Harrington's Sort & Cull

Please Congress, No Insult to Injury

By John Harrington , DTN Livestock Analyst

Rock-swallowing can be tough on both throat and ego. But there are times when all you can do is grind away and hope everything comes out in the end.

Specifically, I'm not a man that likes to beg. Nor am I fond of legislative tricks where sneaky politicians and lobbyists work to hide potentially controversial actions within a more popular/necessary bill in order to get it passed.

Yet if the only timely way to wipe country-of-origin labeling off the books is to have canceling language ride piggyback on some greater, unrelated juggernaut that can't be stopped, you'll find me down on my knees with outstretched hands for as long as it takes.

Last week the WTO authorized Canada and Mexico to impose retaliatory tariffs of $1 billion for the mandatory country-of-origin labeling law. If the U.S. does not repeal MCOOL by Friday, our North American partners and top meat export customers (e.g., these two country accounted for 31% of all beef exports in 2014) could potentially begin implementing the retaliatory tariffs.

Granted, no one knows for sure at this point exactly which products would be taxed by Canada and Mexico. But given the very nature of the dispute, I think it's a good bet that U.S. beef and pork will be particularly targeted for the tariff.

With live cattle prices currently slumping nearly 30% below late 2014 and beef exports struggling 12% behind last year's pace, ignoring this tariff threat by allowing MCOOL to remain the law of the land would be equivalent to rubbing salt in an incredibly painful wound.

Facing the untenable possibility of a government shutdown, lawmakers have until midnight Wednesday to pass a $1.1 trillion omnibus spending bill to carry Washington through the rest of fiscal 2016 (i.e., through Sept. 30 of next year). This is one of those rare congressional freight trains that will not derail and eventually get to the station in some form.

That's why some leaders have wisely attached the decommissioning of MCOOL as a rider to this major piece of legislation. The strategy may not be a work of commendable art in the field of statecraft. But if it gets the job done and effectively shields the severely damaged cattle market from further, unnecessary trauma, I for one will have no qualms in looking the other way.

For more of John's commentary, visit http://feelofthemarket.com/…

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FRANK FULWIDER 12/21/2015 | 10:35 PM CST
How can labeling, grown in the US, be unfair to Canada and Mexico? Almost every thing has a label of where it is made or grown ,cloths, fruit, fish, cars, electronics, steel, paper products, you name it, its has a label. Why are Canada and Mexico ashamed of their beef?