USDA Revises Country of Origin Labeling Rule for Muscle Cuts

May 29, 2013

Introduction

On May 23, 2013 the United States Department of Agriculture (USDA) issued final regulations that take effect immediately (but will allow for a six month education period) to require revisions to Country of Origin labeling (COOL) requirements only for muscle cuts of beef (including veal), pork, lamb, chicken and goat meat. USDA issued the proposed regulations on March 12, 2013 for public comment and only permitted 30 days to respond. NGA along with the American Meat Institute, Food Marketing Institute, North American Meat Association and others protested the short comment period and opposed the proposed changes because of the costly burdens imposed on the industry and the likelihood of another compliant being filed the Canada and Mexico with the World Trade Organization due to the change.

The COOL regulations which took effect on March 16, 2009 require retailers at point of sale to notify their customers of the country of origin covered commodities which include: muscle cuts of beef (including veal), lamb, chicken, goat, pork; ground beef, ground lamb, ground chicken, ground goat, ground pork; wild and farm-raised fish and shellfish; perishable agricultural commodities (fresh/frozen fruits and vegetables); macadamia nuts; pecans; ginseng; and peanuts. As of the May 23, 2013 final rule retailers must specify the production steps-born, raised and slaughtered- as part of the country of origin signage, placards, and/or labels for muscle cuts, and processors can no longer commingle muscle cuts of covered commodities, discussed further below.

 

There is much confusion surrounding the final rule and how USDA intends to enforce the rule during the education period. USDA "understands it may not be feasible for all affected entities to achieve 100% compliance immediately...Therefore during the six month period following the effective date of the regulation (May 23, 2013), AMS (Agricultural Marketing Service) will conduct an industry education and outreach program concerning the provisions and requirements of this rule."  In addition, USDA said muscle cut products that were produced or packaged before May 23rd will be allowed to clear the system.  Finally, existing label and package inventories may provide less specific origin information (Product of Country X and the U.S.) However, "As long as retail establishments provide more specific information via other means (e.g. signage), the Agency will consider the origin notification requirements to have been met until these existing label and package inventories have been completely used.

NGA and others are evaluating potential options to contest or challenge the rule, either legislatively or administratively. Canada and Mexico may again challenge the U.S. COOL rules as being discriminatory before the World Trade Organization, which means that USDA is imposing a rule on retailers, wholesalers, and the industry that may have to be changed again in a year or two. If you want to take action now tell your member of Congress when they are back home this week how costly and crazy this rulemaking is and how it is adversely affecting your business.  In the meantime, NGA will work with the USDA to clarify the final rule, particularly in regard to signage and the six month education period allotted.

Final rule can be seen here.

USDA FAQ on final rule can be seen here.

Summary

In response to a World Trade Organization ruling, the USDA released a final rule to amend Country of Origin Labeling (COOL) regulations for muscle cuts of beef, pork, lamb, chicken and goat meat. Below are the major provisions in the rule (aimed at providing consumers with "more specific" information):

1.)   Origin destinations for muscle cut covered commodities derived from animals slaughtered in the U.S. would be required to specify the production steps of birth, raising, and slaughter of the animal from which the meat is derived that took place  in each country listed on the origin destination

2.)   Eliminate the allowance for any commingling (primarily by producers/processors at the processing level) of muscle cuts covered commodities of different origins (does not impact ground product).

3.)   Change definition of retailer to include "any retailer subject to be licensed as a retailer under the Perishable Agriculture Comedies Act" (PACA) (7 U.S.C 499b)

a.)   Aimed at attempting to capture a retailer that may not have a PACA license, but should have one and be covered by COOL.

Compliance

1.)   The new final rule effective date is May 23, 2013. However, during a six month period following the effective regulation date, there will be an industry education and outreach program regarding the final rule.

2.)   A "reasonable time" is allowed for existing livestock of muscle cut covered commodities labeled in accordance with 2009 COOL regulations that are already in the chain of commerce to clear the system, therefore the final rule requirements do not apply to muscle cuts of covered commodities produced or packaged before May 23, 2013.

3.)   The Agency believes that providing an education and outreach period and allowing existing livestock to clear the chain of commerce is necessary to prevent retailer and supplier confusion.

4.)   The Agency recognizes that for some period of time following education and outreach, existing label and package inventories may provide less specific origin information (born, raised, slaughtered). As long as retailers provide more specific information via other means (signage) the Agency will consider the origin requirements have been met until these existing label and package have been completely used. It is unclear how retailers will implement this and retailers will enforce this.

