Tyson Foods' decision to stop buying Canadian cattle shipped directly to its US beef plants in order to cut costs could impact thousands of industry jobs in the Pacific Northwest, says a Canadian cattlemen's representative.
Tyson, the largest US meat processor, halted purchases in mid-October because there wasn't enough warehousing capacity to accommodate all the different types of labels required under the new country-of-origin labelling 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. "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."
Tyson's move is more fallout from the USDA's controversial labelling rule, which it revised in the spring. Canada and Mexico have asked the WTO 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 increase costs since they require additional logistics of product codes, production breaks and product segregation, and they require a separate category for cattle shipped directly from Canada to American beef plants without added value to customers.
Even though Tyson is still buying Canadian-born cattle that are finished for market in US feedlots, Canadian officials say their cattle industry has lost about $600 million annually because of the labelling rule. As a consequence, Canada has threatened to impose retaliatory tariffs on dozens of American commodities.