The U.S. Department of Agriculture and its Food Safety and Inspection Service (FSIS) on Monday announced they plan to publish a new proposed rule on U.S. meat origin labels for a 60-day public comment period.

USDA said in a release the new rule will offer “new regulatory requirements to better align the voluntary ‘Product of USA’ label claim with consumer understanding of what the claim means.”

USDA said Monday it undertook a review starting in July 2021 “to understand what the ‘Product of USA’ claim means to consumers and inform planned rulemaking.”

The department said it found in a related survey of U.S. consumers that “a significant portion believ(es) the claim means that the product was made from animals born, raised, slaughtered and processed in the United States.”

A “Product of USA” label claim would continue to be voluntary under the new rule, and would also still be eligible for “generic label approval” — meaning it would not need FSIS pre-approval before it could be used on regulated product.

However, the new rule would require that supporting documentation for so-labelled products be kept on file for FSIS personnel to verify.

Apart from the “authorized” label claims for ‘Product of USA’ or ‘Made in the USA,’ the rule also proposes to allow other voluntary U.S. origin claims seen on meat, poultry and egg products sold in the marketplace.

However, those other claims would need to include a description on the package of “all preparation and processing steps that occurred in the United States upon which the claim is made.”

Those other label claims are described as “qualified” claims. “Sliced and packaged in the United States, using imported pork” was given as an example of a qualified claim.

Currently, USDA said, FSIS-regulated products coming from animals that may have been born, raised and slaughtered in another country but are “minimally processed” in U.S. facilities may currently be labeled as ‘Product of USA.’

That policy, USDA said, “may be causing false impressions about the origin of FSIS-regulated products in the U.S. marketplace.”

“American consumers expect that when they buy a meat product at the grocery store, the claims they see on the label mean what they say,” U.S. Agriculture Secretary Tom Vilsack said Monday in the department’s release. “These proposed changes are intended to provide consumers with accurate information to make informed purchasing decisions.”

‘No evidence’

However, the North American Meat Institute, a U.S. lobby group representing beef, pork, lamb, veal and turkey packers and processors, said the proposed new rule “uses the same standard” as the mandatory COOL statute Washington repealed in 2015.

Mandatory COOL was first developed during the Clinton administration, passed near the end of the George W. Bush administration in 2008 and put in place during the Obama administration in 2009. It imposed mandatory origin labels for beef, pork, lamb, chicken and goat meat and certain other perishable commodities where sold at retail in the U.S.

Canada and Mexico responded by challenging COOL at the World Trade organization and in U.S. courts, because the COOL rules — as applied by Vilsack as the Obama administration’s ag secretary — called for U.S. processors of meat from imported animals to provide labels that detailed where the specific animals involved in a given package of meat were born, raised and slaughtered.

The costs involved in segregating animals and production lines to follow the COOL law prompted some U.S. packers and processors to restrict or halt their imports or cut the prices they paid for Canadian cattle and hogs. Some estimates at the time pegged Canadian cattle and hog producers’ losses to reduced prices and lost sales at over $8 billion.

Washington-based NAMI said the U.S. government “lost four times” against Canada and Mexico before the WTO in 2015 authorized those countries to levy over US$1 billion in retaliatory tariffs on U.S. goods if the COOL rule wasn’t withdrawn.

By comparison, the new rule announced this week would limit the use of voluntary ‘Product of USA’ claims, so that only products made from livestock born, raised, harvested and processed in the U.S. could be so labelled, NAMI said.

But such a rule, NAMI said, “will have a discriminatory effect, causing meat packers and processors who wish to make the claim to segregate cattle, hogs, and meat from other nations.”

That segregation “was the basis for the WTO finding and is what allows Canada and Mexico to levy tariffs on American goods,” NAMI said.

Canada and Mexico “still retain that (WTO) authorization” for retaliatory tariffs, NAMI said, and any new label law that uses the same standard as mandatory COOL would allow those countries to “initiate retaliation with no further action by the WTO.”

