Where's the beef (from)?

Ranchers hail a law that would mandate country-of-origin labels by 2004. Some sellers and processors would prefer that consumers didn't know.

Cattle, and the meat they yield, may seem about as American as the cowboy. Indeed, the US Department of Agriculture seal of approval is embossed on much of the beef supermarkets sell.

But not even all USDA beef comes from US cattle. When Americans buy a package of ground beef - pound for pound the biggest seller in the beef aisle - it might include meat from cattle born, raised, and processed in Latin America, the South Pacific, and Canada.

The same diversity is found in steaks and other cuts of beef shipped to the US from around the world. Overall, about 20 percent of beef sold in the US comes from cattle born outside US borders.

Beef and food imports in general are nothing new. But at a time of rising concern over food security, and international conflicts prompting some consumers to "buy American," public demand is growing for information about where food originates.

"I think there's increasing interest among a lot of people in where the [food] they buy comes from," says Art Jaeger, associate director of the Consumer Federation of America.

To that end, Congress last year passed a law requiring that, by 2004, all beef, lamb, pork, farm-raised fish, fruits, and vegetables sold in the US include a label listing the country where the food originated.

The current row among cattlemen, meat packers, and retailers over the measure shows the ripple effects of a bid to provide consumers with an additional piece of information about a product.

The US ranchers' lament

When Judy Easterday discusses the problems American ranchers face, she recalls an incident outside a Boise, Idaho, packing plant.

About five years ago, Mrs. Easterday and her husband, Norman, had to wait an hour on the side of the road before they could unload their cattle at IBP's Boise factory. The Easterdays, who have been shipping cattle for 20 years, say they are patient people. But they were annoyed by the reason for their wait: About 10 trucks packed with Canadian cattle had arrived at the plant first

Now, she says, more and more Canadian cattle trucks deliver to Boise, making the wait even longer. "We have to wait, and we're all getting paid less for our better beef," says Judy.

Americans ranchers are upset with how easily foreign beef gets into the US. They argue that government regulations hold them to a higher standard than their foreign competitors.

The result: Their profit margins are shrinking.

"We cannot compete with countries who can sell cattle for cheaper than what it costs us to produce them," says Margine Eiguren, who runs Eiguren Family Ranch in Jordan Valley, Ore.

Ranchers believe the country-of-origin label may be their best tool to win over US consumers.

"Right now, consumers are being led to believe that the meat is all from the USA, when in fact they don't have a clue," says Ms. Eiguren.

In fact, much of the meat consumers buy originates in Australia, Canada, and New Zealand. Last year, the three nations combined sold more than 2.3 billion pounds of beef to the US. Other countries that exported meat to the US in 2002: Argentina, Brazil, Costa Rica, Honduras, Mexico, Nicaragua, and Uruguay.

A huge number of live cattle from Canada and Mexico also pass through US borders. In 1980, the US imported 700,000 head of cattle. By 2000, the number had jumped to 2.2 million.

Foreign ranchers sell them to US feedlots and meat processors at much higher prices than they would receive in their own countries.

Meat processors, which prepare the beef and ship it to retailers, benefit enormously from the system. Because the cost of raising cattle in Uruguay, for example, is much less than in the US, Uruguayan ranchers can sell meat at more competitive prices.

But once US processors buy the meat, they are not obliged to tell consumers where it originated. They can also sell it for the same price as typically more expensive American beef.

The country of origin of the meat used in ground beef is similarly disregarded - and more complex. Frozen boxes of trimmings of facial meat, among the cuts used to make ground beef, are traded as a commodity on the global market.

That allows US packers to acquire the meat at the lowest possible price. As a result, packers might buy most of their trimmings from one country one day, and nothing from that country the next. The loose structure makes it impractical for meat packers to keep track of country of origin. The end result: Packages of ground beef come from a veritable United Nations of beef exporters.

"This process is [undertaken] in order to get the best possible price to consumers," says Janet Riley, spokeswoman for the American Meat Institute.

But ranchers believe many consumers would be distressed by all the meat-mixing. Right now, they argue, the USDA grade stamp falsely leads many to believe that the beef is home grown.

"When they put the USDA stamp on it, consumers think this is US beef," says Korley Sears, who runs Ainsworth Feedyards in Ainsworth, Neb.

Under the new labeling law, all beef will be stamped with a label that discloses if the cattle used to produce the beef were born, raised, or slaughtered outside the US. A package of ground beef, for example, might include a label that reads "born, raised in Canada, processed in US"; or "born in Mexico, raised in US, processed in US"; or "born, raised, and processed in New Zealand."

Supporters of the new law believe the labels will make it harder for meat retailers to sell mixed and foreign-grown beef at the same price as beef from cattle raised entirely in the US.

But critics of the labels argue that consumers may not want the service if it means paying extra for food.

Overall, the USDA estimates the labeling program will cost $1.9 billion, which, if passed on to consumers, would translate to about 40 cents per week in added beef costs for the average American household.

"In many ways, consumers could end up paying more and end up feeling very confused about the labels," says Ms. Riley.

The new label program will require meat processors to reconfigure their factories and warehouses.

In addition, retailers will have to change their labeling machines and storage procedures. Those who don't face fines of $10,000.

"A lot of family-owned businesses that don't have resources to investigate the regulation could receive most of the penalties," says Tom Wenning, general counsel for the National Grocers Association.

The government currently is holding regional meetings to discuss the merits of the labeling law.

Secretary of Agriculture Ann Veneman, however, has made statements indicating the law could be repealed by Congress because of the financial burdens it places on retailers.

An ambivalence about origin?

Whether the labels appear on beef and other products in 2004 may depend largely on whether Congress perceives that consumers want the labels.

Opponents of the program say consumers are indifferent to country of origin as a general rule. "I think that consumers look to buy according to price and the grade of beef, not the nation that it comes from," says Mr. Wenning.

In fact, some consumers might prefer foreign beef. US beef is shunned in some countries because of health issues surrounding the use of growth hormones and antibiotics by US ranchers.

Still, history indicates there may be ambivalence. Studies show that American consumers rarely buy clothing, for example, based on the item's country of origin, which is labeled by law.

"My sense is that it hasn't made a bit of difference in consumers' choices," says Pamela Ulrich, a professor of apparel and textiles at Auburn University.

Other experts suggest retailers should voluntarily offer country-of-origin labels to see if consumers are willing to pay more for the added cost.

"Let's let it sort itself out in the meat case," says Fred Ray, a meat specialist at the University of Oklahoma in Stillwater.

But some consumer advocates believe retailers will not voluntarily label meat because of the up-front costs. They say the meat industry has been slow to reform in the past. Yet, these advocates add, consumers have welcomed past labeling measures.

"Whenever a new requirement is imposed, they tend to resist it," says Mr. Jaeger. "They even resisted the nutrition-facts label about 10 years ago, and that was much more complicated and onerous for them."

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