Traceability

1. Traceability • The ability to trace and follow a food, feed, or food producing animal or substance intended to be or expected to be incorporated into a food or feed, through all stages of production, processing, and distribution 20

2. Background • Host of Names and Related Issues • Quality Assurance • Identification systems • Identity preservation • Segregation • Process control • HACCP • Process verification • COOL

3. Forces for Traceability • Risk and Liability • Loss of customers • Loss of business • Food Safety • Food Quality • Intrinsic and extrinsic characteristics • GMO Crops • BSE • Biosecurity

4. Are Consumers Willing to Pay for Traceability? • Traceability has Some Value Itself • More Value as Means of Verifying Other Characteristics Like Food Safety • Can Add Value from Marketing • Not necessarily just a cost

5. Animal Identification • Biosecurity and Disease Forced Issue • ID Itself is Not the Solution • Doesn’t make food safe • Doesn’t prevent foreign disease • Market Access • US beef exports to Japan

6. Animal Identification • Disease • Monitoring • Control and eradication • Emergency preparation • Food Safety • Compatibility • Defined standard • Compatible systems through sector

7. Role For Government • Regulation • Set the Standards • Oversight and Inspection • Credibility • Process Verification

8. Summary • Rapidly Changing Area • Take some work to remain abreast of changes • Animal ID System Moving Forward • Industry and government action • Moving Forward in All Areas

9. Country of Origin Labeling (COOL) and the Cattle Industry Source: Derrell S. Peel, Livestock Marketing Specialist, Oklahoma State University

10. Mandatory COOL • Proposed Mandatory Rules • Issued October 27, 2003 • Comment Period • Ends December 29, 2003

11. What is Country of Origin Labeling • Included in 2002 Farm Bill (PL 107-171) • Amends Ag Marketing Act of 1946 • Covers 500+ retail products • Beef, Pork, Lamb (whole muscle and ground) • Fresh and Frozen Fruits and Vegetables • Seafood (wild and farm-raised) • Peanuts • Administered by AMS

12. What Country of Origin Labeling Isn’t • Is not animal health or food safety • FDA (food) • FSIS (meat) • APHIS (animals) • Is not market grading • AMS

13. Components of COOL • Retail product must be labeled • Food service excluded • Including deli’s and salad bars in retail establishments • Excludes processed foods • Becomes mandatory September 30, 2004

14. Who Must Label - Retailer • Retailer has meaning given in Perishable Agricultural Commodities Act (PACA) – a business engaged in the selling of fresh and frozen fruits and vegetables at retail with an annual invoice value of more than $230,000 • Approximately 4,500 licensees (37,000 stores) • PACA definition excludes butcher shops, fish markets, and exporters • Exempts food service establishments including those within retail establishments (e.g. delis and salad bars)

15. Consumer Notification Required at Retail • Country of Origin • Label or notice must: • Be legible • Be in English • Not obscure other required information

16. Exclusions • Covered commodities are excluded if an “ingredient in a processed food item” • Regulation defines “processed food item” • Does not exclude covered commodities just because they have been further prepared for consumption

17. Processed Food Item – Change of Character • A combination of ingredients that include a covered commodity that has undergone a physical or chemical change, and has character that is different from that of the covered commodity • Examples of covered commodities excluded because of change of character: • Oranges squeezed to make orange juice • Pork bellies cured and smoked to make bacon

18. Processed Food Item – Combination of Substantive Food Components • A covered commodity that has been combined with: • Other covered commodities • Other substantive food components, And has a character different than that of the covered commodity • Examples of covered commodities excluded because they are a combination of substantive food components: • Bagged salad (e.g. lettuce, carrots and cabbage) • Fruit trays/Vegetable trays (e.g. party trays) • Seafood medley (e.g. shrimp, scallops and clams) • Mixed nuts

19. Covered Commodities Required to be Labeled • Examples: • Solution-enhanced and seasoned pork loin • Cooked beef roast • Canned salmon • Bagged lettuce • Canned roasted and salted peanuts • Breaded shrimp

20. Covered Products – Muscle Cuts of Beef, Lamb and Pork • “All muscle cuts of beef, lamb and pork whether chilled, frozen, raw, cooked, seasoned or breaded.”

