What Will Be Required Of Cow Calf Producers Under The COOL Rules This September?

The title of this article asks a question that is not yet totally answered. However, the answer is beginning to be clearer and soon may be finalized. As you likely know, in 2002, the US Congress passed a law requiring certain “covered commodities” to be verified and labeled as to their county of origin. The acronym used commonly for this law is COOL, denoting County of Orgin Labeling . Final rules for COOL will be written following final passage of the 2007 Farm Bill which has passed the Senate and House Conference Committee and will likely be sent to the President’s desk soon. If the President signs the Farm Bill, final rules will then be written. As of now, the following definitions and requirements are likely to become rules. Let’s examine some of these as they apply to cow-calf producers in Colorado :

Beef as a Covered Commodity: Meat cuts and ground product from beef are defined as a “covered commodity”. More specifically, under the current rules, “a meat product from beef (including veal), pork, and lamb must bear a COOL label or is subject to labeling providing COOL information if: 1. It is sold at retail, AND, 2. It is a muscle cut, or 3. It is a ground product. The product is EXEMPT from COOL labeling requirements if: 1. The meat product is sold at foodservice (e.g., restaurants, institutions, etc.), OR, 2. The meat product is an ingredient in a processed product or, in effect, is processed.” (Source: http://www.countryoforiginlabel.org, link to DOES A MEAT PRODUCT NEED A LABEL?, accessed 13 May 2008).

Jack’s Comment: From this we can assume that home-raised and harvested beef that is not sold at retail will not be required to be COOL labeled. Beef served on a menu at a restaurant will be exempt, as will beef served in a cafeteria or other food service institutions.

Recordkeeping Requirements: The current language states: “Any person engaged in the business of supplying a covered commodity to a retailer, directly or indirectly, must maintain records to establish and identify the immediate previous source (if applicable) and immediate subsequent recipient of the product. The record must identify the product unique to that transaction by means of a lot number or other unique identifier, for a period of one (1) year from the date of the transaction.

“Establishments that slaughter livestock are considered initiating suppliers of a covered commodity. The Agricultural Marketing Service (AMS) has indicated that the initiating supplier (packer) either must have the records in its possession or have access to records of the livestock supplier that substantiate the country of origin of the meat product at issue.” (Source: http://www.countryoforiginlabel.org, link to Recordkeeping Requirements, accessed 13 May 2008.).

Jack’s Comment: Since cow-calf producers indirectly supply beef to packers, I interpret this to mean that cow-calf producers will be responsible to have records to substantiate the country of origin of their calves, cull cows and bulls. While these records may not be required at time of sale, it is likely that there will be an increasing demand for such record verification at the time of sale.

Seed Stock / Cow Calf Responsibility: “Provide enough information for an auditor to verify the origin and ownership of the animals identified and to verify the stated designation. Properly identify and record all animals according to the designation.” (Source: http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELDEV3103374, accessed 13 May 2008.).

Jack’s Comment: I interpret this to mean that a rancher must have sufficient documentation so that in the event of an audit from USDA, they can verify the country of origin of the cattle they sold into the marketplace.

Examples of records and activities that may be useful. The following record examples are listed in the 2002 version of COOL. “Birth records, receiving records, purchase records, cow/calf tag ID system, sales receipts, feed bills, feeding records, animal inventory, acreage inventory, site maps, APHIS VS forms, production estimates, health records, ownership records, segregation plan, state brand requirements, replacement activities, beef quality program (BQA), breeding stock information.” (Source: http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELDEV3103374, accessed 13 May 2008.).

Jack’s Comment: In reality, it will likely be a combination of information that will be used to substantiate the origin of cattle. Records such as brand inspections, bangs vaccination records, sales receipts, etc. will be used to verify that the cattle did in fact originate at the ranch, or were purchased from a qualifying location.

“In the Normal Conduct of Business” clause: The National Cattlemen’s Beef Association (NCBA) website explains recent revisions language in the current Farm Bill legislation as follows: “Language in both the Senate and House bills helps alleviate the paperwork burden on producers requiring only documents used “in the normal conduct of business” to verify origin.… While the current law is far from perfect, the compromise language in the Farm Bill is an improvement for cattle producers. Mandatory country-of-origin labeling is scheduled to take effect on September 30, 2008.” (Source: http://www.beefusa.org/goveFarmBill.aspx, accessed 13 May 2008.).