NAMI also claims the proposed new label rule would actually be “broader than mandatory COOL” because it would also cover processed products, and products intended for foodservice, none of which were subject to the COOL rule.

The lobby group emphasized consumer opinion and transparency are “important to the meat and poultry industry” but said “there is no evidence this rule will increase already high consumer demand for meat and poultry products.”

Also, while supporters of the former COOL and the proposed new rule “like to claim” mandatory COOL increased the prices U.S. beef producers received in the years before that rule’s repeal, “this assertion ignores basic supply and demand fundamentals,” NAMI said.

“In 2015, cattle prices saw record highs because there was a limited supply of cattle to harvest increasing demand. And today, without COOL, cattle prices are again approaching record highs, also due to supply and demand.”

The proposed new rule also “does not consider the integrated nature of the North American meat and poultry industry,” NAMI said. “Livestock and meat products from Canada and Mexico are shipped, tariff-free, across the border for slaughter and processing in the United States. Likewise, meat products are shipped from the United States to Canada and Mexico.”

That “integrated competitive market” allows for more affordable beef and pork for U.S. consumers, NAMI said.

“Unfortunately, this proposed rule is problematic for many reasons. USDA should have considered more than public sentiment on an issue that impacts international trade,” NAMI CEO Julie Anna Potts said in a release.

Will review

In a separate statement Tuesday, Canada’s Agriculture Minister Marie-Claude Bibeau and Trade Minister Mary Ng concurred that the Canadian and U.S. meat and livestock sectors are “highly integrated” and that collaboration “contributes to the growth and resilience of farmers and processors on both sides of the border.”

Canada “remains concerned about any measures that may cause disruptions to the integrated North American livestock supply chains,” they said, and will “closely review” the proposed new rules.

The ministers said the federal government will also “participate in the U.S. rule-making process” to make sure the new rules adhere to Washington’s international trade obligations and won’t disrupt supply chains.

Bibeau and Ng also emphasized the Canadian government remains “firmly opposed” to any U.S. proposition that would attempt to revive a mandatory COOL system.

According to Agriculture and Agri-Food Canada, language has also been included in the 2020 Canada-U.S.-Mexico Agreement (CUSMA) requiring that each party to the trade pact ensures any regulations on labeling “accord treatment no less favourable than that accorded to like goods of national origin.”

Any rules on labeling that any of the CUSMA free trade bloc members impose in the future also must “not create unnecessary obstacles to trade between the parties.”

All that said, separate legislation, which if passed would compel the U.S. Trade Representative’s office and USDA to come up with a new and WTO-compliant mandatory COOL system just for beef, has already been before Congress for months or more.

A bill introduced in the U.S. Senate in September 2021 by Senator John Thune of South Dakota was read twice in that chamber and referred to its agriculture, nutrition and forestry committee.

An identical bill introduced in the U.S. House of Representatives in late March last year by Texas Rep. Lance Gooden was referred at that time to the House ag committee, and to the House committee on ways and means. The ag committee last April 18 referred the bill to a House subcommittee on livestock and foreign agriculture. — Glacier FarmMedia Network

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The hearing was a contrast to the contentious tone among the parties last month that raised concerns the framework deal might unravel.

Ken Feinberg, who is mediating talks, said his “optimism knows no bounds,” and that he expected the next set of cases scheduled for trial to soon settle.

U.S. District Judge Vince Chhabria in San Francisco kept a stay on litigation until Nov. 2 and asked the parties for a status update at that time.

The parties have binding deals to resolve about 45,000 of the 125,000 filed and unfiled claims, according to attorneys involved. Settlements have been reached with each of the lawyers who took cases to trial.

Bayer, which acquired Roundup with its purchase of Monsanto for $63 billion in 2018, agreed in June to pay around $11 billion to settle the lawsuits, which have pummeled the company’s share price (all figures US$).

The company’s Bayer CropScience arm said at the time its settlements will “apply only to U.S. litigation” and the company is “not contemplating a settlement of the Canadian cases related to glyphosate.”

