Do You Know Where Your Hamburger Was Made?

The hamburgers and steaks on the grill this past weekend were just as likely to have come from Namibia and Mexico as they were to have come from a Texas ranch. But you’d never know that. Just because it has a USDA sticker on it, doesn’t mean it’s local.

Over the last decade, the farm-to-table movement has grown throughout farm communities. Consumers in small towns often know where their livestock were born and raised. They like it that way. Still, even in those communities, unless the packaging is labeled with the name of the local farm, or specifically highlighted as locally raised and processed, then the average junior sirloin bought at a Walmart or an IGA probably was an import.

Seafood is almost always labeled as to where it was fished or harvested. But beef is – quite literally – a totally different animal. Want American beef? Chances are you’re not getting it. Order a TGIF bacon burger tonight? It was probably made in Mexico.

The U.S. imports around three billion pounds of beef each year from 20 different countries, and imports around two million heads of cattle each year from Canada and Mexico. More than any other multilateral free trade agreement, the USMCA and the old NAFTA, have weakened the United States’ leading agribusiness segment. Cash receipts from American ranches are higher than any other single commodity.

From today’s letter sent by 18 cattle rancher trade groups. This is volume. Pricing chart looks the same. Used by permission.

American manufacturers know this story well. No different than a tool manufacturer in Illinois, ranchers are competing globally. They face the same massive pricing pressures from multinationals. In this case, it is Tyson, Cargill, and Brazilian giants JBS and Marfrig that run about 80% of the meatpacking industry here.

While most of the U.S. livestock is consumed locally, a growing number of imports is putting pricing pressures on domestic ranchers who do not face the same phytosanitary measures as their counterparts in other countries.

The result: American cattle producers are being deprived of the opportunity to expand production, or even to remain profitable in the face of increasing domestic beef demand, increasing beef consumption, and increasing wholesale and retail beef prices. The money is going to the big four companies listed above.

What’s the Problem?

Congress passed a law in 2002 that called for country-of-origin labeling (COOL) for fresh fruits, vegetables, peanuts, macadamia nuts, pecans, ginseng, beef, pork, lamb, chicken and even goat meat. It wasn’t until 2009 that the law was implemented to require accurate labeling for beef and pork. When it did, Mexico and Canada filed a complaint with the World Trade Organization saying they were not cool with COOL; they called it discriminatory. The WTO ruled against the U.S., which went through the appeals process and lost. They either had to repeal country of origin labeling for beef or Mexico and Canada could retaliate with tariffs exceeding $1 billion on other items.

In June of 2015, the House of Representatives voted overwhelmingly to repeal COOL. The Senate agreed in December of that year. The USDA did not revise its regulation until March 2016 but enforced it immediately.

One of the three panelists who ruled against the U.S. was a Mexican attorney named Ricardo Ramirez Hernandez. So the case that was filed by Mexico was decided in the WTO by a Mexican attorney.  CPA sees this as a tainted decision.

The Trump administration was so angered by this that they refused to reseat Hernandez on the Appellate Body. That decision arguably made the U.S. go cold on the WTO since, citing problems with the judgments handed down by the Appellate Body as the reason Washington believes the WTO is broken.

The other problem is the push for climate change policies that have put a target on ranchers as sources of methane polluting the atmosphere.

“Some environmental movements want to eliminate animal agriculture and are using the climate change issue as a facilitator of their efforts,” said Bill Bullard, CEO of R-CALF USA, a trade association. All of the big beef processors are investing in plant-based proteins in the U.S., while increasingly importing animal proteins from abroad. Green and “net-zero” carbon in the U.S., outsourcing carbon and environmental risk to others. “It’s a major topic of discussion, but it is not the wolf at the door,” Bullard said. “The wolf at the door is a chronically dysfunctional marketplace that constitutes an oligopoly in the industry that limits the chance of producers to access the market.”

Who Wants Local Food? Almost Everyone.

When the WTO was forcing the U.S. to treat Mexican and Canadian bovines no different than they would an American one, some 90% of consumers were telling consumer advocacy groups that they preferred to have a country-of-origin label on meat.  That’s why Congress approved of it in the first place.

They were over-ruled by the WTO, and a handful of Canadian and Mexican ranchers, at the benefit of four multinationals who could now play American ranchers off of Mexican ones, and further afield – Brazilian and Uruguayan ones, too.

On Monday, 18 trade associations, including R-CALF USA and the minority-owned National Latino Farmers & Ranchers Trade Association, and the Oglala Sioux Livestock and Landowners Association, sent a letter to USTR Katherine Tai and Agriculture Secretary Tom Vilsack highlighting yet another import boom. The U.S. is currently going through a surge in imports for everything; add beef to the mix.

They said in the letter that at the beginning of the COVID-19 pandemic, U.S. cattle producers, with perishable, slaughter-ready cattle that needed to be marketed, could not get an offer for their cattle from beef packers for as long as seven weeks. It led to shortages. Instead, the multinational beef packers continued importing tens of thousands of head of live cattle from Canada, prompting R-CALF USA to first issue the warning that imports were displacing American ranchers’ access to their own domestic markets.

Issuing warnings do little for America’s cattle producers unless decision-makers respond, which has not yet been the case.

It is unclear if there is a determined, unwritten push on behalf of the big four multinationals – perhaps in reading the tea leaves in Washington – to retire American cattle ranching. In thinking that it is harmful to the environment, they assume beef imports from Mexico or Brazil are better stewards.

Last week, Tai mentioned the importance of the environment to trade policy. She singled out “illegal logging” and said “forests are our planet’s lungs.”  In guaranteeing more imports of beef, the U.S. is giving those practices more of an opportunity to sell into this market, a practice that simply does not occur here.