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HUNTIN' DAYLIGHT -- JUST THE FACTS

by: Wes Ishmael

"Everyone in the industry must understand his or her responsibility for the safety, quality and image of the product that eventually reaches the consumer for a buying decision. The desire to avoid or assign blame for problems needs to be over-ridden by a desire to win customers. This requires a commitment to work together across sectors on issues that influence the consumer's view of the product we want him or her to buy. They don't really care who you would like to blame if your product doesn't meet their requirements."

Indeed. The above was one comment made by Paul Genho, manager of the beef division of the King Ranch, and his son, Michael, also from the King Ranch, during their presentation at the recent International Livestock Congress Beef Forum. The responsibility he alludes to here is one of the issues he believes individual producers must address, along with the industry collectively, in the name of profitability if we truly believe the consumer is the only real source of wealth to the industry and that beef must be produced as a consumer product rather than as a commodity. Other issues he mentioned include: product quality, product accountability, marketability, affordability, product availability and market accessibility.

More specifically, the Genhos describe it like this:

*      Quality-"While this has always been an imprecise term, we will use it here to reference several product factors that influence our customers' buying decisions. The consumer has demonstrated an unprecedented willingness to pay for beef products that satisfy her/his requirements for consistent tenderness, convenience, nutritional value and safety."

*      Accountability-"The marketplace, driven by the consumer, will place increasing demands on the industry to track the sources of its products and failure to respond is not, in my view, an option. This relates not only to product safety issues but to factors of eating quality as well. In order to be rewarded for superior performance, you must be willing to identify and measure your product."

*      Marketability-"With consumers, their enthusiasm for a product relies on a number of things beyond the quality of the product itself. The beef industry has taken steps toward improving the nomenclature describing beef products, but we need to continue working to improve packaging, preparation suggestions, case presentations, etc. to make the product appealing."

*      Affordability-"Beef has been and will likely remain a more expensive product, as viewed by consumers, than most other proteins. Consumers have shown they will pay more for what they perceive as a superior product, but we need to be diligent in delivering value in order to maintain the volumes moving through the system that will sustain growth."

*      Availability-"Sustained high performance and growth in the consumer market requires a predictably steady supply of quality product. Typical fluctuations in the beef industry's production cycles have caused concern among retailers and food service operators in the face of rising demand."

*      Accessibility-"Our ability to access markets around the world-and meet widely varying consumer demands in those locations-is essential to long-term profit opportunities for everyone in the beef industry. This is not just an issue for politicians and policy wonks to consider."

His description of responsibility, though, seems especially insightful given the past too many years of industry in-fighting, back-biting and zest for calling upon lawyers and legislators to make decisions for the industry, rather than coming together in the spirit of meaningful debate to work out what's best for the industry rather than for a few vocal folks with an axe to grind.

Reasoning With Tree Stumps

Of course, getting along presupposes that the folks involved in a debate, while disagreeing on the needed practice and its related outcomes, will both enter the debate with good will, common sense and at least a little innate intelligence. In other words, when it's commonly accepted that the sky is blue, there is no sense in debating someone who claims it's lemon yellow.

A recent example is the travesty that is called Country of Origin Labeling (COOL). Never mind whether you agreed with the law or not, now that it is law, with promulgation of it mandated by September 30, 2004, a majority of producers, producer organizations and USDA itself-which is charged with administering the law created in the most recent farm bill-are immersed in figuring out how to comply with the law, what the cost will be, what the impact of both compliance and non-compliance will likely be.

For instance, forget the actual cost of the program; consider the potential economic impact of losing half the domestic market for beef if the supply chain doesn't comply. If the final law is similar to the current voluntary one it would be illegal to sell beef at retail without a COOL label.

Those aren't scare tactics as the Livestock Marketing Association (LMA) and R-CALF recently proclaimed in a joint statement. That's simply recognizing the law as it is written and trying to figure out its likely consequences.

Barry Carpenter, director of the livestock and seed division of USDA's Agricultural Marketing Service was recently quoted by FEEDSTUFFS magazine as saying that COOL compliance will require traceability and documentation back to the farm or ranch of origin. That seems straightforward enough.

In fact, the federal law outlined in the Federal Register (www.usda.gov) says, "...According to the law, under the mandatory labeling program, retailers (food service is excluded) are required to provide information to consumers indicating the country of origin of the covered commodity...According to the law, under the mandatory labeling program, suppliers are required to provide information to retailers indicating the country of origin of the covered commodity (beef is a covered commodity)...To have a meaningful program, retailers and their down-line suppliers will have to maintain a verifiable audit trail on covered commodities to substantiate country of origin labeling claims...The law also provides enforcement procedures for the mandatory labeling program that includes fines, civil penalties and cease and desist orders for retailers, packers and other persons for willful violations..."     

Incidentally, by the time you read this Washington insiders say the Food and Drug Administration (FDA) will have already proposed food product traceback regulations, not just for COOL-which they have no authority over-but also because of bio-terrorism concerns.

Yet, the first week of March R-CALF and LMA issued a joint press release that says in part, "Livestock producers must resist the onslaught of misinformation aimed at weakening their support for COOL...That misinformation includes packers demanding that producers initiate a record keeping system and third-party audits to verify the country of origin of their livestock; and widely exaggerated estimates of the cost of complying with COOL."

Hmmm...the retailers are mandated by law to have a verifiable audit trail for COOL in place by the time the laws becomes mandatory in 16 months-meaning cattle born this spring and weaned this fall need to be verifiable-so they're demanding their packer suppliers provide them with the information. The packers, in turn, are making the same demand of their feedlot suppliers. Logic says feedlots will begin making the same demands on their order buyers and feeder calf and cattle suppliers. All of this in response to all that we know for sure, which is the law as it reads today; a law by the way, that LMA and R-CALF speak in support of keeping as is.

There are 800,000 beef cow producers. About half of the beef produced in this country (retail beef) falls under the COOL law. Building an efficient system that cost-effectively allows full COOL traceability-where no such system currently exists-within 16 months is a tall order and may not even be possible. By law retailers must label beef with country of origin or else face penalties and fines, or simply not sell beef.

Scare tactics? Nope. This is the law, along with logical, sincere industry soul-searching trying to figure out how to deal with a law that so far seems unmanageable.

Yes, there are plenty of questions surrounding COOL. But as a law, it's just as real as our most rational assumptions concerning the law's consequences. The sky's blue. Claiming that it's another color, accusing other folks of having the audacity to recognize the obvious, doesn't change the color.

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