumulation of new documentation (a problem associated with a strict affidavit system).   

COOL Summit II participants will review the foregoing suggestions with their respective boards and a decision to schedule a COOL Summit III will be determined by whether USDA agrees to extend the comment deadline for the COOL rule beyond December 29, 2003. 

The foregoing notes were prepared by Bill Bullard, CEO, R-CALF USA.

 

                            This page was last updated on Monday, April 06, 2009.