Testimony of Phil
Howerton
U.S. Senate
Agriculture, Nutrition and Forestry Committee
Field Hearing on
Country-of-Origin Labeling Law
Joplin, Missouri –
April 22, 2003
Senator Talent, Representative Blunt and
distinguished guests. My name is Phil Howerton, a pork producer from Chilhowee,
Missouri, and I am here to testify on behalf of the Missouri Pork Association.
I want to thank you for holding this important field hearing on the troublesome
country-of-origin labeling law.
Missouri pork producers strongly oppose
mandatory country-of-origin meat labeling. We are in opposition because pork
producers at the farm level will have no way to recoup the additional costs of
mandatory country-of-origin meat labeling to their hog operations through
increased consumer prices at the retail level.
We do support a voluntary program
for those pork producers who establish a voluntary label that can gain a price
premium paid to them by willing consumers. The National Pork Producers Council,
our national trade association, is not aware of a single pork producer in the
U.S. that is participating in the current voluntary program. We believe that
this is evidence that the additional costs of participating in this program far
outweigh any benefit that may accrue to a participating pork producer.
Specifically, Missouri pork producers
oppose mandatory country-of-origin meat labeling because -- it will not
raise live hog prices long-term, it will add additional on-farm production costs
to hog operations, it will reduce U.S. pork exports globally, it will decrease
domestic U.S. pork consumption, and it provides an unfair economic advantage for
chicken and turkey products, to name a few. Let me embellish further each of
five these points.
5 Reasons to Oppose MCOOL
(1)
MCOOL will not raise live hog prices and
could result in lower hog prices due to the law’s requirement of extensive
record keeping, segregation and tracking of imported animals by producers and
packers. Given the lack of research evidence of consumer interest in country
-of -origin labeling for pork, the increased packer, processor, retailer and
USDA costs associated with labeling will be passed back to producers in the form
of lower hog prices.
(2)
MCOOL will add production costs to my hog operation
in order to meet the burdensome “verifiable record keeping audit trail” standard
set in the law. It appears to us that any certification and audit system must
have at least three components-- a detailed records system, legal documents to
guarantee origin and the existence of records, and third-party audits of these
records. All of these impose direct costs on producers, not to mentions
potential liability for non-compliance.
(3)
MCOOL will reduce U.S. pork exports. An economic
analysis of the MCOOL program, performed by economists for the U.S. pork
industry and Iowa State University, concluded that by the year 2010, U.S. pork
exports could be 50 percent lower than they would be without a labeling
program. This is because Canada, which currently supplies 5.7 million of live
hogs to the U.S., would be forced to process these hogs in Canada. Canada’s
pork output would increase and, since Canadian consumption will not grow by
much, this pork would compete directly with U.S. pork both inside the U.S. and
in the common export markets. Lower U.S. exports would reduce the U.S. pork
industry’s value-adding effect for corn and soybean, thus impacting all of the
U.S. agriculture. The U.S. will likely once again become a net importer of
pork.
(4)
MCOOL will cause a reduction in domestic pork
consumption. According to the same study, a full trace-back system implemented
under MCOOL will increase U.S. farm-level pork production costs by ten percent
or $10.22 per head. This is equivalent to a ten percent increase in the cost of
on-farm production or approximately $1.02 billion for the U.S. pork industry.
Assuming the ten percent increase in costs is passed on to the retail level,
U.S. consumers will likely demand seven percent less pork due to higher prices.
A presumably less costly certification and audit system will have a smaller but
still negative effect on U.S. consumption
(5)
MCOOL provides a significant economic advantage to
chicken and turkey products. Poultry is the main competitor of beef and pork in
the retail meat case and is exempt from MCOOL and thus will not face any
additional costs to the poultry chain.
More Questions Than It Answers
The flawed mandatory country-of-origin
meat labeling law also raises more questions than it answers. Here are two
questions that really trouble me.
1.
Why does MCOOL exempt chicken and turkey products
and the entire foodservice sector - restaurants, fast-food establishments,
lunchrooms, cafeterias, lounges, bars and food stands? Does Congress believe
that U.S. consumers only have the right to know where their pork, beef and lamb
come from, but not their chicken and turkey – and only when they eat at home,
not when they dine out?
2.
USDA’s MCOOL guidelines clearly have periodic
audits in mind when they require a verifiable record keeping audit trail. How
frequent and how in-depth will such audits be and who will pay for them?
Additionally, will legal affidavit requirements by packers be required of
producers for each load of hogs? Finally, what are the liability ramifications
of these requirements?
Summary
Senator Talent, it is becoming
increasingly clear, that mandatory country-of-origin meat labeling is going to
be very costly for pork producers. It is our belief that the additional costs,
including the liability issues of participating in this program far outweigh any
benefits that might accrue to pork producers at the farm level. Thus, the
Missouri Pork Association urges you to oppose mandatory country-of-origin meat
labeling due to the absence of value to the pork chain or consumers and
increased costs placed on pork producers. We believe the mandatory
country-of-origin meat labeling program should remain voluntary.
Thank you for allowing me to testify today
and I would be pleased to answer any questions.
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