C.O.O.L is in Effect

The Final Rule is now in effect for muscle cuts of meats, seafood, nuts, ginseng, etc. Remember to review the latest changes, and if you are still having trouble figuring out how to properly label your cases, the USDA has a handy chart.

KSNT is already reporting the negative side effects:

“I happened to notice the Mexico on there and I put it down, I wasn't going to buy it,” customer Janice Cramer said.

The law is designed to give you a better idea of where your food comes from, but Apple Market manager Roger Flenniken says its just caused more confusion.

“Most of the beef in the is raised, fed and slaughtered here in the United States even though some of it may be born in a foreign country,” Flenniken said.

The Kansas Livestock Association is warning of new prices to go along with those new labels. They say now processors have to keep records of every place animal parts have been, which can be costly.

The Final COOL Rule

(A brief refreshed on what COOL is from And Now U Know)

On January 15th, the USDA published the final rule that cements the Country of Origin Labeling Law permanently into the food industry. Changes in the law from the interim final rule include an allowance for visual animal inspections from producers, who can then sign an affidavit stating that if they do not see any foreign markings on the animal, can declare the animal to be of US origin. There is also an updated list of what country name abbreviations are acceptable. If you would like to see an entire list of the changes, the AMS has a handy PDF file here.

Some critics are still confusing the COOL Law with food safety, despite the USDA stating time and time again that food safety has nothing to do with COOL. The Seattle PI even brought in a food safety expert to bash the rule:

"Given the recent scandals about the safety of imported food, it is unacceptable that the rule was approved with an overly broad definition for which foods are 'processed,'" says Wenonah Hauter, executive director of Food and Water Watch, a national consumer organization.

In case you need a refresher course, here is the United Fresh Produce Association SVP of Public Policy in an interview with the NSF discussing COOL:

Just as it is important to understand what COOL is, it is important to know what it is not. COOL is NOT a food safety law. Produce can be grown safely in countries around the world, or it can be grown without regard to good agricultural and handling practices. That is not dependent upon a sticker or a label, but upon the commitment of the persons handling that product throughout the distribution chain.

Reaction to COOL, even for those who actually understand the purpose of the law, has been mixed at best. Canada has decided to hold their WTO complaint in light of the changes to the final rule. Their Agricultural Minister Gerry Ritz told reporters:

The new standard "recognizes the reality of the integrated North American livestock industry," by allowing for combined US-Canada labeling, he said of the changes made public earlier this week.

But Nataional Farmers Union President Tom Buis is against the changes to the final rule for those very reasons, stating:

The final rule still contains a loophole that would allow meat packers to use a multiple-countries, or NAFTA, label rather than labeling U.S. products as products of the United States,” he said. “This is misleading to consumers. The intent was to provide country-of-origin labeling, not trade-agreement origin of labeling. If a product is exclusively born, raised and processed in the United States it should be labeled as such.

Drovers.com has more on the industry reactions to the new law in their article.

Regardless of what side of the fence you stand on, the rule goes into effect on March 16th, and fines for not complying are $1,000.00 per infraction. You can read the final rule at the AMS website here.

Winners & Losers of 2008

This year was filled with a lot of grim news for the food industry, as oil prices and a recession caused prices to soar and consumers to spend less. Not everyone was hurt by the economy, however some major players will either not be seen again in 2009, or will have to make some drastic changes to survive. Here is part one of a look at who came out on top and who struggled throughout the year. We will have more later this week, so check back!

Winner: Mc Donald's
The Motley Fool reported that MCDonald's profits continued to increase, and people dined less ion sit down restaurants and opted for their value menu instead.

McDonald's has blown past analysts' expectations again and again. This outperformance has been going on for so long it's difficult to remember way back when McDonald's was in dire need of a turnaround.

Loser: Local Restaurants

The papers are filled with the eulogies of favorite eateries. Portlanders will miss chains such as Chili's, but will also lament the closing of restaurants that helped to make Portland a national "foodie" city such as Lucier and D.F. The Oregonian reports:

Observers can't remember a worse year for Portland restaurants. In the first two months of 2008, seven restaurants closed, four as part of the implosion of the overextended N.W. Hayden Enterprises. The year ends with the fall of Lucier -- the $4 million South Waterfront showcase -- ringing in our ears. In between, more than 20 Portland restaurants shut their doors.

Winner: The Country Of Origin Labeling Law

It only took six years and multiple delays, but 2008 finally saw the roll out of the C.O.O.L law, which will allow consumers to know where their meat and produce has traveled to on it's way to the grocery store. While detractors condemned the law for being full of loopholes and a hassle for the industry, threats of fines from the USDA prompted producers, distributors, and retailers to follow suit instead of pushing back the implementation for another few years.

