By Andrew Heck
Integration and cooperation are fundamental to many livestock industries in Canada and the U.S. For the Canadian pork sector, pigs are shipped every day to destinations south of the border, where they’re raised to market weight on farms or sent directly to processing facilities for slaughter. It makes sense for both sides: Canadian producers are afforded a broader choice of marketing options, while U.S. producers and processors receive much desired supply.
Starting in 2021, discussions around country-of-origin labelling re-emerged in the U.S. after several years of hiatus. Driven by increasingly protectionist sentiments, the idea has support among some livestock sectors, politicians and consumers but ignores many of the practical realities that allow the Canadian and U.S. pork sectors to do business freely. The return of country-of-origin labelling threatens not only our positive international relationship but could complicate pork availability and result in price hikes at retail.
While the latest country-of-origin rules proposed for meat, poultry and egg products are ‘voluntary’ (vCOOL), many in Canada and the U.S. expect labelling could have a similar effect to the ‘mandatory’ (mCOOL) conditions that were imposed in 2008 and eventually struck down in 2015. Incoming vCOOL rules were announced in March 2024, and the ‘Product of USA’ or ‘Made in the USA’ label will once again be eligible for generic use on qualifying products, starting in January 2026.
As the clock ticks toward the return of regulatory burden, Canadian and U.S partners have been brought back to the unfortunate and avoidable position of conflict with legislators.
Fear of competition is bad for business
mCOOL was first proposed in the 2002 Farm Bill presented to U.S. Congress, but after some implementation delays, the 2008 Farm Bill was where it officially got off the ground. Sensing competition from the Canadian and Mexican beef markets, U.S. beef producers advocated for greater clarity around beef origins: cattle from Canada, finished and slaughtered in the U.S. – they claimed – should not be considered fully American. U.S. Congress agreed and set forth regulations requiring retailers to package fresh beef, pork and lamb with indicators of where animals were born, raised and harvested.
Following mCOOL implementation, the Canadian red meat industry’s position was that the legislation unfairly discriminated against imported livestock. Under the terms of the North American Free Trade Agreement (NAFTA), signed in 1992, there existed provisions for partners in the deal to oppose technical barriers to trade, with the World Trade Organization (WTO) responsible for resolving such disputes. After a six-year, costly battle between the U.S., Canada and Mexico, the WTO sided with Canada and Mexico.
While mCOOL appeared open and shut, again in 2021, cross-border competition began to worry the U.S. beef sector, and vCOOL conversations heated up. Tom Vilsack, Secretary, U.S. Department of Agriculture (USDA) was the official under whom the 2008 Farm Bill was passed, during President Barack Obama’s first term. Vilsack was reappointed to the position with the election of President Joe Biden.
As under NAFTA, the updated Canada-U.S.-Mexico (CUSMA) or U.S.-Mexico-Canada (USMCA) Agreement includes trade dispute resolution mechanisms through the WTO. And, once again, Canadian industry and government stakeholders are preparing for round two of defending the interests of Canadian producers.
Lawrence MacAulay, Minister, Agriculture and Agri-Food Canada (AAFC) and Mary Ng, Minister, Export Promotion, International Trade and Economic Development Canada, issued a joint statement in response to the finalization of vCOOL rules.
“The meat and livestock sectors in Canada and the United States work closely together, supporting food security as well as local and regional food systems,” the statement reads. “Canada remains concerned about any measures that may cause disruptions to the highly integrated North American meat and livestock supply chains.”
The Canadian Pork Council (CPC) was also quick to respond.
“This regulation will force division into an aligned industry that will only increase costs for producers, for processors and ultimately for consumers,” said René Roy, Chair, Canadian Pork Council (CPC). “We are pleased the Government of Canada has already indicated it will be looking at options to correct the protectionist nature of these proposed regulations.”
The U.S. National Pork Producers Council (NPPC) worries that the industry’s hard work to overcome labelling concerns in years past could be undone with the latest ruling.
“It’s something we’ve fought against for over a decade, and we were successful in repealing mandatory country-of-origin labelling after the WTO ruling,” said Maria Zieba, Vice President of International Affairs, NPPC. “Our biggest concern then, as now, is the impact on trade.”
With the stage set for much deliberation and debate ahead, it’s worth exploring why vCOOL matters to the industry and why it should matter to consumers.
Canadian pigs come in peace
While live pigs cross the Canada-U.S. border for various reasons, three types of U.S. buyers of Canadian pigs stand out: producers across the Midwest looking to fill barns with weaners for finishing to market weight, small- and medium-sized processors in the sparsely populated northern U.S. interior looking for hogs to slaughter, and processors in the concentrated Minnesota-Iowa-South Dakota meatpacking heartland looking for cull sows.