Bayer’s stock closed down one per cent on Thursday at 54.41 euros (C$84.78). Shares have slumped from a high of around 73 euros since the June settlement announcement.

Chhabria had questioned the fairness of the settlement plan, which proposed using an independent scientific panel to assess whether glyphosate-based weedkillers such as Roundup caused cancer.

Days later, Bayer said it would revise that part of the proposal.

Bayer has said Roundup is safe and important to farmers who use the herbicide in combination with the company’s genetically modified seeds.

In 2015, the World Health Organization’s cancer research arm determined the herbicide to be a “probable carcinogen.” U.S. and the European regulators have determined glyphosate to be non-carcinogenic.

— Tom Hals reports on U.S. and international corporate law for Reuters from Wilmington, Del.

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The German company said that lawyers representing those preparing a class action had withdrawn a request for court approval of the $1.25 billion future claims scheme, part of a broader $10.9 billion agreement to settle close to 100,000 U.S. lawsuits related to Roundup (all figures US$).

The move would give both sides more time to address questions raised by Federal District Court Judge Vince Chhabria of the Northern District of California, who presides over the federal Roundup litigation, Bayer said.

Chhabria had raised concerns over Bayer’s plan to create an independent panel of scientific experts to help assess whether glyphosate-based herbicides such as Roundup caused cancer.

“Bayer remains strongly committed to a resolution that simultaneously addresses both the current litigation on reasonable terms and a viable solution to manage and resolve potential future litigation,” the company statement said.

Bayer said the wider agreement to settle current claims at a cost of up to $9.6 billion was not affected by Wednesday’s decision, which only impacted the agreement on future claims.

It declined to comment on the impact on the timetable for the bulk of the settlement.

“The (withdrawal) decision means that Bayer is back to square one when it comes to managing future claims, which will be worked up and filed over the coming years,” said David Noll, a law professor at Rutgers University who closely follows the litigation.

Elizabeth Cabraser, a lawyer representing the lead plaintiffs in the negotiations, said attorneys remained strongly committed to a fair and just resolution for all cases not yet included in the wider settlement.

Bayer is seeking to end legal disputes it inherited with its $63 billion takeover of Monsanto in 2018.

The agreement announced last month would apply only to U.S.-based cases, Bayer said at the time, and the company is “not contemplating” a settlement of similar Canadian cases related to glyphosate.

Court snag

On Tuesday, Bayer shares had fallen more than six per cent after Chhabria said that the court was inclined to oppose the part of the proposed settlement that deals with future claims. The case was due to be considered again on July 24. The shares slipped 0.7 per cent on Wednesday.

The company on Wednesday declined to say whether it would continue pursuing the idea of an outside scientific panel and said it would make adjustments to its existing plan to address Chhabria’s questions.

The San Francisco-based federal judge, in a filing on Monday, had questioned the idea of delegating the decision from judges and juries to a panel of scientists.

Chhabria also questioned whether potential claimants would want to remain bound by a ruling reached by the proposed scientific panel if research is still ongoing.

Regulators including the U.S. Environmental Protection Agency and the European Chemicals Agency, have determined glyphosate to be non-carcinogenic, supporting Bayer’s claim that the active ingredient in its Roundup product is safe for agricultural use.

However, in 2015, the World Health Organization’s cancer research arm determined the herbicide to be a “probable carcinogen,” and since 2018, three consecutive U.S. juries, who listened to scientific evidence from both sides during trials, found that Roundup causes cancer.

— Reporting for Reuters by Patricia Weiss and Tina Bellon; additional reporting by Arno Schuetze in Frankfurt.

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The CGC announced Monday that 222 eligible unpaid growers will receive a total of $11.146 million covered by the security ILTA posted before it was put under creditor protection last July.

Payments have been issued and will be delivered “in the coming days,” under the commission’s Safeguards for Grain Farmers Program.

