No labelling fix in U.S. farm bill
CALGARY — Canadian hopes for a quick resolution to an ongoing meat labelling battle have been dashed, as the United States Congress prepares to pass a new farm bill that leaves the controversial legislation intact.
“I genuinely believed they were going to fix it,” said John Masswohl, director of government and international relations for the Canadian Cattlemen’s Association, on Tuesday. “I think that makes the disappointment that much worse.”
The Canadian government — backed by industry groups on both sides of the border — had been pushing U.S. legislators to use the recent round of farm bill negotiations to overturn mandatory country of origin labelling, or COOL.
The law, which Canada calls discriminatory, requires meat products sold in the U.S. to be sorted, packaged and labelled separately depending on where the animal was born, raised and slaughtered.
Canadian livestock exporters say they lose more than $1 billion annually due to increased processing and handling costs.
In late 2013, U.S. meatpacking giant Tyson Foods announced it would no longer accept animals from feedlots north of the border and there are fears there may be other ripple effects throughout the industry if COOL is not repealed.
Masswohl said he believes more than one American packing plant — and possibly some feedlots — are at risk of shutting down within the next two months because they can no longer affordably purchase Canadian and Mexican cattle.
However, efforts to sway U.S. legislators were unsuccessful and Congress is expected to pass its final farm bill later this week, with the COOL program unaltered.
In a joint statement with International Trade Minister Ed Fast, federal Agriculture Minister Gerry Ritz said Canada will continue to pursue its case through the World Trade Organization.
Oral arguments will be heard before a compliance panel in Geneva during the week of Feb. 18, and it is expected Canada could be authorized to impose retaliatory tariffs on U.S. exports sometime in the first half of 2015.
The Canadian government has already published a list of possible U.S. goods that could be targeted for retaliatory tariffs, including beef, pork, cereals, baked goods and fresh fruit.
“Our government continues to stand with our industry, and we remain steadfast in taking whatever steps may be necessary, including retaliation, to achieve a fair resolution,” Ritz said.
Alberta Agriculture Minister Verlyn Olson said while trade falls under federal jurisdiction, he was with his federal counterpart in June when Ritz announced the list of proposed retaliatory measures and he fully supports a tough Canadian stance now.
“In terms of our role going forward, I would say to Minister Ritz, ‘Just let us know how we can help,’ ” Olson said. “We’ll certainly be willing to do that.”
In the meantime, Canadian producers can expect the price differential between their cattle and U.S. cattle to continue to grow.
According to Canfax, the market research arm of the Canadian Cattlemen’s Association, Alberta-fed cattle prices for the week ending Jan. 24 were discounted by $22.81/cwt. (price per hundred pounds) to Nebraska-fed cattle. This is significantly wider than the same period last year, when they were discounted by $7.78/ cwt.
Calgary Stockyards owner Bryan Danard said that’s frustrating, particularly because cattle prices are sky-high right now thanks in part to the shrinking size of the North American cattle herd, especially in the aftermath of 2012’s record drought in the U.S. Midwest.
“It’s ironic, because we actually have the highest cattle market in our history in Canada, but COOL has made our cattle sell at a bigger discount than normal,” Danard said.