Where’s your beef from? Biden order seeks to boost US ranchers, clarify for consumers

WASHINGTON — Where was your burger born?

The meat in your bun could have come from a cow raised on a Kansas farm. Or it could be from Australia, Canada or a handful of other countries.

Either way, you might find it in the grocery store labeled as a “Product of the USA” if the meat was processed at an American plant. In the case of ground beef, cuts from other countries might be mixed with American beef and labeled as a domestic product after processing.

But that’s likely to change after President Joe Biden last week directed the U.S. Department of Agriculture to consider adopting a rule to ensure that only meat that comes from animals born and raised in the U.S. can be labeled as a “Product of the USA.”

“This was a nice, welcomed surprise,” said Phil Perry, who owns and operates a cattle ranch in Oskaloosa in northeast Kansas, which typically has about 400 to 500 black angus cattle at any given time.

“It’s good to know that somebody has brought these issues to his attention. It’s good to see that maybe somebody in our industry is getting back there and making tracks.”

The provision on meat labeling was part of a larger executive order by Biden intended to help U.S. companies compete internationally and to challenge conglomeration domestically.

The executive order issued Friday by Biden will affect a range of industries, including aerospace and pharmaceuticals, but the sections on meat could have a significant impact for Kansas and Missouri, two of the top beef-producing states.

While the bulk of meat consumed in the U.S. comes from American farms, Biden’s administration argued that imported meat that can be marketed as American under current rules creates unfair competition for U.S. ranchers.

“Something I learned that I found a little outrageous— we’ll see what you all think— is that under current labeling rules, most grass-fed beef labeled ‘Product of USA’ is actually raised and slaughtered abroad, and then imported to the U.S. for processing,” White House Press Secretary Jen Psaki said last week.

“The President and the USDA believe it is unfair for domestic farmers and ranchers to have to compete with foreign companies that are misleading consumers.”

‘BORN, RAISED, AND PROCESSED IN THE USA’

The push to tighten the rules on labeling comes after several years of advocacy by ranchers on the issue.

Biden’s order doesn’t immediately enact new rules but instructs the USDA to begin the process of drafting them. Ranchers say they want the labels to remain voluntary, but they also want to ensure accuracy.

“There’s tremendous pride in our members for the safe, wholesome product that they produce, but at the top of the list is providing accurate information… to consumers so they can make an informed decision about what they’re purchasing,” said Matt Teagarden, CEO of the Kansas Livestock Association.

“If it’s going to be used, it’s going to accurately reflect what’s in the package or on the bun in the case of a hamburger out at a restaurant,” Teagarden said, explaining that in some cases ground beef includes cuts from more than one country.

Mike Deering, the executive vice president of the Missouri Cattlemen’s Association, said in an email that his organization would be cautious until rules were finalized, but at “first glance, we are excited the Administration is paying attention to the realities of our industry.”

Ranching is a major industry in both Kansas and Missouri.

Beef cattle generated nearly $8.4 billion in farm income in Kansas in 2019, more than half of the state’s overall agricultural output and nearly 13 % of the cash receipts for cattle nationwide, according to USDA data.

In Missouri, beef cattle brought in nearly $1.9 billion in the same year, representing 20 % of the state’s agricultural output and its second biggest product behind soybeans. Hogs rank as Missouri’s fourth biggest agricultural product and accounted for nearly $930 million in the same year, according to the USDA.

But meat processing is also a major industry with a combined 64 beef plants and 53 pork plants in the two states, according to the White House. A 2020 report from the Kansas Department of Agriculture found that both cattle ranching and meat processing amounted to more than $8 billion industries in the state.

Kansas Republican Sen. Roger Marshall, a member of the Senate Agriculture Committee, said he supports efforts to enable American ranchers to distinguish their product on the shelves.

But he also wants to allow for the creation of other labels for processors.

“I believe multiple new voluntary labels such as ‘Processed in the USA’ and ‘Born, Raised, and Processed in the USA’ should be developed to help U.S. ranchers differentiate the wholesome, safe, and nutritious beef they raise,” Marshall said in a statement.

Cargill, one of the processing companies with plants in Kansas, declined to comment on the order’s impact to the industry.

