If mandatory country-of-origin labeling (mCOOL) for beef and pork is reinstated, it would cost the U.S. meat supply chain more than $1 billion annually — and consumers would bear most of that burden, the Meat Institute announced after the release of a new economic analysis by Decision Innovation Solutions.
mCOOL, a federal requirement that would obligate retailers to disclose the country of origin for beef and pork products, was last enacted under the 2013 USDA requirements before being repealed following World Trade Organization trade disputes.
“This study proves there are real and significant costs to mCOOL which would raise the price of meat for consumers already struggling to afford groceries,” says Meat Institute President and CEO Julie Anna Potts. “mCOOL would burden both packers and livestock producers with added costs at a time when beef packers are losing money due to the smallest herd size in 75 years causing record high prices for cattle.”
The study, “The Economic Impact of mCOOL on the Beef and Pork Value Chains,” updates previous USDA and industry research using current production, trade, consumption and market data to evaluate the potential impacts of reinstating the 2013 mCOOL requirements. The findings reveal that compliance costs associated with tracking, recordkeeping, product segregation, labeling and verification would substantially increase costs throughout the beef and pork value chains. Read the full report here.
More Than $1 Billion in New Annual Costs
Reinstating mCOOL would cost the beef and pork industries approximately $1.02 billion in the first year alone, including $721 million for beef and $296 million for pork. Most of these expenses would be recurring operational costs rather than one-time investments, according to the Meat Institute.
Over time, those costs would continue to grow, reaching an estimated:
Timeframe Total Cost to Industry Year 1 $1.02 billion 5 Years $4.8 billion 10 Years $10.1 billion
“Enacting mCOOL now would raise consumer costs and could hurt consumer demand, the one force keeping the beef industry moving through a difficult cattle cycle,” Potts says. “And most importantly, there is a new voluntary ‘Product of USA’ label that is already helping consumers to purchase beef and pork born, raised and processed in the U.S. There is simply no need for a new label that will hurt the entire value chain.”
Higher Food Costs for Consumers
The study points out that compliance costs would largely be passed through the supply chain and reflected in higher food prices for families. Researchers estimate:
- Consumers would pay an estimated $835 million more annually for beef purchases.
- Consumers would pay an estimated $284 million more annually for pork purchases.
In total, this represents more than $1.1 billion in additional food costs for consumers every year.
Who Bears the Greatest Burden?
Meatpackers, processors and retailers are expected to “shoulder the largest compliance burden” because they would be responsible for tracking animal origin information, maintaining separate inventories, segregating products, modifying production schedules, updating labels and documenting compliance.
Among the study’s findings:
- Retail beef experiences the highest compliance costs in the supply chain.
- Beef processors and retailers account for the majority of implementation expenses.
- Retail beef compliance costs alone could reach nearly $488 million in the first year and exceed $5 billion over 10 years under one modeled scenario.
Livestock Producers Would Also Be Affected
The report finds producers would face impacts from reduced market efficiency, increased documentation requirements and less flexibility throughout the supply chain. Previous USDA analyses cited in the study found mCOOL can create market disruptions that reduce livestock value and increase overall system costs.
While labels provide additional origin information, researchers found little evidence that mandatory origin labeling significantly increases consumer demand for beef or pork products. The primary measurable effect would be higher compliance costs, higher food prices and added operational complexity throughout the livestock and meat industries.