Under the program, CGC-licensed grain companies have to tender security for outstanding grain liabilities in the form of either a bond, letter of credit, letter of guarantee or payables insurance. If a licensed company defaults on paying farmers, the CGC uses the security to compensate those eligible.

Producers must submit claims for compensation within 90 days of delivery or within 30 days from the date the cash purchase ticket or cheque was issued, whichever is less.

Following ILTA’s default, the CGC assessed 271 producer claims, which the commission noted was “the largest number ever received against a company’s security.”

ILTA’s default also represents the largest total security payout in CGC history, the commission said — although not all affected producers who made claims are eligible for payment in this case.

That’s partly because some farmers were owed money for canary seed deliveries, which aren’t regulated under the Canada Grain Act. That group includes 44 farmers, who are still owed about $2.1 million.

Other ineligible producers had amounts outstanding for deliveries made outside the program eligibility period, the CGC said. Those producers and the canary seed growers will be left to seek whatever assets are left available for ILTA’s unsecured creditors. The company’s primary secured creditors include HSBC and Farm Credit Canada.

“The ILTA Grain Inc. situation has been a difficult one for everyone involved, and we are very pleased to be able to deliver over $11 million in payments to producers who were owed money,” CGC chief commissioner Patti Miller said in Monday’s release.

Having suspended ILTA’s licenses in July, the CGC in August allowed ILTA to operate its primary elevators at Saskatoon and Belle Plaine, Sask. and to carry on business as a grain dealer “under specific conditions.”

Among those conditions, ILTA wasn’t allowed to buy or receive grain from producers, but was able to ship out remaining stocks of grain, a task it completed in mid-October.

For producers who had delivered grain into ILTA’s stocks but hadn’t received documentation, the CGC negotiated the setup of an escrow account worth about $3 million, above and beyond ILTA’s payables insurance policy.

Atradius, the insurance company covering ILTA’s payables, wired $11.146 million to the CGC on Dec. 27 to cover the eligible claims — including claims by producers who had delivered to ILTA but didn’t receive documentation.

HSBC, as a secured creditor, has a hearing scheduled at the Supreme Court of B.C. in Vancouver on Thursday and Friday this week. According to PwC Canada, which is serving as ILTA’s court-appointed monitor, HSBC is seeking an order to get $11 million PwC has been holding in trust pending the outcome of the CGC claims process, plus the money in the escrow account.

‘Could not pay’

The CGC said Monday it generally recommends producers limit their risk of financial loss by requesting payment for each load at time of delivery. Past that, producers who see delays in being paid for grain should contact the CGC “immediately.”

But according to Atradius in court documents it filed Dec. 30, it had been ILTA’s practice to mail out elevator and grain receipts and cash purchase tickets after the fact, historically within a week of receiving grain.

However, according to Atradius, as ILTA “began to experience liquidity issues… this delay grew to as much as 28 days.

“In other words, despite its liquidity issues, ILTA continued acquiring grain from producers at a time when it could not pay for it (and) did not pay the producers for their grain, and in fact delayed payment to the producers.”

Atradius will be in court this week disputing HSBC’s claim to the money from the sales of grain ILTA had on hand. The insurer in this case will be the “subrogee” for the farmers to whom it has already paid out on its policy via the CGC, which means it “steps into the shoes of the producers who are precluded from double recovery.”

In its Dec. 30 response to HSBC’s application, Atradius contends that ILTA “failed to issue valid (cash purchase tickets) and therefore did not acquire title to (the unpaid producers’) grain.”

‘Challenging conditions’

ILTA was formed in Surrey in 2011 by former managers of specialty crop export firm Finora, after that company’s owner, Noble Group, sold Finora and its four plants in Saskatchewan and Alberta to AGT in 2009.

According to an affidavit last July, the company, which deals mainly in pulse crops, faced “increasingly challenging international trade conditions” in recent years affecting its business in export markets including India, China and Saudi Arabia.

Since it entered creditor protection, ILTA’s crop handling and processing facilities have been sold off to assorted buyers, starting with Viterra, which bought the ILTA pulse facility at Belle Plaine, Sask. in August.

