Do You Care Where Your Steak Came From?
Cold up there, eh?
The latest international controversy is happening on your dinner plate. The question at issue: Do you have a right to know which country your steak came from?
In 2008, Congress began enforcing a law requiring country-of-origin labeling on meat products including pork, beef and lamb. The law was passed in 2002, just a couple of years after mad cow disease cropped up in North America, and its stated goal was to give consumers vital health information. The unstated goal was to give U.S. producers a leg up on Mexican and Canadian ranchers trying to break into the American market.
Six years later, the law seems not to have had much effect on either front. What it has done is create a serious trade dispute between the U.S. and its neighbors. Twice the World Trade Organization has ruled that the labeling rules unfairly discriminate against imports. Canada, which says the rules have cost its producers nearly a billion dollars by cutting into sales of Canadian-born animals to be raised and butchered in the U.S., has threatened $3 billion in retaliatory tariffs on products ranging from meat and vegetables to wine and furniture.
In 2014, the U.S. imported more than 2 million head of cattle from Canada and Mexico and brought in nearly 5 million hogs from Canada. (Canada is the more direct competitor to American ranchers; while little meat is imported from Mexico, much livestock born south of the border is raised and butchered in the U.S.)
Foreign ranchers aren't the only ones suffering under the law. U.S. ranchers' costs -- mostly related to keeping herds of domestic-born animals segregated from imported ones -- amounted to more than $2 billion for the initial changeover and have run into the hundreds of millions each year since, according to the American Meat Institute lobby. As a result, other than some ranchers in northern states such as the Dakotas, Idaho and Montana who feel the labeling gives their products cachet, the very industry the law was supposed to help has turned against it.
And consumers have little reason to like it, either. Fewer than 30 percent of shoppers recently surveyed by Kansas State University researchers were even aware of the country labels. And for those who were, the labels' effect on their decision-making was negligible. In any case, there's no evidence consumers should worry that Mexican and Canadian animals are unsafe. Only four cases of mad cow disease have ever occurred in the U.S. Other meat-borne illnesses such as trichinosis have always been rare. And while there have been scary incidents of E. coli in hamburgers, the labeling law exempts restaurant foods and ground meat. No wonder the Agriculture Department has abandoned the pretense that the law protects health, classifying it under its Agricultural Marketing Service programs.
With so little gained and so much at stake involving top U.S. trading partners, the House last month finally passed legislation to repeal the labeling rule.
The Senate may not be so willing, given that those sparsely populated ranching states have proportionately greater representation there. But perhaps there are grounds for compromise: Senator Debbie Stabenow of Michigan has proposed allowing domestic producers to voluntarily use a "Product of the U.S." label, while lifting the mandate on foreign products. Let's hope Canada and Mexico would agree to that concession. But either way, foreign meat is no longer going be forced to call attention to itself at the butcher's counter.
To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at email@example.com.