Agri-Pulse
MCOOL in spotlight as 'Four Corners' negotiate a final farm bill
By Olivia M. Bridges and Kim Chipman
- Restoring mandatory country-of-origin labels for beef is among top differences between House and Senate farm bills.
- House and Senate Ag committee aides are working to pave a path for final farm bill negotiations when lawmakers return to work Nov. 9.
- MCOOL opponents argue it could reignite old trade disputes on beef labels with Mexico and Canada.
Backers of mandatory country-of-origin labels for beef scored a major victory in August when the long-debated policy made it into a Senate farm bill.
But can MCOOL go the distance?
Congressional staffers are working this month to get House and Senate versions of the farm bill ready for top lawmakers to negotiate major items like MCOOL when they return to Capitol Hill on Nov. 9.
The “Four Corners” — the heads of the House and Senate Agriculture committees — say they are determined to get a farm bill through Congress this year. Their challenge centers around bipartisan division over cost structure changes in the Supplemental Nutrition Assistance Program, as well as disagreement on issues like MCOOL, which has a mix of support from farm state Republicans.
Senate Agriculture Chairman John Boozman, R-Ark., and top Democrat Sen. Amy Klobuchar, D-Minn., along with House Ag Chairman Glenn “GT” Thompson and senior Democrat Rep. Angie Craig, D-Minn., all say they want to finish a bipartisan farm bill before a new Congress begins Jan. 3.
“Chairman Boozman understands the importance of using October to work toward a bipartisan farm bill agreement that can pass both the Senate and the House,” committee spokesperson Sara Lasure tells Agri-Pulse. “The willingness of the Four Corners to have these conversations right now is a positive step.”
"Chairman Thompson remains committed to getting a farm bill across the finish line before the end of the 119th Congress," committee spokesperson Allie Herring said. “Final negotiations on any standing differences between the House and Senate farm bills will take place at the member and leadership levels after the elections.”
On the Democratic side, Klobuchar said she’s spoken with Boozman and House Ag leaders directly, and that committee aides “are working to negotiate the bill and find a path forward.” Klobuchar and Craig both said that resolving a partisan standoff over the timing of SNAP benefit cost shifts to states is key to getting a farm bill done.
If an agreement on SNAP is reached, issues including MCOOL will also have to be worked out or scrapped from final legislation.
It won’t be easy.
A proposal to add MCOOL to the House farm bill in April didn’t make it far enough to get a vote.
The Senate Ag Committee, though, included an MCOOL amendment from Senate Majority Leader John Thune, R-S.D., in its farm bill with support from all 11 Democrats and half of the panel’s 12 Republicans.
Republicans in favor of Thune’s measure were Sens. Chuck Grassley and Joni Ernst of Iowa, John Hoeven of North Dakota, Cindy Hyde-Smith of Mississippi and Deb Fischer of Nebraska. Those in opposition were Boozman as well as Sens. Roger Marshall and Jerry Moran of Kansas, Tommy Tuberville of Alabama, Mitch McConnell of Kentucky and Jim Justice of West Virginia.
MCOOL also divides the U.S. beef industry, with backers saying a return of the mandatory labeling would allow domestic producers to tout top U.S. beef while promoting market transparency. Those against MCOOL argue that it would add to costs, disrupt supply chains and raise the risk of trade disputes.
The National Cattlemen’s Beef Association in July warned against adding MCOOL in the Senate farm bill.
“MCOOL did nothing but raise beef prices, add compliance costs, & hit farmers with retaliatory tariffs while it was law for 6 years. If the Sen. Ag. Committee allows MCOOL to hijack the Farm Bill, it will be in direct support of failed policy,” the group said on social media.
R-CALF USA, which represents independent U.S. cattle producers, praised the Senate Ag Committee adding MCOOL to its bill, which is still making its way through the chamber.
“American cattle ranchers deserve the opportunity to compete for consumers who want American beef," R-CALF USA CEO Bill Bullard said. "All American consumers deserve to know where their beef comes from."
MCOOL first emerged from the 2002 farm bill. Congress repealed it 13 years later as the World Trade Organization took steps to impose retaliatory tariffs on the U.S. after Canada and Mexico said the policy undercut their meat industries.
