MCOOL

SwineCast 0638

• The World Trade Organization recently found the U.S. Country Of Origin Labeling law to not be fulfilling the stated objectives and impeding access to U.S. markets by our trading partners.  With two perspectives of the issue today, we hear from Kansas State Extension Livestock Economist Glynn Tonsor and Canadian economist Kevin Grier.

     The U.S. swine industry is about to be reshuffled in some extraordinary ways.  For the first time we are witnessing political ideas at work in the world and in this country which are gaining the upperhand in their attempt to slow down the natural execution of comparative advantage based on efficiency and market economics.  Since 1995 the US industry has enjoyed a steady and sometimes dizzying increase in total demand as net exports rose year after year.  This is a testament to the global effciency of the industry and its ability to deliver a consistent, safe and high quality product.  At the same time, the desire to slow down the expansion of the industry in the US has been building because of a long list of issues which have been slowing gaining political strength. 

     According to the USDA talking points released yesterday (1/12/2009) regarding the final estimates for implementing country of origin labeling:

1. The first year implementation costs for directly affected firms is estimated to be 2.629 billion dollars.

2. Costs per firm are estimated to be $370 for each producer, $48,219 for intermediaries, and $254,685 for each retailer.

3. The estimated cost in higher food prices and reduced food production in the tenth year after implementation is 211.9 million dollars.

     Now for the benefits expected:

     "The expected benefits from the implementation of this rule are difficult to quantify.  The Agency's conclusion remains unchanged, which is that the economic benefits will be small and will accrue mainly to those consumers who desire country of origin information."