Country of Origin Labeling (COOL) and the Cattle Industry

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

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

3. 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

4. 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

5. 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

6. 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)

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

8. 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

9. 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

10. 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

11. 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

12. 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.”

13. 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

14. 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)

15. 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.

16. 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.

17. 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

18. 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.”

19. 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

20. 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.”

21. 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

22. 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”

23. 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

24. 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

25. 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

26. 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

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

28. 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

29. 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

30. OKLAHOMA COOPERATIVE EXTENSION SERVICE