Loser: The Country of Origin Labeling Law

The controversial law, which will do nothing to help food safety and recall issues, was seen by some as a way for the US to sell more product over other countries. The end of 2008 showed us what might be just the beginnings of fall out from other nations; Mexico barred imports from major meat processing plants. Forbes has more:

Meat industry sources said Mexico may be striking back at the U.S. country-of-origin labeling law for fresh beef and pork, which went into effect earlier this year. "That is the only reason that we could see for Mexico doing this," said Allendale analyst Rich Nelson, as one wasn't provided.

Winner: Hormel

Not only did they just win 2008 Food Processor of the Year, Hormel is seeing as an investor's dream in this turbulent climate. The Motley Fool rated it as one of the four stocks that will shine in the market, and even those across the pond are noticing that Americans are eating Spam ahain. The UK Times Online has more:

They have shot up by more than 10 per cent in the past three months and the Hormel Foods Corporation has had to introduce a double shift at its factory in Austin, Minnesota, seven days a week to keep up with demand.

Loser: The Chicken Industry

2008 saw industry gians Pilgrim's Pride file for bankrupcy, after reporting huge losses and a losing battle with meeting creditor deadlines. Their CEO resigned two weeks ago as they struggled to reorganize, and the future of the company is uncertain. Tyson's chicken division suffered losses as well, and on December 17th they signed an agreement with creditors essentially putting up all of their assets for collateral (via Forbes). Let's hope that works out for them.

What we learned at the C.O.O.L Informational Session:

Pac Foods had a representative in Los Angeles, CA for the October 9th Country of Origin Labeling Informational Session. About 35 people attended the conference, and many were eager to have their questions answered by Craig Morris, USDA Deputy Administrator. Here is a breakdown of some of the questions that were on everyone's mind:

• Anything produced before Sept. 30^th does not need COOL labeling. One attendee noted that her customer was asking for the information on product prior to the cut off date, to which the speaker replied that a business will have to work with the customer to give them what they require. Dr. Morris also mentioned that the customer has a right to ask for more than is required by C.O.O.L law- meaning just because suppliers are stamping boxes with the country of origin, doesn't mean customers cannot requesrt it also show up on the recieving paperwork.
  
• Speaking of that receiving paperwork, if only the boxes for your product come stamped, be prepared to get out the camera or call your supplier; simply writing down what you see on the box is not sufficient recording for C.O.O.L. You need to keep either the box, photo, or paperwork from the supplier for at least a year.
• Beyond the customer requiring more paperwork, some at the session reported that they were being contacted for 3rd party audits to ensure they were complying with C.O.O.L. Dr. Morris stated that the USDA does not train 3rd party audit agencies, but that the customer has the right to request the audits.
  
• What you tell your customer has to match what your supplier told you. You can't simply list a dozen countries on your sign or invoice and hope you included the right country of origin for that product. Also, if you are listing something of mixed origin, and you know the product has only come from one country for over 60 days, you are in violation of C.O.O.L law.
• There was a lot of discussion on what "significantly altering" meat to make it exempt means. The speaker gave an example that just placing salmon on ceder does not change it, but blackening it with spices would exempt it from C.O.O.L. We also learned that simply injecting meats with sodium phosphates, even though they are called marinated, does not make them exempt.
  
• C.O.O.L is a marketing law- not a food safety law.
• After three years of the C.O.O.L fish & shellfish program being active, they have never issued a fine.
  

Overall, the people from the USDA were very helpful in answering questions, although it was clear that some people are very frustrated with the new laws. In a few weeks, PacFoods will post audio from the session so readers can hear the presentation in its entirety.

Something the AMS representatives wanted to emphasize was that the next six months are a learning time for everyone, and that there is no "play book" for the auditers yet. If you have questions or need guidance, writing to cool@usda.gov will get you a prompt response and some help. They also encouraged sending in PDF files with examples pertaining to your questions.

You can read more about the C.O.O.L program at the AMS website.

COOL is Here.

With the Country of Origin Labeling Law going into effect this week, there is confusion over interpreting the law, how exactly to comply, and where to find the correct information. This week we will focus on some of the new information coming out as the deadline approaches.

The Arizona Daily Star has a great refresher course of the law and how it will affect consumers and wholesalers alike. You can also read our previous post, Are You Ready for COOL? for the fundamentals of the labeling law.

