I firmly believe Montana farmers and ranchers care deeply about developing and growing consumer confidence and trust in the products we painstakingly raise. It’s a key goal in helping a growing urban demographic understand why we’re so passionate about our agricultural and rural lifestyles and to help them understand what goes into producing the food they eat.
Country of Origin Labeling (COOL) rules were one way Congress and the USDA tried to make it easier for consumers to decipher where their beef and pork products came from. However, COOL is a complex and contentious issue, especially among our trading partners, and these rules were repealed in 2015.
The repeal came after not one, not two, but three World Trade Organization (WTO) rulings against the United States’ labeling rules. The U.S. exhausted all appeal options to overturn the WTO rulings; yet the international trade community continually upheld WTO’s decisions. Had the U.S. continued COOL, the WTO authorized $1 billion in Canadian and Mexican retaliatory tariffs against American beef, pork and other U.S. commodities.
Montana Farm Bureau strongly supports a national COOL rule; however, we believe the rule has to be beneficial for U.S. livestock producers, which means not jeopardizing the integrity of trade partnerships.
During the 66th Montana Legislature, Farm Bureau opposed SB 206 carried by Sen. Al Olszewski of Kalispell. Proponents of this bill assert it is a ‘Montana COOL’ law. We disagree. SB 206 would require retail establishments—often times small, family owned businesses crucial to the fabric of rural Montana—to be responsible for COOL by hanging signs in their stores that identified the origin of beef and pork products.
In theory, that doesn’t seem like such a far-fetched idea; however, when you consider grocery stores are the last stop before a product enters the consumer’s hands and that retailers have no control over whether or not their distributor provides origin information, it begins to sound more burdensome. Coupled with the fact that SB 206 included fines and potential jail time for noncompliance, this didn’t strike our organization as a legitimate solution to COOL.
Effective COOL rules must start at the top of the processing chain, not the bottom. This legislation wouldn’t successfully or economically reach the end goal of providing more information to consumers, nor can we guarantee increased demand for Montana beef and pork products.
Supporters would have you believe repeal of COOL in 2015 was responsible for the demise of record high cattle prices. That’s a very narrow, somewhat disingenuous claim. Declining cattle prices in 2015 were due to a combination of influences including the environment, industry trends and the trade climate.
The reasons we saw unprecedented highs in the cattle industry in 2014 and 2015 included higher grain prices that encouraged the conversion of pasture and hay ground into farming. At roughly the same time, a huge swath of the country experienced a record drought that exacerbated rapidly declining cattle numbers. Economics are driven by supply and demand. The cattle market is no exception, with herd numbers at all-time lows demand was outpacing supply and prices rose quickly.
Export markets were the final influence. Simple economics prove that when prices are high, we ramp up production to make hay while the sun shines—or maybe steaks in this case. A decline in U.S. exports was the final blow to cattle prices.
The culmination of all these factors resulted in a ‘perfect storm’ and the conditions were ripe for a price implosion, which is exactly what happened. There is no way that one factor was solely responsible for the monumental shift in cattle prices in 2015.
Knowing the complexities associated with this topic, Montana Farm Bureau could not in good conscience support SB 206 and submit small town grocery stores and family run businesses to further red tape and regulation.
Montana Farm Bureau worked with members of the Senate Agriculture, Livestock and Irrigation committee to reroute these efforts. The result was SJ 16, a resolution asking our Congressional Delegation to pursue effective, WTO-compliant COOL rules for beef and pork.
If Montana wants to be a leader in this conversation we need to put our best foot forward. That means rolling up our sleeves and navigating the long road of complexities posed by this topic, not slapping fines and regulations on Montana’s business owners.