Washington, D.C. — Canada doesn’t want a proposed American rule for voluntary meat labelling to disrupt North America’s integrated meat and livestock industry, and thus damage Canada’s meat sector.
“While we, of course, support efforts related to truth in labelling for consumers, we are concerned about the potential real-world consequences of the proposed rule on the integrated Canada–U.S. supply chain for meat, livestock and producers of processed products,” Arun Alexander, Canada’s deputy ambassador to the U.S., said April 25.
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Why it matters: Voluntary U.S. country of origin labelling rules for meat could be as bad as the former mandatory version was for the Canadian livestock industry, groups say.
The comments were made to members of the North American Agricultural Journalists who visited the Canadian embassy.
U.S.-regulated products from animals born, raised and slaughtered in another country, but which are “minimally processed” in the U.S., can currently be labeled as Product of U.S.A.
However, the U.S. Department of Agriculture says many Americans incorrectly believe those products are from animals born, raised and processed in the U.S.
On March 6, the USDA proposed a rule that would tighten that definition. The rule would see only animals born, raised and slaughtered in the U.S. labelled as a U.S. product, but labelling compliance would be voluntary. The proposal is open to public comment until June.
Canadian livestock industry officials say the rule would discriminate against Canadian hogs, pork, cattle and beef exported to the U.S., just as mandatory country of origin labelling (COOL) did in the mid-2010s. They argue that American processors will buy less Canadian livestock, or discount it, to avoid the expense of segregating non-American livestock.
“For Manitoba Pork, this is a concerning development,” said Cam Dahl, manager of Manitoba’s pork producer group.
“We ship three million weanling pigs to the U.S. every year. If these label changes go forward, we’re really concerned that those exports are going to be discounted.”
Tyler Fulton, past-president of the Manitoba Beef Producers and vice-president of the Canadian Cattle Association, is also worried.
“The fact that it is described as a voluntary rule is kind of beside the point,” he said. “If the implementation of it effectively makes it de facto mandatory because packers have all implemented it, and the effect is the same as the previous damage was to Canadian live cattle exports, then we’d go ahead and press the Canadian government to retaliate and change that.
“But more proactively, the Canadian Cattle Association is more than just watching it closely; we’re putting in comments during the consultation period before the June deadline. In fact, the CCA has meetings with the Americans to hopefully weigh in on the subject.”
The Canadian government estimated COOL cost Canada’s beef and pork industries about $1 billion per year between 2008 and 2015. The mandatory labelling rule was repealed Dec. 18, 2015, in the face of $1.1 billion in Canadian retaliatory tariffs approved by the World Trade Organization.
COOL required American processors to include animal birth and slaughter location on labels.
The CCA and the Canadian Pork Council spent close to $4 billion and $1 million, respectively, in legal fees fighting COOL.
To qualify for a Product of U.S.A. label today, the last major transformation of a package of meat needs to happen in the U.S., Dahl said. That means a young Manitoba pig exported to the U.S., where it’s fed to slaughter weight, processed and packaged, is eligible for the classification.
“That would not be the case if the proposed changes to the label take place,” he said. “If the proposed changes move ahead, the pork from this animal would be disqualified from Product of the U.S.A. because it was born in Canada.”
Part of Canada’s almost $70 billion in bilateral agricultural trade (as of 2022) is in live animals and processed meat and is highly integrated, benefitting farmers, processors and consumers in both Canada and the U.S., Alexander said.
His comments echo those of Marie-Claude Bibeau, federal agriculture minister, and May Ng, minister of international trade, export promotion, small business and economic development. The two issued a joint statement March 7.
Collaboration between the two countries “contributes to the growth and resilience of farmers and processors on both sides of the border,” the ministers said at the time. “It also allows us to ensure a reliable supply of high-quality products.”
Bibeau raised concerns about the proposed rule during an early May trip to Washington D.C.
“Canada will also oppose any mandatory COOL measure proposed by the U.S.,” said Jason Kung, a spokesperson from Global Affairs Canada, in an email May 8. “The WTO ruled in 2015 that mandatory COOL measures in the U.S. discriminated against Canadian exporters, and we expect the U.S. to continue abiding to this ruling and its WTO obligations, particularly during a time when food inflation is a major concern for many Canadian and American households.”
Ninety per cent of Canada’s population lives within two hours of the U.S. border and Canadian livestock play a role in many northern states, Alexander said.
“It also contributes to the administration’s goals around competitiveness for the sector. Small and medium-sized processing facilities are the ones that can least afford to segregate product,” he said.
“They also need to run at full capacity and Canadian inputs help ensure their success.
[Our] integrated supply chain reduces the need to truck live animals long distances. Moving animals a few hundred miles north to south along the Canada-U.S. border, as opposed to thousands of miles across the U.S., is better for the animals, the planet, and our wallets.
“We believe there are ways to work together to achieve the twin goals of improved truth in labelling for consumers, while also ensuring the continued integration of our supply chains to the mutual benefit of both American and Canadian ranchers, farmers, processors, retailers and consumers.”
American reporters asked how voluntary labelling, which many assume will be for niche markets akin to Angus Beef, would disrupt supply chains.
The niche assumption is wrong, according to Dahl. If consumers were willing to pay the extra cost to segregate livestock by country of origin, it would already exist, he said.
Costco is not a niche market and meat sold in Winnipeg Costcos now is labelled Product of the U.S.A., he said.
“So when this change comes forward, what is Costco going to do? Is it going to change its marketing and labelling, or are they just going to go to their suppliers and say ‘comply?’ My belief is it will be the latter… It really quickly doesn’t become voluntary if enough retailers like Costco take that stance,” Dahl said.
The Canadian government must take a stronger attitude, he added.
The North American Meat Institute, a U.S. lobby group representing beef, pork, lamb, veal and turkey packers and processors, also believes the proposed rule will result in discrimination against foreign livestock in the same way as mandatory COOL did.
North American cattle prices are strong, so the timing of the proposed rule is odd, Fulton said.
“That free and open flow [across the border] in the long run is the most efficient way, I think, for the North American industry,” he said. “[It’s] that free and open border that really creates the resilience in the supply chain that supports grassroots producers.
“We know that there are major disruptions regionally from time to time, in particular packing plants or due to extended drought, those types of things, and so, really, an open border allows greater resilience of the supply chain.”