A USDA rule around voluntary country-of-origin labels on beef took effect earlier this year, though pro-MCOOL groups like the U.S. Cattlemen’s Association are pushing for a return of required labeling.
Jenna Stanton, USCA’s director of policy and public affairs, notes that while House Ag Chairman Thompson has a track record of opposing MCOOL, the group is engaged in discussions.
“We're having really productive conversations with everyone in the House about what inclusion through conference looks like,” Stanton tells Agri-Pulse.
Further, since the House passed its farm bill in April, conversations around beef have gained national attention on the heels of rising meat prices and emerging trade deals, Stanton said.
The average per pound cost of ground beef in September was about $6.79 amid tight supplies, according to the Federal Reserve Bank of St. Louis. The Trump administration is aiming to lower prices by allowing 300,000 metric tons of discounted lean beef trimmings into the U.S. for 90 days ahead of high-stakes midterm elections on Nov. 3. The attention could boost MCOOL’s chances.
Global concerns
But MCOOL isn’t just a matter of House versus Senate; it could potentially reopen a battle with Mexico, Canada and the WTO. Opponents say North America’s integrated beef system, with feeder cattle flowing between the U.S., Mexico and Canada, makes labeling complicated.
When the WTO sided with Mexico and Canada over MCOOL 11 years ago, it set annual retaliation levels against the U.S. at $781 million for Canada and $228 million for Mexico, per the Congressional Research Service. Congress wasted no time in pulling back the law in December 2015.
A return to MCOOL that’s not WTO compliant could revive that threat of retaliation.
While Thune’s amendment requires the USDA and Office of the U.S. Trade Representative to ensure MCOOL for beef is WTO compliant, the MCOOL push in the House lacked such criteria.
The proposed House farm bill amendment from Reps. Harriet Hageman, R-Wyo., and Ro Khanna, D-Calif., stipulated that no ruling by the WTO or other international body could alter the USDA’s authority to require country-of-origin labeling. While consideration of the measure was blocked by the House Rules Committee, it's an indication of how at least some lawmakers in the chamber view the issue.
Regardless, making labeling WTO compliant may not be an easy lift. The Thune amendment doesn’t provide a roadmap for USDA and USTR to figure out compliance. It requires USDA and USTR to find a means of reinstating WTO-compliant labeling within 180 days of the bill’s enactment and then would require USTR to implement MCOOL within one year.
AgBull Media analyst Jim Wiesemeyer calls this a "sleeper." MCOOL could take effect either when USDA publishes notice in the Federal Register that a WTO-compliant version has been implemented or one year after enactment of the bill, regardless of whether MCOOL is considered "Geneva-proof."
“The statute contains no penalty for a missed deadline and no off-ramp if USTR concludes no compliant means exists; the compliance determination shapes the label’s design, not its existence. Opponents call that a built-in trade war; supporters call it the point,” Wiesemeyer said.
Tyler Fulton, president of the Canadian Cattle Association, said his group hasn't figured out a way for MCOOL to work with WTO requirements.
“There are ways to possibly mitigate the effect on the live cattle trade. One could consider more like a North American label, or possibly excluding Canadian cattle from that requirement,” Fulton tells Agri-Pulse. “That's just a little bit different than I think how most people understand mandatory country of origin labeling to represent.”
Fulton said he has made four trips down to Washington in the last 18 months to two years to push against MCOOL.
“I would say we're just really trying to convey the importance of this integrated beef cattle market that we have in Canada and how it benefits beef producers on both sides of the border as well as consumers on both sides of the border,” he said, warning of the possible segmentation of the North American beef industry. Fulton hasn't spoken with Thune, but said he saw positive responses from Senate and House members.
Meanwhile, Stanton said she's hopeful and also noted that she sees a “larger appetite” these days in the House to do something on MCOOL.
“Honestly, it's just taken some time to get folks back to the idea," she said. "Just getting them to the place of, 'We can do this in a WTO-compliant manner. We can do this in a way that's good for trade. We can do this in a way that works out the rules-of-origin kinks within individual trade deals.'"