The Government of Canada has formally responded to the U.S. Food Safety and Inspection Service's proposal to change its Product of U.S.A. labeling requirements.
The proposed rule changes stipulate an animal must be born, raised, and processed in the U.S. to carry the Product of U.S.A. label. Though voluntary, there are concerns in Canada that the rule has the capacity to become de-facto mandatory and would be significantly disruptive to the Canadian/U.S. protein industries.
In a formal letter dated June 9, the Government of Canada says that the proposal as written undermines the fully integrated $8 billion U.S./Canada protein supply chains. The country of origin label requirements for chicks and poults, pork and hogs, and cattle and beef will "discriminate" against Canadian product, the government says, and add significant inefficiencies throughout the system.
Ryder Lee, general manager of the Canadian Cattle Association, agrees, noting the cattle feeding, finishing, and processing business between Canada and the U.S. works well, and cattle and/or feed move to where it makes the most sense economically. Adding this layer of administration and segregation of supply chains adds costs without any benefits, he says.
U.S. producers and packers may be impacted, Lee says, especially for those who make the most of cost differences between the north and south.
The rule is currently at the proposal phase, and that's what's prompted formal comments from the Canadian government.
Lee says it's too soon to know if Canada would pursue some form of dispute resolution, as the final rule has not yet been agreed on and published.