Even though they have had over six years to fix the matter, people are finding loopholes within the law and lawmakers are expected to address them in the next few days. The Alexandria Echo Press elaborates:

The farm bill language explicitly states exclusively born, raised and processed U.S. animals cannot be used in the multiple country category (category 2). This loophole allows packers to use the label intended to be for U.S.-born, raised and processed animals on products that are mixed with animals from other countries.

The Madison Daily Leader continues:

The COOL start-up will not take place without some last-minute concerns expressed by 31 U.S. senators, including Sen. Tim Johnson, D-S.D., who issued a press release on Thursday. The senators asked Agriculture Secretary Ed Schafer to review the department's COOL policies and correct some possible loopholes in the labeling program.

The 31 senators asked Schafer to revisit several COOL policies, starting first with a USDA rule that could allow meat packers and processors to combine U.S. meat with meat from animals that were produced in foreign countries. The bipartisan group of senators was concerned that processors could still label the product as U.S.-produced.

Despite the attempt to fix the loopholes, some argue that the new law does not go far enough. RedGreenandBlue.org presented their list of five flaws in the COOL law. Number one on the list was concern over pet food:

The law does not apply to pet food. In 2007, contaminated gluten and rice protein from China was used to make pet food, resulting in the death of thousands of dogs and cats across America. The food was also used to feed pigs, chickens, and farmed fish which entered the human food supply, but no illnesses were reported. The same pet food would be exempt from the new labeling because only the ingredients were imported, not the final product. Mixtures do not apply under the law— not even fruit salad.

At PacFoods, we have spent the past few weeks reading ourselves for the new law. Here are our top three choices for the best places to find information:

1) The AMS Powerpoint presentation (clicking this link will download the presenation directly onto your computer) on the new law is a quick, easy to navigate presentation that strips the confusing legal jargon from the law and makes it easy to understand.

2) Write the USDA directly at COOL@usda.gov. As a food distributor, it was important to know how the law affected our business. The response time was under a week, and they were able to clearly answer our questions.

3) The Frequently Asked Questions PDFs on the AMS website are updated often and also clearly break down the rules in understandable terms.

Are you ready for COOL?

COOL is the country of origin labeling law that was enacted in 2002, but delayed repeatedly, until the 2008 Farm Bill expanded the categories of food that needed to be labeled. The final date was set for mandatory implementation on September 30th of this year. From NewswireToday.com:

The Country of Origin Labeling law (COOL) will become effective on September 30, 2008. All Cool covered commodity, livestock, produce, fowl, fish, shellfish, nuts and peanuts will have a means of traceability records for the AMS USDA COOL Law. Retailers have to provide to consumers the country of origin, by a label on the package or be fined $1000.00 per item. These retail markets will not purchase products which are not compliant with the COOL law, and they can audit your records if you are producer/grower or a packer-shipper. Any person engaged in the business of supplying a covered commodity to a retailer, whether directly or indirectly, must maintain records to establish and identify the immediate previous source in the food chain.

If you weren't confused already, they also just threw in one more rule. Meat AMI explains:

The U.S. Department of Agriculture's Food Safety and Inspection Service (FSIS) has issued an interim final rule (IFR) allowing for generic approval of changes to meat and poultry product labeling necessitated by mandatory country of origin labeling (COOL). To be consistent with the COOL statute and the Agricultural Marketing Service (AMS) IFR published on August 1, 2008, the FSIS IFR also will become effective on September 30, 2008, and its provisions do not apply to covered commodities produced or packaged before September 30, 2008.

Because many meat and chicken products are covered commodities under COOL, FSIS is amending its regulations to 1) provide that adding country of origin labeling statements to comply with the AMS IFR will be considered to be generically approved and 2) require that a country of origin statement on the label of a meat or poultry product that is a covered commodity to be sold by a retailer must comply with the AMS’ interim final rule.

So how do you know if you need to be COOL ready, or if you are buying from a COOL compliant company? Where do you start? I suggest begenning at the scource: the AMS has very comprehensive training materials you can download directly from their site by clicking here, including training presentations, exams, and quizzes. They also have a lengthy but informative pdf of questions and answers you can find here.

Also in the works in a new site called countryoforiginlabel.org. While they do not have all of their information up yet, look to this site in the coming weeks for information and help understanding and implementing COOL.

Finally, The Cattle Network has a breakdown of the changes from the 2002 Farm Bill that will be part of the 2008 COOL program, including that differences in foods that are covered.

Further Reading:

Wisconsin Ag Connection on the Interin Final COOL rule.

Americans For Country of Origin Labeling

The Beef Association overview of COOL, including a timeline.