Jack’s Comment: In my opinion the implementation of COOL should not be viewed in a panic mode for cow-calf producers. Most, if not all, of the documentation needed to meet the COOL requirements is likely already part of your normal cow-calf production system. However, I suggest that we all do a better job as record-keepers and make certain that the history of our cattle can be substantiated. I also foresee that such records will enhance the value of cattle when they leave the farm of origin. One of the great principles of our market-driven system is the reward for value and the discount for absence of value. As we look back in 10 years, my prediction is that COOL will add value at the ranch level for those who document and market country of origin information.

Source: Jack C. Whittier, Colorado State University

Retiring Iran OPEC Governor Blames US For High Oil

DUBAI (Dow Jones)-- Iran 's OPEC governor Hossein Kazempour Ardebili fired a parting shot at the U.S. over high oil prices and blamed politics for blocking him from the cartel's top job, in an interview with Dow Jones Wednesday just days before he retires. "I've seen oil fall to $6 a barrel and I've seen it shoot up to the current level," said the 56-year-old Arbedili. "I warned it could happen as the result of long term sanctions on major producers including Iran ."

Ardebili, a key strategist in the 13-member Organization of Petroleum Exporting Countries for the last 23 years, said he will officially hand over next week to Mohammad Ali Khatibi, a director at National Iranian Oil Co. His retirement comes at a difficult time for OPEC as it comes under intense pressure to ease oil prices that have doubled over the last year and reached record highs above $125 a barrel.

"We're at a very critical time for OPEC with prices shooting up, and Iran being under sanctions," said Ardebili. Iran, the group's second-largest producer after Saudi Arabia, is finding it tough to keep pumping its 4 million barrels a day of crude when U.S. sanctions crimp its access to vital drilling technology, equipment and expertise.

Washington is tightening sanctions on the Islamic Republic in an effort to stop its development of nuclear power plants and its support of groups such as Lebanon 's Hezbollah and Moqtada Al Sadr in Iraq .

"Why should we increase production if Iran can't use the money we're getting as revenue because of sanctions," he said. Oil prices have surged almost 25% since the start of 2008, when they broke the $100 barrier. Light, sweet crude for June delivery settled up $1.57, or 1.3%, at $125.80 a barrel on the New York Mercantile Exchange.

Fundamentals Ardebili blames geopolitics and Wall Street "speculators" shifting their investments into oil futures for high prices. "Prices don't reflect the fundamentals anymore. OPEC does however realize that this is a very serious matter, not only for consumers but also for producers," he said, adding that crude is unlikely to fall below $100 a barrel in the current market.

Lack of demand according to Ardebili has prompted Iran to store about 25 million barrels of heavy oil, worth about $2.5 billion, in tankers floating in the Persian Gulf as buyers stand on the sidelines. U.S. President George W.

Bush will visit Saudi Arabia Sunday, with oil prices at the top of his agenda. Meanwhile, Nobuo Tanaka, executive director of the International Energy Agency called on OPEC Tuesday to address high oil prices. OPEC ministers are so far resisting calls for an emergency meeting of the group, which pumps 40% of the world's oil, ahead of its next schedule gathering in Vienna in September.

Ardebili, who's worked under four different Iranian oil ministers, won't be at the next meeting whenever it takes place. But things could have been very different had he been elected in 2006 as the group's secretary general. Iran nominated Ardebili as secretary general, a role that would have seen him coordinate and oversee much of the group's activities.

His bid for the top job was blocked and Libya 's Abdulla Salem Al Badri was named OPEC's chief. "I believe the block came due to political disagreements with Iran by some member countries," Ardebili, speaking to Dow Jones from his Tehran office, said.

Ardebili hasn't always seen eye-to-eye across the OPEC debating table in Vienna with his counterparts from Arab Gulf producers such as Saudi, the United Arab Emirates , Kuwait and Qatar . And its unlikely his successor Khatibi will have it any easier. "He'll have a heavy load representing Iran ," said Ardebili, who now plans to advise energy companies.

(END) Dow Jones Newswires