In November, court approvals were granted for the sale of ILTA’s processing plant at Saskatoon to containerized crop handling firm DG Global, and for four other Saskatchewan sites — two at North Battleford and one each at Swift Current and Cut Knife — to be sold to an arm of trading firm ETG Commodities. — Glacier FarmMedia Network

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The CCHA said the most destructive of the storms during that week came on Sept. 17.

“There is significant damage from this late–season storm. There was heavy rain in some areas of this storm path with the highest reported rainfall accumulation of around five inches. It was a slow-moving storm,” said Darryl Tiefenbach of Additional Municipal Hail in a statement.

“In the core of the storm path, crops are completely destroyed. The heavy rainfall in some of these areas will make adjusting challenging. We are all hoping for sunshine, warm temperatures and wind to help farmers harvest crops.”

“The Sept. 17 storm was very devastating. There was lots of heavy damage to crops that were ready to harvest. The heavy rain that came with this storm could slow down adjusting due to field conditions,” Murray Bantle of Co-operative Hail Insurance Co. added.

Bantle urged Prairie farmers to contact their insurance adjusters to determine check strips in their fields prior to harvest.

Generally, each field will have five check strips, usually 20 by 30 feet, with one from the middle and the four corners.

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Between July 27 and Aug. 6, hail on the Prairies saw farmers add 900 claims alone, according to a CCHA press release Friday.

To date overall, Saskatchewan farmers submitted about 6,900 claims, with 2,000 from Alberta and 1,300 from Manitoba.

Rick Omelchenko, CCHA president, said nearly half of the claims have been processed and the overall number of claims are similar to those filed in 2018. The hail season ends in October.

“Harvest might be better in Manitoba with the decrease in hail claims but extremely wet weather in some places and extremely dry weather in other provinces will also have an impact on harvest volumes,” Omelchenko said.

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“Bayer has not proposed paying $8 billion to settle all the U.S. Roundup cancer claims. Such a statement is pure fiction,” Feinberg said in an email on Friday (all figures US$). “Compensation has not even been discussed in the global mediation discussions.”

Bayer shares, which had shed some of their gains before Feinberg’s statement, retreated further and closed up 1.7 per cent at 64.63 euros (C$95.64).

Bayer, which acquired Roundup and other glyphosate-based weedkillers as part of its $63 billion takeover of Monsanto last year, declined comment on the initial Bloomberg news report and on Feinberg’s response.

Bayer CEO Werner Baumann last week said the company would consider settling with U.S. plaintiffs only on reasonable terms, and if it “achieves finality of the overall litigation.”

He added at the time the group was “constructively engaging” in a court-ordered process with mediator Feinberg on the cases heard in federal court. Most of the pending cases, however, have been filed with U.S. state courts.

Feinberg added that any efforts by Bayer towards a comprehensive settlement were tied in with the mediation proceedings overseen by him. “These are all part of the same mediation process.”

Bayer shares have lost more than a third of their value, or roughly 30 billion euros (C$44.4 billion), since last August when a California jury in the first such lawsuit found Monsanto should have warned of the alleged cancer risks from Roundup.

High expectations

The German drugs and pesticides company has engaged in negotiations with plaintiffs’ lawyers, two sources familiar with the matter told Reuters.

“The problem is, how do you get the plaintiffs to climb down from their very high expectations? None of the jury verdicts so far have been favourable for Bayer,” one of the sources said, adding that talks were focused on basic questions such as how to handle potential future claims.

Bayer said on Friday that the next U.S. glyphosate lawsuit initially scheduled to be heard in St. Louis, Missouri, this month would be postponed to Jan. 27, 2020, and that a following St. Louis case slated for September had also been postponed.

The German company may benefit from having cases heard in the city where Monsanto was headquartered and where Bayer manages its global seeds business. But Missouri is also known for juries that often hit companies with huge damages.

