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USDA Cost Estimates Show That Mandatory Country-of-Origin Labeling for Meat Will Cost Billions Law Will Burden Meat Sector, Harm U.S. Economy Long-Term

Tuesday, October 28, 2003

(Attribute Statement to AMI President J. Patrick Boyle)

“Legend has it that Everett Dirksen once said, ‘A billion here, a billion there and pretty soon you are talking real money.’ Apparently, country-of-origin labeling advocates don’t know the value of real money as they support a mandatory labeling law that USDA now says could cost as much as $3.9 billion in the first year alone. Not only will this law be costly to the meat sector, USDA estimates indicate that it will cost the U.S. economy as a whole more than half a billion dollars a year.

Proponents of the law have long claimed consumers will pay more for meat products that carry country-of-origin labels. However, USDA indicates that it was unable to find any quantifiable evidence that consumers will pay more. USDA’s economic analysis places a price-tag of almost $2.4 billion on the meat industry.

USDA noted the competitive advantage that this law will give poultry processors, saying ‘While revenues to the suppliers of covered commodities fall, revenues to broiler and chicken suppliers increase…consumers will substitute chicken for beef and pork when their prices increase relative to the price of chicken. Consequently the increases in pork and beef prices cause consumer demand to shift toward chicken.’

No doubt, supporters of country-of-origin labeling will attack government economists and say USDA’s cost estimates are faulty and overstated. And they’ve claimed benefits, citing studies like one done by Colorado State University researchers which they claim says consumers will pay more for labels, even when the study's own researchers say – and USDA agrees – their findings have been misrepresented. It appears that country-of-origin proponents won’t let the facts get in the way of their myopic support of this misguided law.

If there were billions to be made through a country-of-origin labeling program, the meat industry would have done it already. Still, if there are people out there who believe that country-or-origin labeling stands to benefit them, then we say go for it. Implement a country-of-origin labeling program -- just do so voluntarily. But leave the rest of us out of your multi-billion dollar federal mandate.”

For more information contact:
Janet Riley
Senior VP, Public Affairs
Dan Murphy
Vice President, Public Affairs

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