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COOL Challenge Could Come Soon: CPC

U. S. plants are “very cagey.”

– FLORIAN POSSBERG, CPC

A Wo r l d Trade Organization challenge to U. S. country-of-origin labelling is virtually certain and recent remarks by U. S. Agriculture Secretary Tom Vilsack may have speeded it up, industry insiders say.

A letter from Vilsack to U. S. meat processors in January asking them to go above and beyond the rule in labelling meat packages may have moved Canada’s threatened WTO challenge up by several months, said Florian Possberg, a Canadian Pork Council director.

In his letter, Vilsack hinted broadly he might force processors to apply COOL more stringently if they didn’t do so on their own.

Possberg called Vilsack’s comments “problematic” because it creates industry uncertainty just when U. S. processors were starting to adapt to the controversial rule.

As a result, Canada may take the U. S. to the WTO sooner rather than later, he said during last week’s Manitoba Pork Council annual meeting.

TRADE ACTION

Federal Agriculture Minister Gerry Ritz has threatened trade action against COOL if it hurts Canadian pork producers. Earlier this year, Ritz said the challenge was “idling at the curb, waiting to go” and Ottawa would move “when the time is right.”

The CPC and the Manitoba Pork Council are urging producers to submit documentation that COOL is affecting hog and weanling exports to the U. S. and damaging their financial margins.

MPC delegates at their meeting heard that no major U. S. packing plants are now accepting Manitoba slaughter pigs. Hog shipments from Manitoba to the U. S. have dropped from 24,000 a week before September 2008, when the interim final COOL rule was published, to 3,000 weekly after the rule became official March 16.

Major U. S. companies have stopped taking Category B pigs (those born in Canada and finished in the U. S.) or will do so by April 30. Those include Hormel, Smithfield and Cargill.

DISCOUNTED

Tyson and Swift will continue to take Category B pigs but plants will discount finished animals by $2 to $4 each, the meeting was told.

Weanling shipments from Manitoba to U. S. barns have dropped from a weekly pre-COOL rate of 120,000 to 80,000 as a result.

If USDA enforces COOL on-farm, U. S. finishing barns will close and the number of Manitoba sows dedicated to weanling exports could drop by half from 170,000 to 85,000, said Andrew Dickson, Manitoba Pork Council general manager.

But the economic impact will also be felt in the U. S. if hog finishers go broke and feed mills lose their customers, added Possberg, who is president and CEO of Big Sky Farms in Humboldt, Saskatchewan.

Vilsack may realize he has stirred up a hornet’s nest and could be trying to backtrack, Possberg suggested.

If the secretary does nothing, U. S. packers may decide they can work with COOL and the WTO challenge could recede, said Possberg.

Right now, however, plants are “very cagey” and the situation is very uncertain, he said.

If COOL continues to hurt Canadian producers, a challenge could materialize before the end of 2009, Possberg said.

However, it could take 18 months to get a final remedy and Canadian producers “can’t live that long.” [email protected]

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