Bloomberg said the delays had been pursued by Bayer to allow for undisturbed settlement talks.

The initial unfavourable court rulings in the first three glyphosate cases, heard in California, have at times dragged Bayer’s market value below what it paid for Monsanto, although the shares are now trading above that level.

The company, which says regulators and extensive research have found glyphosate to be safe, has previously said it was banking on U.S. appeals courts to reverse or tone down three initial court rulings that have so far awarded tens of millions of dollars to each plaintiff.

Bloomberg cited three sources familiar with the discussions as saying Bayer’s lawyers were seeking an accord to resolve all current and future cases. Talks over cases that have yet to be filed were particularly tricky, the report added.

While Bayer has indicated it could pay $6 billion-$8 billion, plaintiffs’ lawyers want more than $10 billion to drop their claims, the report said.

An estimate of a $20 billion hit from the litigation has previously been reflected in the share price, while a likely litigation settlement liability was in the mid-single-digit billion dollar range, Bank of America analysts said in note.

They kept a “neutral” rating on the stock, citing uncertainty over Bayer’s fortunes in the appeals process — with the first appeals verdict expected by the end of the year – and whether a settlement could be achieved before that.

The number of U.S. plaintiffs blaming Roundup and other glyphosate-based herbicides for cancer had continued to rise by 5,000 to 18,400, Bayer said last week.

— Reporting for Reuters by Jonathan Stempel and Ludwig Burger; additional reporting by Tina Bellon.

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SGI Canada — the Regina-based property and casualty insurance provider which operates in tandem with the Saskatchewan Auto Fund, the Crown auto insurer — on Wednesday launched a new Farm Business Unit with “a specialized team of underwriters and adjusters dedicated to serving only farming and ranching customers.”

The company, which sells property and farm insurance in Ontario, Manitoba, Alberta and British Columbia as well as Saskatchewan, farmers’ insurance needs have become “more sophisticated” as farms become bigger and operations more expensive.

“Customers have told us that the insurance industry in general hasn’t done a good enough job understanding or serving the ag sector,” chief operating officer Don Thompson said in a release.

“We agree. After talking with customers and independent broker partners, we have begun to make some improvements. With the new Farm Business Unit we’re looking forward to giving our farm customers better service and the best coverage possible to meet their needs.”

SGI Canada’s farm insurance products include Agro Pak, a comprehensive package covering farmers’ commodities, livestock, buildings, machinery and equipment as well as farm families’ homes and personal belongings.

Other bundles include Farm Produce Advantage, which covers grains, other crops, fodder and inputs such as fertilizers and chemicals, and Farm Property Advantage, which covers farm buildings and their contents and equipment. The company also offers individual packages for buildings, building contents, machinery, livestock and farm liability among others.

Professional agrologist Blair McClinton has been named to lead the new unit, whose staff have “training and knowledge of farming and ranching operations, crop production, farm vehicles, machinery, livestock, equipment, farm buildings and other assets,” the company said.

The unit, McClinton said, has a farm claims manager in place along with a team of designated adjusters at SGI Canada branches across the Prairies, including two farm machinery specialists providing technical support.

Until now, he said, SGI’s Agro Pak claims weren’t always exclusively handed by adjusters with an agriculture background, but will now be handled by property adjusters from various branches who have either backgrounds and/or training in agriculture and experience in Agro Pak policies and claims.

The new unit, he said, is also “committed to providing ongoing training for all of our staff so they have a better understanding of how the agriculture industry and how the industry is changing.”

Since SGI Canada products are sold exclusively through independent brokers, McClinton said, farm customers’ primary point of contact will still be the broker.

In the event of a claim, he said, farm customers will then deal with a Farm Business Unit claims adjuster. Those adjusters will also handle all Agro Pak claims, “regardless of whether the loss relates to the dwelling, or to a farming or ranching exposure.”

SGI, he said, is also working on some product and pricing changes, so farm customers “should be in touch with their brokers to make sure they’re on top of what is being offered.” — AGCanada.com Network

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