First, I had better explain what COOL stands for in a farmers language.  COOL stands for 'Country of Origin Labeling.'  The purpose of COOL is to label our products that are grown in the U.S. That way the ordinary grocery shopper knows that the products they are buying are safe, and inspected by USDA for anything that would affect quality.  It also allows the shopper to 'buy American' if they so desire. COOL labeling is required now on meat, fruits and vegetables, nuts, and most food products that are grown here. 

So what is the problem with COOL and why are so many people from other countries complaining about this new rule here in the U.S.?   You would think this is a very good idea and it shouldn’t cause hardly any problems. WRONG! 

On the meat side, the U.S. is the only country in the world that imports large volumes of livestock, including large numbers of feeder cattle and weaning pigs from both Canada and Mexico. The reason this happens is the availability of large amounts of cheap feed that can be used to grow these livestock.  Also, the climate in the U.S. is a lot better for animals to put on gain than either of the other countries. So, in the past we would ship the hogs and calves into the U.S., feed them, process them, and then ship the meat back to to our north and south neighbors. 

Who do you think our top trading partners are?  Currently, Mexico and Canada.  We import more beef and pork and then export more to them than any other countries in the world.  We don’t import a large volume of processed meat from these countries, but we do import large numbers of live beef and pork. 

In the past couple of months the governments of Canada and Mexico have filed complaints claiming that the U.S. is in violation of the North American Free Trade Agreement (NAFTA) because of COOL.  Why is COOL making these governments so unhappy?

When the packing plants label their products they now have to be able to prove where the animal was grown and label it as of U.S. origin, or not. This sound easy, but what do you do with the pigs born in Canada and fed here and the feeder cattle that are shipped into the U.S. and fed and processed here? The packers are having problems knowing where the animals came from.  It also is difficult to keep carcasses separated in the plants.  Therefore, only some plants are used to process the livestock that are imported. This has caused a price difference for livestock that are imported into the U.S. 

But is there really that much price difference in the livestock coming over the borders?  I had the opportunity to meet with some high-level Mexican government officials this past week, and they are very upset. This rule is causing protests and riots in their country.  For example, Mexico typically ships 400 lb. feeders into the U.S.  Right now those feeders are selling for $375 to $400.  It takes $40 to do the paperwork and health processing. Then, the buyers of those calves are discounting another $60 to $80 for being imported. The reason I was given for that is because, as mentioned earlier, only certain plants will process these animals and that limits the places the animals can be marketed.  Our rules are costing the Mexican farmer in excess of $100 per animal to export to the U.S.  If I lived in Mexico, I would be upset also.

I hope that the new administration takes a good look at this problem. I know that if it doesn't, the Mexican officials that I talked with this last week said that they are thinking about shutting down all trade with the U.S.  One comment was if they shut down energy exports, especially the oil shipped to the U.S., they believe they would get some attention.

Comments?