Made in the U.S.A.?
Putting Country of Origin beef labels back on the menu
The summer barbecue season is fast approaching. It's time to get out the grill, and compare featured menu items in supermarket ads. A 2023 USDA survey of 4,800 Americans reveals that 40% check for a U.S.A. label when shopping at the grocery store.
The good news for U.S. consumers – and U.S. farmers – is that only beef and pork products born, raised, processed, and sold in the U.S are stamped with the label, "Product of U.S.A."
This sounds like a no-brainer, doesn't it? But surprise – it's not true! Current USDA rules allow meat products from animals born, raised, and slaughtered outside the U.S to bear the Product of U.S.A. label as long as they're packaged here.
This deceptive labeling has been in place for the past eight years. A new Voluntary Labeling of FSIS-Regulated Products with U.S. Origin rule was announced in March, and meat packers will have an additional two years to comply. The four largest multinational meat (beef) packers, National Beef, Tyson, JBS-US, and Cargill Beef have been using Made in U.S.A. labels on animals outsourced from other countries, including Canada, Mexico, Australia, and Brazil. Meat packers can package and sell imported products more cheaply, since some of these countries require fewer health and safety regulations for both animals and workers. American producers have been at a disadvantage in selling their animals.
How could this happen?
U.S. Neighbors Have Beef with COOL
In the early 2000s, the Ranchers-Cattlemen Action Legal Fund (R-CALF)) and the Organization for Competitive Markets, founded by Mississippi cattle producer, Fred Stokes, worked tirelessly to obtain a mandatory County-of-Origin Label (M-COOL) that would differentiate U.S. products at the meat counter.
M-COOL was first proposed in 2002, and Congress included it in the 2008 Farm Bill, which USDA implemented in 2009. These regulations required that all imported products must have an origin label when they pass through the U.S. Customs and Border Protection into the U.S., and the label must remain in place through its retail sale.
For instance, M-COOL labels might specify "Born in Canada, Raised and Slaughtered in the U.S." In 2015, Mexico and Canada raised objections, calling M-COOL a non-tariff trade barrier. This caused an international trade dispute, and the World Trade Organization ruled against the U.S. The USDA quit enforcing M-COOL for beef and pork, and Congress repealed it in 2015. (M-COOL still is required for lamb, chicken, fish, nuts, fruits, and vegetables.)
By the end of 2015, beef imports had skyrocketed. According to R-CALF, meat processors made almost $200 in profit per cow in 2016, while cattle producers lost $380 per head.
In 2018, the American Grassfed Association and the Organization for Competitive Markets petitioned the USDA for label changes. The U.S. Cattlemen's Association followed suit in 2019.
However, the North American Meat Institute, which advocates for large, multinational meat processors, opposed the change. In 2021, President Biden issued the U.S. Executive Order on Promoting Competition in the American Economy, and the label change was proposed as part of an effort to strengthen the meat supply chain.
The deceptive Product of the U.S.A. label not only misleads consumers; it creates financial repercussions for U.S. farmers because multinational meat processors can import beef to increase supplies, depressing U.S. farmer prices, and still benefit from the U.S. A. label:
· Over the past five years, "farmers' share of the price of beef sales has dropped by more than a quarter, from 51.5% to 37.3%, while the price of beef has risen." (USDA Economic Research Service)
· Since 2015, cattle prices have declined by 35%, and retail beef prices have risen 8%.
· Beef imports typically comprise about 12% of total beef consumed in the U.S. But imports in 2023 rose their highest levels since 2005, due to drought conditions precipitating U.S. herd reductions.
The happily-ever-after end scenario should be that the new rule will provide consumers with more transparent information, and U.S. farmers and ranchers with greater potential to be fairly compensated.
I wish it were that simple.
