An advocacy paper commissioned and released by the Meat Institute and completed by Decision Innovation Solutions (DIS), titled “The Economic Impact of mCOOL on the Beef and Pork Value Chains,” asserts that reinstating mandatory country of origin labeling (MCOOL) for beef and pork would result in more than $1 billion in annual costs of producing, packing and selling beef and pork, which in turn would increase the consumers’ price of beef by about 9 cents per pound.
R-CALF USA CEO Bill Bullard issued the following statement upon his organization’s review of the Meat Institute’s advocacy paper.
“The Meat Institute (formerly the American Meat Institute and North American Meat Association) is the U.S. trade association representing the world’s largest beef packers with operations in the United States. The Meat Institute has been a persistently fierce and formidable opponent of MCOOL for beef since its congressional enactment in 2002. In 2013, the Meat Institute filed a lawsuit against the U.S. Department of Agriculture in an unsuccessful bid to repeal the agency’s MCOOL regulations for beef. In court filings, the Meat Institute revealed its disdain for MCOOL by arguing that MCOOL was unnecessary because all beef is the same, regardless of where it was produced or by whom. It specifically stated, ‘In short, beef is beef, whether the cattle were born in Montana, Manitoba, or Mazatlán.’
“Decision Innovation Solutions itself does not characterize its Meat Institute-commissioned advocacy paper as an economic study. Instead, DIS self-describes its paper as the ‘Project,’ in which it estimates the impacts of reinstating MCOOL for beef and pork. The Project is not a new economic study but rather is the result of adjusting old data for inflation and inputting recent industry data into outdated economic models – one 17 years old and the other over a decade old.
“Like the Project, those outdated models were founded upon the original 2003 Informa Economics Inc. (formerly Sparks Companies Inc.) study, which Informa Economics Inc. updated in 2009. The 2009 update formed the foundation for both the U.S. Department of Agriculture’s (USDA’s) 2015 study and the Project. Those foundational Informa Economic Inc. studies are widely believed to have been commissioned by meat industry opponents of MCOOL, but unlike the disclosure in the Project, there were no express disclosures in the earlier studies as to who had funded them. Those models were used by both the USDA and meat industry lobbyists to first effectively delay the implementation of MCOOL and weaken its regulations, and then to support its ultimate repeal of MCOOL for beef and pork in late 2015.
“That the U.S. Department of Agriculture would previously rely on historically biased MCOOL cost studies is unsurprising, given the agency itself vehemently opposed Congress’ 2002 enactment of MCOOL. Soon after its enactment, the deputy under secretary for USDA’s Marketing and Regulatory Programs testified before Congress that the administration ‘found the provision requiring mandatory country of origin labeling highly objectionable.’
“At the very least, those outdated models upon which the Project is based incorporate costs associated with old technologies for sorting and tracing beef through the fabrication process, regulatory compliance, printing and product distribution. Indeed, the Project acknowledges its deficiencies, stating that because the structural models and cost estimates underlying the Project are derived from old historical papers, ‘the parameters do not fully reflect contemporary macroeconomic realities.’ It further states the significant shifts in those current realities ‘suggest that the original regulatory implementation cost estimates are likely outdated.’ The Project appropriately suggests that updating these outdated cost parameters with modern primary data would help ensure ‘the model accurately captures the present-day cost structure of slaughter and retail operations.’ The Project’s failure to update its outdated cost parameters relegates it unreliable as an information source for decision-makers.
“Another example of the Project’s bias and unreliability is its unsubstantiated and unexplained assumption that 2.61 million head of steers and heifers would be of mixed origin, resulting in a substantial MCOOL cost implication ranging from $39.17 million to $70.50 million. To justify the 2.61 million head estimate, the Project expects decision-makers to ‘assume’ that the 1.10 million head of imported feeder cattle ‘could lead to 2.20 million heads of steers/heifers [to] be mixed origin.’ It then inflates this quantity by adding 75% of the 5-year average of Canadian imported cattle. The Project provides no reference, citation or analytical explanation as to why the category of mixed-origin cattle was populated with twice the number of imported feeder cattle, nor why it was reasonable to additionally inflate the quantity of mixed origin cattle with 75% of the quantity of Canadian imports. Yet these unsubstantiated assumptions, resulting in 2.61 million head of mixed-origin cattle, feed directly into the Project’s equation for calculating a 5.73-billion-pound volume of mixed-origin beef, and ultimately to its inflated estimate that retail MCOOL cost implications would range from $1.27 billion to $1.45 billion for beef.
“The Project has based key estimates on nothing more than bald assertions that, while promoting the Meat Institute’s anti-MCOOL advocacy, have deprived decision-makers of critical information needed to ascertain the truth.
“Moreover, the Project fails to account for the fact that the entire beef supply chain – from the producer to the packer, distributer, and retailer – was subject to MCOOL for beef sold in grocery stores from early 2013 until its repeal in late 2015. Therefore, the actual costs of MCOOL compliance for each segment of the supply chain are discoverable, if not readily available, should researchers desire to conduct a robust and reliable economic study on the projected cost of MCOOL if it were reinstated today.
“Over the fierce objections and lobbying efforts of the monopolistic meatpackers, food processors and food retailers, consumers continue to enjoy the benefits of MCOOL, which for about two decades has provided them with origin information on their chicken, lamb, fish and shellfish, fruits and vegetables, and various nuts. For a brief period, they also benefited from MCOOL on their beef and pork – until Congress eventually succumbed to the incessant lobbying by the Meat Institute and its allies in late 2015. Bipartisan legislation was recently introduced in Congress to restore MCOOL for beef, and the Meat Institute and its allies are again gearing up to deprive shoppers of their right to know where their beef comes from.
“The Meat Institute’s advocacy paper, which is overtly biased and unreliable, is intended to persuade Congress to vote against reinstating MCOOL for beef.
“Obviously, there is a cost associated with providing consumers with accurate information as to the origins of their beef. But our decades-long experience with MCOOL, as it continues to apply to nearly all other food commodities and did apply to beef from early 2013 through late 2015, clearly indicates the costs of implementing MCOOL were minimal, and the benefits of reinstating MCOOL for beef for both consumers and producers would far exceed those minimal costs. We know this because polling reveals overwhelming support for reinstating MCOOL for beef among the same consumers who have been purchasing other foods subject to MCOOL for years.
“The opportunity to restore MCOOL for beef is now, as Congress is expected to soon pass a new Farm Bill, which is the legislative package in which MCOOL was first enacted in 2002. We urge all Americans to call the U.S. Capitol switchboard 202-224-3121 and ask to be connected to their Senators and Representative to urge them to support MCOOL for beef in the Farm Bill.”
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