This Is Not Processing a Dozen Head in a Locker Plant. And The Price Is Different, Too...
Steve Dittmer | AFF Sentinel
Colorado Springs, CO
Originally sent to subscribers 03/09/23
Edi. Note: Last time we talked about the likely effects from USDA-FSIS’ proposed rule on the “Product of USA.” This time, we point out in more detail the practical difficulties of the industry being able to comply with the requirements of that label.
We were in one of the big plants in recent weeks. And they can track carcasses pretty well with tags and sorts.
But that is not the same as tracking every piece of beef from an entire carcass. We forget the exact number but there are over 600 pieces of beef from each carcass. And a big plant is kind of like the freeways in Los Angeles. Wherever you are, there are five more freeways going slightly different directions of the compass at three different elevations. Tracking every piece would be a mindboggling task. The processing lines can shift grades as often as 12 times a shift but that is grades and various branded program primals, not individual pieces of meat.
Methinks we are a long way from tiny little biodegradable RFID chips that don’t crunch if one bites down on your steak. Edible bar code tags readable at line speed on roasts with wet and uneven surfaces?
Of course the isolationists among cattlemen, those who want to put a wall around the U.S. and not let any cattle in or out, will claim there’s another way to make sure of the U.S. identity of every piece of beef. They’ve tried it before. Keep every feeder calf and every fed animal and every cow from any other country from entering the country.
Which, of course, creates trade chaos beyond all imagination. What would happen if we couldn’t sell the large portion of beef we sell to Canada? What about certain cuts that Mexico imports that Americans don’t usually buy? To say nothing of violating WTO rules and likely disrupting export pipelines to huge consumers of our beef and variety meats, adding their part to the nearly $500/fed animal exports contribute to the carcass? And what about the huge demand for ground beef we couldn’t supply without lean beef from outside?
There is a knowledge problem, consumer confusion as to what’s quality and what’s inspection. All of the beef in their meat case has been USDA inspected or inspected under USDA inspection standards. It doesn’t make any difference whether it was born here or in Canada or Mexico, it it’s presented for sale here, it was USDA inspected and is safe to eat.
Grading is what indicates quality, not “Product of the USA.” Of course, that confusion of quality and inspection is what many of the “Product of the USA” label proponents want to exploit. They want consumers to think only American born, raised, fed and processed beef is safe to eat or worth buying. It is part of their goal of keeping cattle prices up, not by continually improving animal health, performance and carcass quality but by keeping any competition, no matter how small a percentage, out of the country.
The consumer activists just want to create doubt in the minds of consumers because they don’t want people eating meat, period.
In furtherance of this confusion among consumers between inspection and grading consider this:
This proposed rule is coming from USDA FSIS, the inspection agency, not the USDA AMS, which is the beef grading agency.
USDA did commission some consumer survey work but it didn’t seem to clear up the confusion very well.
From the survey:
“however, we ultimately determined that too few respondents understood the “Product of USA” labeling claim to be able to determine whether their WTPs [willingness to purchase] differed from respondents who did not understand the claim.”
“The percentage of eligible consumers who reported they always or most of the time look for the “Product of USA” labeling claim when buying meat products ranged from 43% (ground beef) to 48% (NY strip steak).”
“For the unaided recall task, saliency ranged from 9% (plain text in a list of other claims) to 31% (claim with U.S. flag icon).”
In other words, without being prompted, when picking from a list of claims, 9 out of 10 consumers would not pick out the words “Product of the USA” as a key shopping point. If there was an American flag displayed with the claim, 3 out of ten would note it.
As for the “willing to pay,” projections, we found them a bit hard to believe, especially in today’s more inflated food prices.
Although, as a side note, if you’ve noticed, beef has one of the lowest price increases by percentage, despite the fact that beef cuts and meals are often used on television to illustrate food prices.
We’ve found in past surveys, the average consumer tends to overestimate how much extra they’ll pay for a given product characteristic when surveyed. Some will, as whatever their particular nutrition or health or political perception will override price. Price is irrelevant to some other consumers. But price does make a difference to most consumers.
So we’re skeptical when the survey research said consumers will pay $3.67 more per pound, i.e. $21/lb. for N.Y strip vs. $17.33 if the package says “Product of USA” or not.
So, will not having the “Product of USA” label hurt consumer acceptance or the price acceptance of beef in the meat case? Past experience showed us labels with lists of possible sources didn’t seem to affect consumers much. Reliance on their retailer’s meat case and their own experience seemed to be stronger than a change in label. If there is any problem, it will likely come from activists of various stripes raising cane, rather than from consumer acceptance or perception issues.
So is USDA supposed to be helping U.S. cattle producers? Is USDA supposed to be helping protect U.S. consumers and helping them afford the best food for the buck in an inflationary food price time? Or are they trying to penalize cattle producers, packers, retailers and cost consumers more money for informational benefits most won’t notice or care about? Is USDA serving best the activists, the fringe cattle groups with an axe to grind and a political agenda to damage mainstream beef production and advance an anti-trade agenda?
We hope that the agency, after prudent reflection of the complexity of America’s beef chain, realizes the difficulties involved and keeps the overall welfare of consumers in mind when tinkering with this labeling proposal.
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