Impact of Foreign-owned Meat Processors
Unlike the original M-COOL, when this new rule finally takes effect in January, 2026, it will be completely voluntary. No label will be required. "The other not so good news is that the final rule doesn't require imported beef products to retain their origin label through retail sales, meaning to the grocery store," says Bill Bullard, CEO of R-CALF.
The four largest meat packers have a stranglehold on the beef industry. In the mid-1970s, four meat packers controlled 20% of the U.S. beef market. Today, four packers control more than 85%. Two of these are owned, or primarily owned by Brazilian companies: JBS-US and National Beef Packing Company, which is 80% owned by Marfrig Global Foods S.A. The profits, of course, flow to the overseas owners. (Marfig also has operations in Argentina, Uruguay, and Chile.)
In 2017, the USDA temporarily blocked imports of Brazilian processed beef after rejecting 11% due to "public health concerns, sanitary conditions, and animal health issues." Following the U.S. ban, Brazil's Ministry of Agriculture found Brazilian meat companies, including JBS, had been bribing its federal meat inspectors. Subsequent lawsuits have been filed against the four largest packers by Pacific Agri-Products, Inc. a California-based food distributor, as well as R-CALF, charging collusion to restrict the number of cattle slaughtered in order to artificially depress live cattle prices and force cattle producers into long-term contracts. JBS paid settlements in 2022 and 2023, but denied any wrongdoing.
The beef industry is the least consolidated livestock industry, yet vertically-integrated packers have significant influence both over cattle purchases from farmers as well as the price of beef at the supermarket. They are both buyers and sellers. Contracts are common in the vertically integrated poultry and pork industries, where Tyson Foods, JBS, and Cargill also are big players. (Smithfield Foods is owned by the Chinese WH Group.)
The revolving door between the North American Meat Institute and the USDA also has undermined enforcement of competitive meat markets.
Restoring Resilience to U.S. Food Supply Chain
Food security rose to the forefront during Covid-19. Meat processors were accused of manufacturing a "protein supply crisis" to avoid implementing extra health measures for their workers. Many of these so-called essential workers died. Closures in beef packing plants and the cyberattack at JBS in 2021 also highlight the fragile nature of the beef supply chain, and lack of resilience in the U.S. food system.
Following Covid-19, the USDA awarded $22 million in grants to 110 small local meat lockers in 37 states, including 13 in Iowa. Covid-19 produced an uptick in direct beef purchases from farmers. (Full disclosure: my husband and I have a small cow-calf herd, and work with a local meat locker to sell beef quarters and halves to individual customers.)
The USDA also has awarded $1 billion from the American Rescue Fund to regional, independent meatpackers, including the new Cattlemen's Heritage Beef Co., in western Iowa, and West Liberty Foods, a plant owned by poultry producers.
Product of the U.S.A. labels are a small tool in the toolbox to offset the power of mega packers to keep prices low, and also help U.S. cattle producers stay in business. Legislation has been introduced in Congress to include a remedy for the deficits of the new Country of Origin rule in the 2024 Farm Bill. (S. 52 and H.R. 5081)
"In the past five years, 107,000 independent cattle producers went out of business," Bullard says. "Unfortunately, those consumers who believed the U.S.A. label was supporting these U.S. beef producers were being deceived."
In 1998, Mississippi cattle producer Fred Stokes founded the Organization for Competitive Markets. In 2004, when I interviewed Stokes for a story in Successful Farming following the M-COOL passage, he told me, "Now consumers can decide for themselves what they wish to purchase, rather than being kept in the dark." Today, Stokes, who is 89 years old, knows that the U.S. still is two years away from implementing this partial victory. He hopes to live long enough to see the day.
Cheryl, I appreciate your columns. I learn so much with each column. Thanks
Really impressive work, again, Cheryl. The National Farmers Union and Iowa Farmers Union have been working tirelessly on this issue as well. Unfortunately, West Liberty Foods just announced it's laying off hundreds of people. Wonder where all that federal money is going. It ain't going to those jobs, that's for sure.