McDonald’s Plans To Go Cage-Free

Written by Katharine Richter

On September 9, 2015, according to a McDonald’s press release, the company stated in ten years all eggs used by the company in the United States and Canada will be laid by cage-free chickens.  This goal will affect 16,000 restaurants in U.S. and Canada.  According to the press release, “McDonald’s USA purchases approximately two billion eggs and McDonald’s Canada purchases 120 million eggs…”  McDonald’s U.S. President, Mike Andres, stated that the decision comes from customers who are “increasingly interested in knowing more about their food” and also enforcing emphasis on food quality.

The Humane Society of the United States, in a press release, announced it applauded McDonald’s decision and were “optimistic that the switch can occur even quicker” than the proposed ten years.  After McDonald’s announcement, the Massachusetts Society for the Prevention of Cruelty to Animals, in coalition with numerous other groups, proposed a ballot initiative that would “curb extreme confinement and lifelong immobilization of animals at industrial-style factory farms.”  The goal is for the proposal to be included on the 2016 statewide ballot but it will need 90,000 signatures to qualify.

Not all groups are applauding the announcement by McDonald's.  Ken Klippen, president of the National Association of Egg Farmers, wrote an open letter to McDonald's.  In the letter he comments on how McDonald’s has ignored science and cage-free chickens will not bring better quality eggs, nor a safer, less stressful environment for chickens.  Other major agricultural groups have commented with concerns on McDonald’s decision and the proposed ballot initiative, such as rising costs for consumers and farmers and diminution of choice in animal living configurations.

U.S. Chicken Import Ban Continues in South Africa

By Katharine Richter

On August 7, 2015, the Office of the United States Trade Representatives (USTR) held a hearing to determine “whether South Africa should be suspended from the recently renewed African Growth and Opportunity Act (AGOA)” because of failure to eliminate specific agricultural trade barriers previously agreed upon.  AGOA, a trade agreement giving South Africa very “liberal access to the U.S. market,” was renewed on June 29, 2015. 

According to a joint statement from USTR, on June 4 and 5, 2015, industry representatives and government officials from the United States and South Africa met in France to discuss agricultural trade issues in relation to renewing AGOA.  South Africa had agreed to allow “renewed market access for U.S. bone-in-chicken.”  Prior to the meeting, South Africa placed anti-dumping duties on American chicken, effectively banning U.S. chicken.  South Africa at the meeting agreed to create the framework allowing U.S. chicken imports.

The President of the National Chicken Council (NCC), Mike Brown, testified at the hearing that South Africa needs to begin to “treat U.S. products fairly… [and] unless South Africa makes significant progress in this regard, the law now requires the president to take action to limit, or even deny, further preferences.” 

This response from NCC is a result of South Africa failing to implement agreements made at the France meeting.  According to the testimony, “South Africa has agreed to open, and the U.S. industry has agreed to accept, an initial annual antidumping duty-free quota of 65,000 MT, with future growth in that quota calculated upon an agreed formula…”  Mike Brown stated in his testimony, “In our view, South Africa will have only made the progress it is required to make under the AGOA renewal legislation when there are actual imports of U.S. poultry moving into South Africa.”

National Pork Producers Council Urges Repeal of COOL

On July 20, 2015, the National Pork Producers Council (NPPC) and its state chapters wrote a letter urging the Senate to repeal country-of-origin labeling (COOL) for beef, pork, and chicken.

The NPPC letter states that unless COOL is repealed, the World Trade Organization will calculate and authorize what level of retaliation Canada and Mexico can place on the United States.  Mexico and Canada are insisting that the retaliatory tariffs will happen if COOL is not repealed and will remain until COOL is repealed. 

The NPPC letter asserts there will be a negative economic impact if the senate chooses to not repeal COOL.  According to the NPPC letter, Mexico was the United States second largest export market for pork in 2014 and totaled $1.55 billion and Canada was the third largest export market totaling $984 million.  “Exports helped add $63 to the price of each hog marketed last year. Furthermore, pork exports support more than 147,000 U.S. jobs.”  The NPPC letter states that jobs will be affected if COOL is not repealed, “[a]ccording to Iowa State University economist Dermot Hayes, the U.S. economy stands to lose 17,000 jobs if the WTO sets a retaliation level of $2 billion. Over 25,000 U.S. jobs will be lost if the retaliation level is set at $3 billion.”

The NPPC letter urges the Senate to repeal COOL before the August recess.

Written by Katharine Richter - Research Assistant

July 23, 2015

U.S.-Switzerland Sign Organic Equivalency Agreement

  On July 9, 2015, the United States and Switzerland signed formal letters in Washington, creating a U.S.-Switzerland organic equivalency arrangement.  Beginning July 10, 2015, this arrangement allows products verified as organic in one of the countries to be sold in the other as organic, eliminating the need and costs for separate organic certifications.

  According to an Organic Trade Association (OTA) press release, the Swiss population has the highest consumption rates of organic products in the world.  The press release stated the agreement will help streamline access to the Swiss market and strengthen the organic industry.    

  The United States already has organic trade equivalency agreements with Canada (2009), the European Union (2012), Japan (2013) and Korea (2014).  According to a USDA press release, these four previous agreements streamlined access for U.S. organic farmers and producers to over $35 billion in international organic markets.   

