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Only meat raised in U.S. can get Product-of-USA label under new rule

March 6, 2023 Updated Mon., March 6, 2023 at 2:45 p.m.

 (Daniel Acker/Bloomberg)
(Daniel Acker/Bloomberg)
By Mike Dorning Bloomberg

The Biden administration is moving to stop the food industry from promoting meat from foreign animals as products of the U.S., closing a labeling loophole that has infuriated domestic ranchers and consumer advocates for years.

The Agriculture Department issued a proposed new regulation on Monday restricting “Product of the USA” labels on meat, poultry and eggs to animals born and raised in the U.S. Currently, beef and pork that is merely repackaged in the U.S. qualifies for such a label, according to the department.

President Joe Biden called for a reassessment of the labeling standard as part of a 2021 executive order targeting big business anti-competitive practices. Antitrust advocates argue misleading marketing claims disadvantage smaller companies by making it harder for them to distinguish their products while ranchers contend loose standards in meat labeling diminish the value of U.S.-raised cattle.

“Clearly, there’s a misconnection and a miscommunication between what consumers think the label means and what the label means today,” Agriculture Secretary Tom Vilsack said during an interview. “We need to be in line with consumer expectations if our labeling responsibility is to have any basis and any merit.”

A survey conducted for the USDA found more than half of shoppers erroneously believed meat labels claiming U.S. origin means the product comes from animals born and raised domestically. That may lead consumers to overpay for foreign meat: on average, shoppers said they were willing to pay 35% more for hamburger meat bearing the label and 32% more for steaks bearing the label, according to the survey.

Trustworthiness in food labeling is an increasing focus as surging grocery prices take up a larger share of families’ budgets and consumers concerned about climate change, nutrition and animal welfare seek greater transparency on the sources of their food and how it was raised.

A long-running fight over the labeling rules also is wrapped up in cattle producers grievances’ over the lopsided marketing power of the four giant companies that control 85% of the market for fed-beef cattle. Cattle producers petitioned the USDA to strengthen the standard in 2018.

The looser “Product of USA” standard has governed labeling since Congress voted in December 2015 to exempt beef and pork from mandatory country-of-origin labeling laws. Mexico and Canada successfully challenged the mandatory labeling law as a trade restriction on its cattle and hog producers before the World Trade Organization.

About 12% of all meat, poultry and egg products sold in the U.S. currently claim U.S. origin on their labels, the agriculture department estimates.

Vilsack said he didn’t think the proposed new regulation would run afoul of trade rules because it involves voluntary labels. Nor will it impose any undue burdens on meatpackers, he said.

“They don’t have to put the label on there,” Vilsack said. “But if they choose to put it on there, then they better be able establish that the animals were born, raised, slaughtered, processed in the U.S.”

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