Perry said he thinks the proposed labeling rule will give Kansas ranchers a marketing opportunity, but cautioned that he doubts it’s the issue at the top of most consumers’ minds.

“I ask people in the grocery store if they read the labels. Many of them don’t. They’re more concerned about the price,” Perry said.

Glynn Tonsor, a professor in the Department of Agricultural Economics at Kansas State University, said that if the USDA adopts a more restrictive labeling rule it could result in higher costs for consumers.

“Almost always, if you have additional governmental oversight and-or regulation that restrict private industry choices— that’s what’s on the table there— that almost always adds cost,” Tonsor said.

Congress passed a strict meat labeling rule in 2002 in response to fears of mad cow disease coming from imported beef, but it was repealed in 2016 after the World Trade Organization repeatedly ruled against the U.S. in trade disputes.

Tonsor said that the USDA should be careful crafting the rules to avoid running afoul of the WTO.

“My words of caution would be it needs to be kept in a voluntary ‘if you want to use it, you’ve got to be compliant’ space as opposed to getting really close to the old days of mandating everything’s labeled,” Tonsor said.

Kansas Republican Sen. Jerry Moran also said that the USDA must be careful not to violate trade agreements, which could harm beef exports abroad, as it takes steps to ensure more accurate labels domestically.

“Misleading labels undermine our cattle producers’ ability to generate new marketing opportunities for beef produced to meet consumer demand. It is important for USDA to ensure ‘Product of USA’ labeling standards are clear and accurate, while also avoiding violating our trade agreements and harming export markets for U.S. beef,” Moran said.

While the labeling change has been touted by the administration, Perry and Teagarden both pointed to another development as more significant: the administration order steering $500 million in federal dollars to expand the capacity of U.S. meat and poultry processing and another $150 million to aid small plants in weathering the COVID-19 pandemic.

The USDA said the investment was a key step in implementing Biden’s order to promote competition and foster a more resilient food supply chain.

“For beef producers, access to additional packing capacity would be highly supported. We’ve been through two years of disruptions,” Teagarden said, referring to a 2019 fire at a Tyson Foods beef plant in Holcomb, Kansas, and the pandemic, both of which severely diminished the state’s capacity for processing cattle.

MAKING IT EASIER FOR FARMERS TO WIN CLAIMS

The North American Meat Institute, a lobbying group which represents the processing companies, declined to comment on the proposed labeling change until the USDA crafts its rule.

But it criticized another portion of Biden’s order, which seeks to make it easier for farmers and ranchers to win claims under the Packers and Stockyards Act, a 1921 law which prohibits meat packers from engaging in unfair or deceptive practices.

The White House contends that the enforcement of the act was systematically weakened under former President Donald Trump’s administration and Biden’s order asks the USDA to reinforce an interpretation of the act that it is unnecessary for farmers to show industry-wide harm to prevail on a claim.

“President Biden’s executive order calling for USDA to change the Packers and Stockyards rules will have unintended consequences for consumers and producers,” North American Meat Institute President and CEO Julie Anna Potts said in a statement.

“Government intervention in the market will increase the cost of food for consumers at a time when many are still suffering from the economic consequences of the pandemic. These proposed changes will open the floodgates for litigation that will ultimately limit livestock producers’ ability to market their livestock as they choose.”

The administration argues that consolidation in the meatpacking industry has made it more difficult for ranchers to get a fair price for their cattle and the act provides a tool to rectify that.

Teagarden said the USDA pursued a similar interpretation under former President Barack Obama, but stopped short of implementation.

While the provision is intended to help individual ranchers prevail on claims, Teagarden said the Kansas Livestock Association is worried about the broader impact.

He warned that it could stifle innovation. Teagarden said that 30 years ago the price of cattle was determined also entirely by their weight, but now ranchers can improve the prices through feeding techniques and other methods that produce a higher quality product to respond to market needs.

Mary Hendrickson, a professor in the College of Agriculture, Food and Natural Resources at the University of Missouri-Columbia, said consolidation has made the food industry less resilient to handling disruptions.

“That is a hugely concerning issue for us as we face down climate change, social disruptions like pandemics, you name it and we don’t have enough resilience,” Hendrickson said. “So anything the administration can do to get us on the path to resilience by addressing some of the issues of consolidation and competition is a good thing.”