1. An Overview of Mandatory COOL (Country of Origin Labeling) Derrell S. Peel Livestock Marketing Specialist Oklahoma State University

2. Brief History of COOL Became law in the Farm Security and Rural Investment Act (2002 Farm Bill) (PL 107-171) – Amended Ag Marketing Act of 1946 FY 2004 Consolidated Appropriations Act (PL 108-199) delayed implementation of COOL until September 2006 for all covered commodities except fish and seafood. Mandatory COOL for fish and seafood implemented April, 2005. The Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations Act of 2006 (PL 109-97) further delayed implementation of mandatory COOL for covered commodities except fish and seafood until September 30, 2008. The Food, Conservation and Energy Act (2008 Farm Bill) modified COOL law. August 1, 2008: USDA published Interim Final Rule for implementation on September 30, 2008

3. Consumer Notification Required at Retail Country or countries of origin Label or notice must: – Be in English and legible – Not obscure other required information Administered by USDA Agricultural Marketing Service (AMS) Must be consistent with other applicable federal rules – Food and Drug Administration (FDA): food labeling – Food Safety Inspection Service (FSIS): meat labeling – U.S. Customs and Border Protection (CBP): labeling imported products

4. Commodities Subject to COOL Muscle cuts of beef, lamb, chicken, goat and pork Ground beef, lamb, chicken, goat and pork Wild & farm-raised fish & shellfish Fresh & frozen fruits & vegetables Raw peanuts, pecans & macadamia nuts Ginseng

5. Businesses Subject to COOL Retailers of covered commodities as defined by the Perishable Agricultural Commodities Act (PACA) of 1930. – Excludes small retailers (<$230,000/year invoice cost of perishable agricultural commodities) Suppliers of covered commodities must provide origin information to buyers

6. Exemptions to COOL Food Service Establishments – Restaurants, food stands, taverns, etc. – Delicatessens, salad bars, lunchrooms etc. inside retail establishments Processed foods – Products changed in character by cooking, drying, curing, smoking, etc. – Products combined with another covered commodity or substantive food item.

7. Implementation Timeline Mandatory final rules by September 30, 2008 6 month grace period for full compliance Retailers urged to begin phasing in the program immediately – Product produced before September 30, 2008 exempted

8. COOL Meat Origin Categories for Muscle Cuts AU.S. Origin “Product of U.S.” - Must be born, raised and slaughtered in the U.S. BMultiple Countries of Origin “Product of U.S., Country X (and Country Y)” - Meat from animals born, raised and/or slaughtered in the U.S. and not imported for immediate slaughter CImported for Immediate Slaughter “Product of Country X and U.S.” DImported Meat “Product of Country X” - Labeled per CBP designation of origin

9. Retailer and Supplier Use of Meat Origin Categories Retailers, packers and intermediary suppliers may include Category A product in a Category B label which includes all countries as applicable Retailers, packers and intermediary suppliers may commingle Category B and Category C product in a single label as “Product of Country X and U.S.”, with other countries as applicable

10. Ground Meat Labeling Label must include all actual or reasonably possible countries of origin, in any order Sources of raw material not in the processor’s inventory for more than 60 days is not “reasonably possible” and must be deleted from the label.

11. Recordkeeping: Retailers and Suppliers Must be legible May be hard copy or electronic Various forms of documentation acceptable – Records used in the normal course of business May be maintained in any location Must be made available to USDA representatives within 5 days if requested

12. Recordkeeping: Retailers Records of origin, supplier and identify of covered commodity must be maintained for one year with appropriate combinations of package labels, shipping container labels and supporting documentation.

13. Record-Keeping: Suppliers Suppliers includes growers, distributors, handlers, packers and processors Suppliers must make available information to the subsequent purchaser about the country(ies) of origin of the covered commodity. Suppliers must maintain records to establish and identify the immediate previous source (if applicable) and immediate subsequent recipient of a covered commodity for a period of one year from the date of the transaction.

14. Recordkeeping: Packers In the case of meat, packers are considered the supplier responsible for originating the origin declaration for meat. Packers must possess or have legal access to records that are necessary to substantiate the claim. A producer affidavit is acceptable as evidence of origin provided it is made by someone having first- hand knowledge of the origin of the animals and identifies the animals unique to the transaction.

15. Affidavit Statements Developed by industry; examples available from organizations 1.Continuous affidavit/declaration. – Allows producers to make a continuous origin affidavit, that would be kept on file by the market, stocker, feeder or slaughter plant, until revoked by the affidavit’s signer. 2.Supporting declaration for specific transactions – For use with a continuous affidavit on file, or as a “stand alone” affidavit/declaration related to a specific transaction. This language could be used on check-in sheets, invoices and/or other sales documents. 3.For sales to packers – Statement says the livestock supplier will maintain those records for one year from date of delivery of the livestock, and will make them available, as required by the COOL law.

16. Recordkeeping: Producers Congress limited record-keeping requirements to documents used “in the normal conduct of business” Animals born or imported before July 15, 2008 are considered in as U.S. origin Animals identified under NAIS or official animal identification program need no additional verification of origin

17. Cow-Calf Implications Be prepared to supply affidavits for animals sold – Record of buyer and/or sale date and location Need records to document normal course of business – Herd and calving records – Vaccinations and vaccine purchases – Feed purchases Important to document herd size and composition as of July 15, 2008 – Producers may be selling, for several years, brood animals that were grandfathered in on this date Maintain records on raised cows and bulls Request affidavits on purchased cows and bulls

18. Stocker/Feeder Implications Request affidavits for purchased animals – Record of seller and/or sale date and location Provide affidavits for sales groups – Record of buyer and/or sale date and location Commingled and resorted animals (with same origin) may be sold under a “consolidated” affidavit Animals need not be individually tracked as long as records document a balance between total purchases and sales Imported and domestic animals best segregated, with supporting records unless individual animal ID is used

19. Enforcement Legislative authority for enforcement given to the USDA Secretary; encouraged to partner with states with enforcement infrastructure 30 day period for retailers and suppliers to take necessary corrective action Civil penalty up to $1000 if no good-faith effort to comply, but only after notice and opportunity for hearing

20. U.S. Beef Industry Summary 2007 All Cattle and Calves, Jan 1, 200896.67 Million Head Calf Crop37.36 Million Head Steer and Heifer Slaughter (FI)27.49 Million Head Cow and Bull Slaughter (FI)6.23 Million Head Cattle Imports, Total Canada Mexico 2.49 Million Head 1.40 Million Head 1.09 Million Head Beef Production (FI)26.07 Billion Pounds Beef Imports3.05 Billion Pounds Beef Exports1.82 Billion Pounds