Glynn Tonsor

(Ted) The 2014 Farm Bill required an analysis of the 2009 as well as the 2013 versions of MCOOL, Mandatory Country of Origin Labeling and that led to this study. So, ultimately USDA commissioned a team of economists, which is yours truly, Ted Schroeder as well as Joe Parcell, who’s at University of Missouri. So, the main distinction would have been, after the 2009 rule you would have had labels such as, Product of U.S. and Canada. And then after the 2013 we might have, Born in Canada, raised and slaughtered in the U.S. We estimate the 2009 rules impact on the beef industry was a loss of economic welfare of $8.07 billion, so we’ll just round it for our discussion, $8 billion and that’s over ten years. And then $1.3 billion, with a B to the pork industry. The actual law covers some pork products and some beef products that are produced, but not all. So, you’ve got exempt product and you’ve got covered product. Covered product you have to be in compliance on, exempt you don’t have to. So, you won’t find the same type of information on it. If I could really synthesize it, a product that goes through a restaurant chain does not have to be covered. So, you don’t necessarily have origin information if you go buy a steak at Longhorn Steakhouse for example. But if you go buy that exact same steak at your local Kroger grocery market, it’s going to carry this origin information as law. We estimate about 16 percent of total pork production is covered. Stated differently about 84 percent is not covered. And a third to 42 percent of beef production is covered, therefore over half is exempt. The reason that’s important is that the cost burden has to be offset by a demand increase by the minority of pounds being produced. But yet, in a live animal industry to comply with this, if you are a hog producer or a cow/calf producer or whatever on the live animal side, you’ve got a cost for the whole animal. Before we segregate products we go through these different channels. So, the numbers we come up with is the 2013 rule, again same exercise looking at how things would be impacted over the next ten years, was almost a $500 million dollar impact to the beef industry and a little over $400 million dollar to the pork industry. The consumer losses from the 2013 rule, we quantify at $378 million with an M for beef, and $428 million with an M for pork. Those again are smaller than the 2009 rule, for the same reason I’ll talk about on the production side is, we’re asking for incremental changes. But again, those same reasons you get those losses, is you have higher yet, retail prices, lower production in response to the higher cost so the consumer loses yet again, from those incremental changes

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