  For more information see National Organic Program.

Written by Katharine Richter - Research Assistant

July 10, 2015

House Passes Bill Repealing Beef, Chicken, and Pork from COOL

  On June 10, 2015, the United States House of Representatives passed proposed House Bill 2393, which repeals Country of Origin Labeling (COOL) requirements as applied to muscle cut meat commodities: beef, pork, and chicken.  The amendment to COOL passed through a yea/nay vote of 300-131.  The Bill still needs to be presented and voted on in the Senate.     

  

  According to the House Committee on Agriculture website, supporters of the repeal believe it’s a necessary step in order to bring the United States into compliance with the World Trade Organization (WTO) ruling.  The Bill also ensures avoidance of retaliatory sanctions, such as tariffs, from two of the U.S.’s top trading partners, Canada and Mexico. 

  Although chicken was not included in the WTO ruling, which was aimed at beef and pork labeling, Chairman Michael Conaway (R-TX) stated, “We also eliminate the requirement for chicken, which faced high costs and little if any quantifiable benefits ... [n]o other products are affected.”  All other products, such as fruits, vegetables, and peanuts, would continue to adhere to COOL requirements.

Written by Katharine Richter- Research Assistant

June 12, 2015

House Passes Three Agriculturally Related Bills

  On June 9, 2015, the United States House of Representatives passed by voice vote three agriculturally related bills: H.R. 2051 Mandatory Price Reporting Act, H.R. 2088 United States Grain Standards Reauthorization Act, and H.R. 2394 National Forest Foundation Reauthorization Act.  The bills were reauthorizations which the House Agriculture Committee Chairman, Michael Conaway (R-TX), wanted passed before the bills expired.  The bills still need to be presented and passed by the Senate.

  In a statement on Tuesday, Conaway commented, “As Chairman, my first goal was to have all reauthorizations taken care of before the deadlines passed, and that’s what we accomplished today. In fact, this completes our work in cleaning up the books of the House Agriculture Committee, addressing every item on the Congressional Budget Office’s (CBO) list of unauthorized appropriations under the Committee’s jurisdiction.”  He further stated the Acts are essential for farmers and ranchers to continue having necessary resources to carry out operations.

  House Bill, 2051 Mandatory Price Reporting Act, would reauthorize the Livestock Mandatory Price Reporting Act of 1999, which was set to expire on Sept. 30, 2015.  According to the House Committee on Agriculture website, the Act mandated “price reporting for live cattle, boxed beef, and live swine” as well as “allowed United States Department of Agriculture (USDA) to establish mandatory price reporting for lamb sales.”  The Act was originally created in response to changing markets and the lack of reporting sale prices as larger volumes of animals were being sold via marketing arrangements.  The price reporting mechanism that was previously voluntary became mandatory with the enactment of the 1999 legislation, the goal being to facilitate price transparency.  

  House Bill, 2088 United States Grain Standards Act, would reauthorize the United States Grain Standards Act of 1916.  According to the House Committee on Agriculture website, the Act gives “the federal government authorization to establish official marketing standards for grains and oilseeds and provided procedures for grain inspection and weighing.”

Written by Katharine Richter- Research Assistant

June 10, 2015

Canada and Mexico Seek Sanctions against United States over COOL

  On June 5, 2015, Canada and Mexico requested the right to impose sanctions worth $3 billion on the United States through the World Trade Organization (WTO).  The request comes after U.S. failure to meet WTO recommendations on the Country of Origin Labeling (COOL) ruling.  WTO’s meeting to decide on whether to implement sanctions is scheduled for June 17, 2015.

    The dispute over COOL originated December 1, 2008 when Canada claimed COOL violated both WTO’s Technical Barriers to Trade (TBT) agreement and General Agreements on Tariffs and Trade (GATT).  The dispute specifically focused on imported muscle cut meat commodities: beef and pork.  Mexico requested to join Canada in the proceedings December 12, 2008. On November 18, 2011, WTO ruled that the U.S. had violated both TBT and GATT.  WTO found COOL created a detrimental effect on competitive opportunities for imported livestock by unfairly making domestic products more favorable. 

  Though the U.S. appealed the decision on March 23, 2012, the decision was reaffirmed by the WTO Appellate Body on June 29, 2012.  On May 24, 2013, the U.S. issued an amended final rule 78 Fed. Reg. 31367 to meet WTO recommendations.  Canada and Mexico stated the rule was protectionist and requested compliance proceedings.  On October 20, 2014, WTO found that the U.S. amended COOL measures contained the same violations as the prior regulation.

  Congress has not reached a unanimous decision on how to handle the recent challenges to COOL.  While advocates believe COOL provides a legitimate objective by providing country of origin information to beef and pork consumers, opponents cite a USDA economic study that found that unless there is an increased demand for beef and pork by consumers based on COOL information, implementing COOL results in losses along supply chains. 

  On May 18, 2015, House Agriculture Committee Chairman Michael Conaway (R-TX) introduced H.R. 2398, which would repeal beef, pork, and chicken from COOL.  On May 20, 2015, the House Agriculture Committee favorably reported H.R. 2393 to the House where it is expected to go to the House floor in early June.  

Written by Katharine Richter- Research Assistant

June 8, 2015