Round two for COOL… It all started 25 years ago, and we were discussing the same issues.
[inline_image file=”2303fc4f9bda5ff1fbfd3cf91f374eb1.png” caption=”100 Year Buckle w/ leather background”]
A look back: June 28, 2004, Vol. 83, No. 37
Pete’s Comments: Give it a chance
It’s been a pleasure to watch beef marketing evolve over the past several years. Five years ago the major grocery retail chains didn’t seem to have much interest in branded beef. Today that’s about all you can find in the grocery stores. The pleasing part is that every branded product has created a new marketing opportunity for producers. Producing for a specific segment of the market has been embraced by producers and feeder cattle buyers. This market is better because the industry is producing a better product, and willing to put a name on it.
Branded beef is here to stay and retailers are trying to differentiate themselves from others through these specific products that have some production protocols and are, everyday, showing producers the value of labeling. In the Denver market, King Soopers, owned by Kroger Stores, has roughly five brands of beef available to consumers.
The recent proposed legislation for a voluntary country-of-origin labeling (COOL) program has once again raised controversy across the entire issue. I still fail to see the value in across the board labeling when we’re starting to see greater and greater quantities of branded beef on the market. That brand equity is where the additional values will be found for beef producers and a mandated COOL brand wouldn’t seem to add that much value to beef, if any at all. I suppose we should be pleased that we’re still not engaged in the value-based marketing debate.
I would like to see this voluntary COOL program get a chance to run, and not let industry politics kill it before it’s born. All the program does is essentially outline a specific process verification program in order to label the product. Many mandatory COOL proponents would say that we’ve always had the opportunity to do voluntary country-of-origin labeling. That may be so, but to label any beef products with specific claims there must be some process verification system to back it up. Sort of a truth in advertising thing.
The other debate on the front burner is national animal ID. This program is a reality, and in some way all producers will be asked to comply. The basis for the program is intended as a traceback tool for animal health reasons. And, as we all know and have seen, those health issues are paramount to the market. Just last week, Brazil experienced another hoof-and-mouth episode and Russia has since banned Brazilian beef products from their market. But there is more to the program than animal health.
Traceback is a big issue and the national animal ID program is intended to make this industry even better than it already is. Last week, the Livestock Marketing Association (LMA) held their annual board meeting in Billings, MT, during the World Champion Livestock Auctioneer contest, which a Canadian auctioneer won. Even though LMA realizes that national ID is coming they warned their members to remain cautious as the programs are implemented. Auction markets, which trade roughly 50 percent of the cattle in this country, are in a great position to guide this ID process, but don’t appear to be bringing anything to the table.
However, not all auction markets are skeptical. Joplin Regional Stock Yards, Joplin, MO, will be holding their first electronic ID sale. These guys are really ahead of the pack and see ID coming. They have already made the investment in electronic ID readers in hopes they will be able to achieve higher values for their customers, and more value results in more commissions. Sounds like good business to me.
It would appear that both voluntary COOL and ID will have a place in your future and starting down the voluntary path is wise. We still have to remember that both COOL and ID are politically driven at this point, and that bothers me to some extent. However, there are some market driven attributes to the programs which will ultimately be the foundation for success behind both programs. It would seem easier to add elements to these programs, rather than take away if they don’t work out. — PETE CROW