For the past decade, the U.S. has received more than 4.5 million Canadian pigs annually. Manitoba alone is responsible for three million of those. Altogether, live pig and pork exports to all foreign countries, not just the U.S., represent 90 per cent of Manitoba’s production. Across Canada, the total amounts to around 70 per cent of production.
“When this comes into effect, it’s going to cause a discount on live animals going to the U.S.,” said Cam Dahl, General Manager, Manitoba Pork. “Barriers to trade cost everybody in the system.”
Manitoba’s proximity to major pork-producing U.S. states situates it ideally for cross-border movements; however, this also makes the province especially vulnerable to political decisions outside of Canadian control.
“Right now, if an isowean from Manitoba is shipped to Iowa, finished in Iowa and processed in Iowa, large retailers buy that pork and sell it in Canada as ‘Product of USA,’” said Dahl. “My concern is that big brands are simply going to say, ‘We’re not going to change our supply chain and label. Producers and processors are going to have to comply.’”
Supply chain communication could prove vital as businesses begin to make decisions in advance of implementation.
“It’s going to depend on how it gets rolled out. It’s voluntary, and it’ll be up to the retailers to assess whether it makes economic sense,” said Zieba. “Retailers may have a product they want to differentiate in the marketplace, but it’s up to producers and processors to explain their added costs and ask retailers whether it’s in their best interest.”
While much of the potential impact of vCOOL depends on retailers’ decisions around how to apply it, political polarization itself likely cannot be blamed for how it transpired.
“It doesn’t matter which policy controls U.S. Congress or the White House. I think these concerns aren’t party-dependent, and that’s not just the case for the U.S. but also Canada,” said Dahl. “The pandemic accelerated the ‘us first’ approach.”
In terms of next steps, the WTO’s past ruling on the matter could still hold weight in the argument, which undoubtedly worries NPPC.
“Both the Canadian and Mexican governments have made strong statements,” said Zieba. “We’re trying not to take an antagonistic approach on this.”
But words need to be backed with action. For the Canadian industry, that means holding leaders accountable and continuing to pressure for support.
“We need to have a strategy and approach from our government. We’re looking to have a strong push back on this – from both federal and provincial governments,” said Dahl. “Not just because of country-of-origin labelling, but we have to push back on this protectionist mindset.”
Sticker shock could surprise consumers
As food price inflation rates in Canada and the U.S. have left consumers unsettled in recent years, further pressures to price – such as reduced supply – will almost certainly fuel the fire.
Underscoring the political will for vCOOL is perceived consumer support for transparency surrounding where their food comes from, based on a survey conducted by the USDA in 2023 that showed 65 per cent of respondents were in favour of the regulations.
For U.S. consumers of pork that originated with Canadian-born pigs, is it food safety or quality concerns that have stoked division? The Canadian Food Inspection Agency (CFIA) and USDA are both recognized as two of the top food safety regulators globally, and many agri-food products are freely exchanged between the two countries.
In terms of pork quality comparisons between Canada and the U.S., feed ingredients, medicines and other production implements are often shared, highlighting just how deep integration goes. The Canadian Pork Excellence (CPE) program in Canada and Pork Quality Assurance® Plus (PQA) program in the U.S. are designed to train and certify producers on many of the same principles, and these programs are respected by overseas buyers of Canadian and U.S. pork.
Most importantly, integration between the Canadian and U.S. pork industries has allowed both countries to remain limber and responsive to domestic and global pork demand – a key achievement in the battle for increased food security and affordability.
Canada, with roughly one-tenth the population of the U.S., overproduces pigs for domestic pork demand. While the U.S. also relies on exports, its domestic market is much larger, fueling high demand. In recent years, the U.S. has been Canada’s top export destination for fresh pork, averaging around 400,000 tonnes annually. On the flip side, the U.S. exports more than 200,000 tonnes of fresh pork to Canada annually, in addition to many processed products, like sausages, deli meat and bacon.
Partnership matters over politics
Given the history and ongoing nature of the Canada-U.S. relationship in pigs and pork, any threat to its stability is not in the interests of pork producers, processors, retailers or consumers.
As political discourse becomes increasingly populist in nature, and as voters align themselves to ideologies that have the potential to challenge economic development and trade, humble agriculture – the very heart of food production and distribution – is inevitably caught in the crossfire.
While protectionism has become increasingly entrenched, well-intentioned defense of national industries sometimes has the effect of disrupting supply chains against the will of key stakeholders. The Canadian and U.S. pork industries have made their opposition to vCOOL loud and clear, and politicians across borders and party lines have a duty to listen.