Below differences will be discussed between the Prior Rule and the Final Rule.

Prior Rule refers to regulations that took place from March 16, 2009-May 23, 2013 for muscle cuts.

Final Rule refers to the final rule that the USDA issued on May 23, 2013 for muscle cuts and made effective immediately. Note: prior COOL rules for fruits, vegetables, fish and shellfish, peanuts, ginseng, and macdemia remain the same and are not affected the changes to muscle cuts.

Major Provisions in Proposed Rule More Defined:

Labeling Covered Commodities of U.S. Origin

Prior Rule : Animals born, raised, and slaughtered in U.S. are labeled "Product of the U.S".

Final Rule: Requires information from each step in process (Origin of where animal was born, origin of where animal was raised, and origin of where animal was slaughtered).

Example: If the animal was born, raised and slaughtered in the U.S-origin labeling would be "Born, Raised, and Slaughtered in the U.S).

Slaughtered Vs. Harvested

Prior Rule: permits the term "harvested" to be used in lieu of "slaughtered".

Final Rule: Maintains the same flexibility as current law.

Chicken Muscle Cuts of Covered Commodities "Born" vs. "Hatched"

Prior Rule define "born" as "hatched" from the egg.

Final Rule: the origin designations for chicken muscle cut covered commodities may use "hatched" in lieu of "born".

Labeling Covered Commodities with Multiple Country Origin

Prior Rule: Animals with different country origins are labeled "Product of U.S. and Country X"

Final Rule: Labels would be "Born in Country X, Raised in Country Y, Slaughtered in Country Z).

1.)   The agency is not requiring the country of birth to be listed again as a country in which the animal was also raised. (Ex. Born in Country X, Raised and Slaughtered in the U.S.)

2.)   In circumstances where animal was born and raised in U.S., raised in another country, then raised and slaughtered in the U.S., label must annotate all steps. (Ex, Born and Raised in the U.S, Raised in Country X, Slaughtered in the U.S.)

Immediate Slaughter

Prior Rule: Animals shipped to U.S. for immediate slaughter must be labeled "Product of Country X and the U.S.)

Final Rule: Production steps need to be included (Ex. Born and Raised in Country X, Slaughtered in U.S.)           

Commingling (applies when animals born, raised, and slaughtered in the U.S. are commingled with other commodities from animals raised and slaughtered in U.S.)

Prior Rule: Allows for commingling of different origins. For example (Product of the U.S., Country X, and (as applicable), Country Y).

Final Rule: Eliminate allowance of commingling of different origins.

Labeling Imported Muscle Cut Covered Commodities

Prior Rule: Imported muscle cut covered commodities retain origin as declared by U.S. Customs and Border Protection at time of entrance of U.S. (Product of Country X) through retail sale.

Final Rule: Labeling requirement remains unchanged, however, text has been restructured by the agency "the origin declaration may include more specific location information related to production steps (Example: born, raised, and slaughtered) provided records to substantiate the claims are maintained and the claim is consistent with the other applicable Federal legal requirements".

Signage/Labels

Prior Rule: allows for a variety of ways that the origin information can be provided (place cards, signs, labels, stickers, etc.) Some retail establishments have put COOL signage above relevant meat cases in lieu of or in addition to providing information on labels of each package of meat.

Final Rule: Agency will continue to allow notification requirements be met by using signs or place cards. (Ex. For meat derived from cattle born in Canada and raised and slaughter in the U.S. the signage could read "Beef is from animals born in Canada, Raised and Slaughtered in the U.S.)

Abbreviations on Labels for Production Steps/Countries

Rule: In the interest of space on labels, abbreviations for the production steps are permitted as long as the information can be clearly understood by customers.

Production Steps Abbreviations 

(Ex. Customers would likely understand "brn" as meaning "born", "htched" as meaning "hatched", "raisd" as meaning "raised", "slghtrd" as meaning "slaughtered", and "hrvstd" as meaning "harvested").

Country Abbreviations

Abbreviations permitted by Customs and Border Protection such as U.S. for United States and U.K the United Kingdom are permitted.

For additional information call (703) 516-0700 or email:

Tom Wenning, Executive Vice President & General Counsel

Greg Ferrara, Vice President, Public Affairs

Kailee Tkacz, Manager, Government Affairs





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