New ‘Made in USA’ label rules could damage Alberta meat exports

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New meat labelling rules in the U.S. could hurt Alberta and Canadian meat exports to its southern neighbour — and will likely raise prices for U.S. consumers, experts say.

Canada and the United States’ long-standing battle over country-of-origin labelling (COOL) for meat products entered a new chapter on Monday, with the Biden administration announcing a new rule that “Product of USA” or “Made in the USA” labels can only be used when the animals are born, raised, slaughtered and processed in the U.S.

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Under current regulations, cattle born and raised in Canada, then transported and slaughtered in the U.S., can be labelled as being from the U.S. Some American associations have also raised concerns that cattle slaughtered and processed in countries such as Mexico can be repackaged upon arrival to the U.S. and given the “Made in USA” label.

The rule is voluntary, meaning meat producers aren’t required to use the labelling, said the United States Department of Agriculture. The department said the rule, taking effect in 2026, will prohibit misleading claims about where meat was sourced.

But if enough U.S. meat producers adopt “Made in USA” packaging, Canadian producers could see their cross-border exports drop, said Dennis Laycraft, executive vice-president of the Canadian Cattle Association (CCA). The CCA on Monday called the rules “onerous.”

“It comes back to how many people are actually going to produce beef using the ‘Product of USA’ label,” Laycraft said. “As we get closer to implementation and people are arranging product to meet that definition, we may start to see (the effect).”

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The effect could be harshly felt in Alberta, home to nearly 50 per cent of Canada’s beef cows. Large numbers of Alberta cattle are sent south for slaughter at a lower cost compared to sending them across the country to areas in Ontario, for example.

Canada last year exported $5.7 billion in cattle to the U.S. and $4.85 billion the previous year, according to the CCA. More than half of Canada’s beef exports go to the U.S., Laycraft said.

Canada’s agriculture minister and international trade minister said in a joint statement they’re disappointed in the decision and will raise it at a trilateral meeting with the U.S. and Mexico in March.

U.S. associations approve of decision

Associations in the U.S. celebrated the decision, with one of that country’s largest cattle associations calling it the end of an “era of consumer deception.”

“No longer will multinational meat packers be allowed to trick consumers into believing that foreign beef was produced by United States cattle farmers and ranchers,” Bill Bullard, CEO of R-CALF USA, said in a statement.

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While Bullard called it a “good step,” he also called on Congress to make the label requirement mandatory.

R-CALF’s request for tighter restrictions comes with its own history. The battle over country-of-origin labelling dates back to 2008 when the U.S. government made it mandatory for all meat to be labelled with the country in which it was born, raised and slaughtered.

When the mandatory rule was implemented in 2008, within a week Canadian cattle producers went from having 17 U.S. slaughter plants accepting Canadian cattle to just seven, with some only accepting cattle certain days of the week to ensure they were segregated from American cattle.

The U.S. repealed the rule in 2015 when the World Trade Organization (WTO) determined the U.S. violated international trade law, a decision that came as a result of Canada’s challenge.

More trade ‘will lead to more affordable food’

But the U.S. direction on country-of-origin labelling has remained a live topic, said Carlo Dade, director of trade and trade infrastructure at the Calgary-based Canada West Foundation, a non-partisan think-tank.

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Dade argued the rules are, to some degree, an attempt to give American meat producers greater market share. Should a large number of producers take up the “Made in USA” labelling, Canadian exports will likely drop and drive up prices of meat for Americans, he added.

“I don’t think this voluntary labelling will work,” he said. “It’ll just be too expensive — beef that’s only produced from cattle raised in the U.S. is way more expensive than beef that’s produced through the integrated supply chains.”

It’s not clear whether there’s an immense appetite among U.S. consumers for America-made products that are more expensive, compared to meat sourced outside of the States, Dade said.

Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, said the rules are more moderate and flexible than their predecessor but “will bring some unnecessary heartaches.”

“You want to trade more. You don’t want to discourage anyone from trading because trading will lead to more affordable food on both sides of the border,” he said.

While Canada could challenge the rule, Dade said its voluntary status makes it a non-tariff trade barrier, which would make Canada’s potential argument to the WTO less compelling.

“Taking something from (mandatory to voluntary) really weakens the argument we’ve used in the past,” Dade said.

mscace@postmedia.com
X: @mattscace67

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