MCOOL could add billions in beef and pork supply chain costs

If Mandatory Country of Origin Labeling (mCOOL) for beef and pork was reinstated, it would cost the US meat supply chain $1 billion annually, according to a new economic analysis prepared by Decision Innovation Solutions for the Meat Institute.

“This study proves there are real and significant costs to mCOOL which would raise the price of meat for consumers already struggling to afford groceries,” said Julie Anna Potts, president and chief executive officer of the Meat Institute. “mCOOL would burden both packers and livestock producers with added costs at a time when beef packers are losing money due to the smallest herd size in 75 years causing record high prices for cattle.”

The new study, titled, The Economic Impact of mCOOL on the Beef and Pork Value Chains, updates previous research from the industry and the US Department of Agriculture by using current production, trade, consumption and market data to evaluate the potential impacts of reinstating the 2013 mCOOL requirements, the Meat Institute said.

Compliance costs associated with tracking, recordkeeping, product segregation, labeling, and verification for mCOOL would result in significant added costs for the beef and pork value chains. In the first year alone, it is estimated to increase costs by $1.02 billion, including $721 million for beef and $296 million for pork.

Over time, those costs are estimated to grow, reaching $4.8 billion in five years and $10.1 billion in 10 years.

These compliance costs would likely get passed through the supply chain, reflected in higher food prices for consumers, who are already feeling the weight of inflation on their groceries. Decision Innovation Solutions estimates consumers would pay $835 million more annually for beef purchases and $284 million more for pork purchases.

The Meat Institute said packers, processors and retailers would shoulder the greatest compliance burden as they would be responsible for tracking animal origin information, maintaining separate inventories, segregating products, modifying production schedules, updating labels and documenting compliance. Retail beef compliance costs alone could reach nearly $488 million in the first year and exceed $5 billion over ten years under one of the modeled scenarios in the report.