21. Beef Products • Whole muscle meats • Product of U.S.A. • Mixed Origin • Imported • Ground beef • Each specific origin included in the blend must be included on the label in alphabetical order

22. Labeling Requirements • Product of U.S.A. • Born, Raised and Slaughtered in the U.S. • Product of Country X • Labeled from entry until final sale • Label only covers importing country (not other countries of birth or production)

23. Labeling Requirements cont. • Mixed Origin (whole muscle) • Examples • Imported from country X, raised and slaughtered in U.S. • With records: Born (and raised) in country X, raised and processed in U.S. • Imported from country Y, slaughtered in U.S. • With records: Born in country X, raised in country Y, processed in U.S.

24. Labeling Requirements cont. • Mixed Origin (ground or blended) • Example • Ground beef – Product of Australia; Imported from Mexico, Raised and Slaughtered in U.S.A.; Product of U.S.A.

25. Recordkeeping • Retailers must label covered commodities • Must keep Point of Sale records for 7 days • Must keep records of origin for 2 years • Suppliers must provide information about country of origin • Producers, handlers, processors, packers, importers • Verifiable (auditable) records • Suppliers must maintain records • Affidavits may be used to certify origin and existence of records

26. Recordkeeping - Suppliers • “Any person engaged in the business of supplying a covered commodity to a retailer, whether directly or indirectly, is required to maintain records to establish and identify the immediate previous source and the immediate subsequent recipient of a covered commodity, in such a way that identifies the product unique to that transaction, for a period of 2 years from the date of the transaction.”

27. Recordkeeping - Suppliers • Suppliers must provide origin information to buyers • Records must identify previous source and subsequent recipient of product • Must possess or have legal access to records that substantiate origin claims • Must maintain records unique to each transaction for 2 years

28. Recordkeeping - Suppliers • “For suppliers that handle similar covered commodities from more than one country, the supplier must be able to document that the origin of a product was separately tracked, while in their control, during any production or packaging processes to demonstrate that the identity of the product was maintained.”

29. Enforcement and Violations • Retailers and suppliers are subject to enforcement provisions • $10,000 fine for willful violations • USDA-AMS will conduct compliance reviews • USDA-AMS will initiate investigations and enforcement actions • Other statutes may apply as well

30. COOL is a Food Labeling Bill • Food Labeling is covered by the Food and Drug Administration (FDA) • Code of Federal Regulations • Title 21, Chapter I, Part 101.18 • Misbranding of Food • “Among the representations in the labeling of a food which render such food misbranded is any representation that expresses or implies a geographical origin of the food except when such representation is a truthful representation of geographical origin”

31. Implications for Cattle Industry • Probable minimum cow-calf records • Owner and location • Breeding herd inventory • Purchased animals • Cull sales • Raised animals • Number and Sex of Births by year • Animal sales • Buyer • Date • Animal sex • Breeding animals are covered by COOL

32. Implications for Cattle Industry • Probable minimum stocker records • Put-together groups • Seller and location of purchased animals • Date and sex of purchased animals • Animal sales • Buyer • Date • Animal sex • Must be able to trace animals from different source groups through management sorting and commingling into several sales groups

33. Implications for Cattle Industry • Probable minimum feedlot records • Each pen • Seller and location of purchased animals • Date and sex of purchased animals • Animal sales • Buyer • Date • Animal sex

34. Implications for Cattle Industry • Probable minimum packer records • Each shift or slaughter group • Owner and location of purchased animals • Date and sex of purchased animals • Meat sales by slaughter/fab group • Lot number, date and plant

35. Individual Animal ID • Required? – No, in fact, forbidden as a USDA mandate • Necessary? – Maybe not • Helpful? – Definitely • Especially for stocker and feedlot sectors

36. Current Status of COOL • House and Senate Appropriations actions have different language regarding implementation of COOL • These differences are yet to be reconciled • Various proposals to modify or repeal COOL

37. Challenge for the Industry • Plan for compliance • Rules are uncertain and subject to change • Make beneficial use of new information • Use records to improve production and marketing