Tyson Foods’ decision to stop buying Canadian cattle shipped directly to its U.S. beef plants to cut costs could impact thousands of industry jobs in the Pacific Northwest, a Canadian cattlemen’s representative asserts.
Tyson, the largest U.S. meat processor, halted the purchases in mid-October because there isn’t enough warehousing capacity to accommodate all the different types of labels required under the new country-of-origin labeling regulation, company spokesman Worth Sparkman said.
“This is bad for Canada, but it’s bad for the United States, too,” said Canadian Cattlemen’s Association president Martin Unrau, adding that a processing plant in Texas closed because Mexican cattle weren’t being shipped there.
“I think every plant in the Northwest is in jeopardy,” Unrau said. “When you can’t run enough cattle through your processing facility to keep it viable it will be closed. That’s just how it works. … These cattle will not flow down there.”
Tyson’s move is more fallout from the USDA’s controversial labeling rule, which it revised in the spring. Canada and Mexico have asked the World Trade Organization to review the rule again after its Appellate Body partly sided with them.
Unveiled in May, the revised rule requires labels on muscle cuts of beef, pork and other meats to include information on where animals were born, raised and slaughtered, and the rule removes an allowance for commingling of cuts from different countries.
The new rules “significantly increase costs because they require additional product codes, production breaks and product segregation,” Sparkman told the Capital Press in an email. They require a separate category for cattle shipped directly from Canada to U.S. beef plants “without providing any incremental value to our customers,” he said.
The company is still buying Canadian-born cattle that are finished for market in U.S. feedlots, Sparkman said.
Still, Canadian officials say their cattle industry has lost about $600 million annually because of the labeling rule. They also say it has caused a general reduction in cattle prices there.
“What it does is removes a bidder for Canadian-fed cattle, which is a problem for us,” Unrau said.
Canada has threatened to impose retaliatory tariffs on more than three dozen American commodities, including beef, pork, rice, corn, apples, cherries and wine.
Tyson’s move comes as nearly a dozen meat industry groups are suing the federal government over the labeling rule, asserting it violates the U.S. Constitution by compelling speech and that it exceeds the scope of its statutory mandate.
In denying a preliminary injunction in September, U.S. District Judge Ketanji Brown Jackson said in her opinion that the plaintiffs failed to demonstrate either a likelihood of success on the merits of the case or irreparable injury. The groups immediately appealed her ruling.
In the meantime, the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America and several other groups were allowed to intervene in the lawsuit on the government’s behalf.
Tyson Foods: http://www.tysonfoods.com
Canadian Cattlemen’s Association: http://www.cattle.ca