Beef Industry Experts Don Close and Kent Bacus Explain Why Mandatory Labelling Isn't So "COOL" After AllMon, 17 Jun 2019 11:39:28 CDT
Most of the US cattle industry agrees that the Mandatory Country of Origin Labelling (MCOOL) laws that we previously had in place against cattle coming in from Mexico and Canada, was an overall fiasco - eventually ruled illegal by the World Trade Organization. However, there are still those groups that want MCOOL brought back. Don Close, vice president for food and agribusiness animal protein at Rabo Agrifinance, commented recently that if you look closely at the impact MCOOL had on the US beef market, you can begin to understand how truly disastrous it was.
“The initial discounts on Mexican feeder cattle to the US were as high as $150 a head. Cattle feeders were just bidding in absolute uncertainty. That paved the way for the segregation of those cattle at the feedyard,” Close said, explaining how this segregated system eventually manifested into increased costs to the processors. “At the end of the day, all that money was absorbed and just added cost. Nobody was a net winner. Everybody was a loser and we found over time, US consumers didn’t care. So, we added a lot of cost to the production process with no identified benefits.”
Not only did this policy prove to be a financial drain on the industry, it also motivated Mexican processors to invest in new infrastructure, taking advantage of lower priced domestic cattle that could be diverted to their own facilities. Essentially, this helped Mexico sharpen its competitive edge with the US. Close says had it not been for MCOOL, this never would have occurred. Kent Bacus, director of international markets and trade access for the National Cattlemen’s Beef Association, says he agrees with Close in calling MCOOL a failed government policy.
Bacus adds that MCOOL led to further consolidation of the industry and as a result, we have fewer packers bidding on cattle today, which means prices are not as strong as they once were. And in addition to encouraging the development of Mexico’s manufacturing sector, it did nothing to improve either food safety, consumer confidence nor producers’ bottom lines.
Click or tap the LISTEN BAR below to hear today’s Beef Buzz show for more insights from industry experts Don Close and Kent Bacus, with Radio Oklahoma Ag Network Farm Director Ron Hays.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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