U.S. vows ‘crackdown’ on food labels

On Canada Day, the U.S. Federal Trade Commission made an announcement that could disrupt Canadian exports of meat and livestock to America.

The FTC said it will “crack down” on companies that break the rules for “Made in the USA” — a voluntary labelling program.

“Marketers making unqualified Made in USA claims on labels should be able to prove that their products are ‘all or virtually all’ made in the United States,” the FTC said. “(This rule) will enable the commission for the first time to seek civil penalties of up to $43,280 per violation of the rule…. While stiff penalties are not appropriate in every instance, they send a strong signal to would-be violators that they abuse the Made in USA label at their peril.”

For years, American cattle ranchers have asked the U.S. Congress and federal regulators to strengthen the Made in USA label.

Cattle producers and farmer organizations have complained that companies can put a Product of the USA label on a package of beef and other meat, even if the animal was born and raised in another country.

“That animal could be fed, born and actually even slaughtered in Canada. As long as it … is repackaged in the United States, it (could) be labelled as Product of the USA,” said Matt Perdue, government relations director with the North Dakota Farmers Union.

“A single processing step in the United States can earn that product the voluntary Product of USA label.”

The U.S. push to bolster the label is much bigger than livestock imports from Canada. Many cattle producers are frustrated by the absurdity of the labelling rules.

“It’s really criminal what they’re allowing right now,” said Walter Schweitzer, president of the Montana Farmers Union.

He noted that ground beef can be shipped from Brazil to the U.S. in a box. If that meat is “transferred from a box into a package” in America, it still qualifies for the Product of USA label.

“So even the sophisticated consumers, like Wendy’s restaurants… think they are selling Product of the USA when in reality they are selling beef and pork from God knows where.”

The National Farmers Union, the U.S. Cattlemen’s Association and others want to clarify the label so it applies only to livestock born, raised and processed in the U.S.

Following the FTC announcement, the U.S. Department of Agriculture also promised to make changes to the Made in USA label.

Agriculture secretary Tom Vilsack said the current Product of USA label on meat is not serving American farmers or consumers. Therefore, the USDA is initiating a review of the label.

“I am committed to ensuring that the Product of USA label reflects what a plain understanding of those terms means to U.S. consumers,” Vilsack said.

It will likely take months for the USDA to review the label, but its recommendations could affect cattle, hog and bison producers in Canada. That includes Manitoba hog producers who export piglets to the U.S. Midwest, Canadian beef exported to America from processing plants in Alberta and live bison from Saskatchewan sold to American buyers.

The Canadian Pork Council has been following potential changes to U.S. voluntary labelling rules. The council sees potential problems if a U.S. company reduces the price it’s willing to pay for Canadian pigs because of the Product of USA label.

“The worst case scenario is it artificially depresses the price just because they can do so,” said Gary Stordy, the pork council’s director of corporate and government affairs.

“They may just (decide) to discount the hogs.”

It’s also possible that a U.S. company may not follow or use the Made in USA voluntary label. In those cases, the FTC “crackdown” and potential changes to USDA rules won’t have an impact on Canadian exporters who supply meat or livestock to those companies. However, any changes could also become a trade barrier for Canadian exporters of cattle, pigs, bison, pork and beef.

“Ultimately … this could potentially disrupt the Canadian integrated market (for meat and livestock in North America),” Stordy said. “We are concerned about how it’s going to be interpreted.”