The Fallacy of COOL
By Scott George, NCBA President
With the recent action by the U.S. Department of Agriculture (USDA) in releasing their amended Mandatory Country-of-Origin Labeling (COOL) rule, it seems COOL is once again the talk of the sale barn and the cafe. That has me thinking quite a bit about the subject and the National Cattlemen’s Beef Association’s (NCBA) policy on COOL. The NCBA sets its policy at the beginning of every year, with members and state affiliates bringing forward resolutions to be discussed in committees made up of cattle producers, and then finally voted on by a mail-in ballot sent to all 24,000-plus members of NCBA. And it is well known that NCBA has long been opposed to any mandatory country of origin labeling rule or proposal.
It seems as if the first thing that is said whenever COOL is brought up is, “I am proud of the cattle my family raises,” and that is absolutely correct. I too am very proud of my family’s operation and all the work my wife and I, with our children and grandchildren, do to produce great beef. But a mandatory labeling program run by the federal government is not the way I want to showcase my product and add value. Labeling programs can work - just look at Certified Angus Beef or Safeway’s “Rancher’s Reserve.” These are marketing programs that are run by individuals with a specific interest and that is to promote and sell more beef to put on dinner tables across America. That is why these programs are successful. Additionally there is a tremendous amount of time and effort that goes into marketing these programs to the consumer.. But slapping on a label that says where this product was born, raised and slaughtered does not achieve the same result. In fact, a study by Kansas State University conducted in November of 2012 titled Mandatory County of Origin Labeling: Consumer Demand Impact made some key findings on this subject. The study found that mere country-of-origin information has not impacted consumer demand for beef or other covered products, and in fact, that many consumers are unaware labeling information exists. This is the issue with allowing the federal government to mandate a marketing program - it is not in their wheelhouse. Marketing at its very core relies on the distinction of one product from another. Neither USDA, nor any other government agency, can make that distinction based on origin labeling.
Lately, there have been studies touted by proponents of labeling that indicate consumers prefer to see country of origin labels. These studies are nothing new, and the Kansas State study found the same preference. However, what is interesting is that even with COOL in full force since the 2008 Farm Bill, only the Kansas State study questioned participants on their current knowledge of labeling and they found an overwhelming majority were not even aware labeling information was currently in place. If you ask a customer, “Do you want more information on this product?” what would you expect the answer to be? Affirmative, we all enjoy more information but the question is, how much are we willing to pay for it? Research has shown that when specifically directed to the label, a “Product of North America” label is approximately as valued by our customers as a “Product of the USA” label.
Finally, both the current and the amended COOL rules add costs to cow/calf producers, feeders, processors and retailers. These costs are then passed on to the consumer. But what is the consumer getting for these costs? As near as I can tell, nothing. There are already well supported marketing programs that benefit the consumer. The Office of Management and Budget has found that the amended final COOL rule will have a “significant” economic impact on the industry, in excess of $100 million. These costs will come in the form of increased tracking of animals and increased costs of physically printing and attaching labels.
But why not label beef? After all, nearly everything we buy is labeled. My shirt says product of Indonesia, my fuel containers were products of China and the distributor cap I bought for my Chevy was a product of Mexico. But my shirt does not say that the cotton is grown in USA, spun in China, woven in Vietnam and sewn in Indonesia. And to add another wrinkle, unlike cotton, cattle are not a static product. I can tell you first hand, cattle don’t stay where I put them. They move, they roam, they mix and lose ear tags. That bag of cotton stays just where it’s put. But you know, in the end, when I go to town to buy that shirt, I don’t prefer a shirt made in Indonesia. In fact I don’t even look at the tag. I know what shirt I like. Indonesia did not do anything to entice me or my wife to purchase that shirt. That company is the one that spent the money marketing that shirt, they’re the ones that sponsored the rodeo I take my family to in the summer and they’re the ones that stand behind the quality of their product. It’s often said that we live in a global economy, but even international, can in fact be local. We have many members across the country that buy feeder cattle from Canada or Mexico or graze cattle across international lines. Those cattle may spend some time on grass, or go straight to feed in the Midwest, then go on to slaughter here or elsewhere. We offer the consumer no advantage in labeling those animals any differently than we do a steer born, raised, and slaughtered right here at home.
What consumers actually want is pretty simple - they want a safe product for them and their families and they want a consistent and enjoyable eating experience. We all know beef knocks it out of the park when it comes to meeting customer demands on both those fronts. So rather than bicker over COOL, let’s work together to continue to improve beef safety and maintain quality through producer led, consumer minded programs like Beef Quality Assurance and other Checkoff programs to ensure we continue to deliver on that great beef experience.