Agricultural News
The Numbers Don't Lie - K-State Economist Glynn Tonsor Says No Beef Demand Bump from COOL
Mon, 07 Oct 2019 08:20:45 CDT
There is a lot of discussion in the meat industry right now over Mandatory Country of Origin Labeling, or MCOOL, which some cattle producers and populist cattle industry groups are calling upon the government to reinstate. These proponents of MCOOL argue that during the period of time in which it was the law of the land, beef prices were comparatively higher than they are today. However, based on economic research conducted by himself and others, Kansas State University Extension Livestock Market Economist Dr. Glynn Tonsor says the evidence is stacked against them and their argument.
"The punchline of not just the work I did but other analyses on it was very unlikely there was a positive benefit/cost. Primarily," he said, "because we know there were costs to track and segregate cattle. In my assessment, there was no demand benefit during the period in which MCOOL was in place."
Bottom line, Tonsor says, the cost of MCOOL is quite obvious if you consider the facts. In conducting his research, Tonsor found that during the MCOOL era, demand for both beef and pork were lower, economically speaking and statistically. This is consistent with the research summarized in the 2015 USDA report to Congress. This conclusion has been supported with further evidence compiled in a post-MCOOL period study. This model indicates that domestic beef demand was only 2.7% lower during the post-MCOOL than in the pre-MCOOL period, which was calculated to be approximately 6.5% lower. Combined this suggests that beef demand has improved 3.8% since MCOOL ceased.
"So, was demand stronger during the MCOOL period? The answer is no, it was not," Tonsor remarked. "Beef demand and pork demand were lower during that period, so MCOOL did not increase demand."
Listen to Tonsor's complete economic analysis of the MCOOL and Post-MCOOL periods on today's Beef Buzz, with Radio Oklahoma Ag Network Farm Director Ron Hays. For more information on this topic, check out Tonsor's economic report on the subject, here, or continue reading about MCOOL's impact on the marketplace in a related article by clicking here.
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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