USDA’s Final Rule for Mandatory Country of Origin Labeling

By Riëtte van Laack –

The United States Department of Agriculture (“USDA”) finalized its rulemaking concerning Country of Origin Labeling (“COOL”) mandated by the 2002 and 2008 Farm Bills.  The final rule requires that retailers notify customers of the country of origin of covered commodities (meat cuts and ground beef, veal, lamb, pork chicken, and goat meat, fish and shellfish, perishable agricultural commodities (fresh and frozen fruits and vegetables), peanuts, pecans, ginseng, and macadamia nuts).  The final rule amends and incorporates the interim final rule for fish and shellfish, and the interim final rule for the remaining covered commodities.  

USDA’s COOL requirements apply only to retailers as defined by section 499a(b) of the Perishable Agricultural Commodities Act of 1930 (“PACA”), i.e., persons engaged in the business of selling any fresh and frozen fruits and vegetables with an invoice cost of more than $ 230,000 per year.  Thus, USDA’s COOL regulations do not apply to retailers that do not sell fresh or frozen fruit or vegetables, such as butcher shops.  Food Service Establishments, such as restaurants, lunchrooms, cafeterias, food stands, bars, and lounges are also exempt.  USDA has determined that approximately 37,000 retail stores will be subject to its COOL regulations. 

The COOL regulations do not apply to “processed food items,” defined as a retail item derived from a covered commodity that “has undergone specific processing resulting in a change in the character of the covered commodity, or that has been combined with at least one other covered commodity or other substantive food component.”  A frozen vegetable medley, dried fruit, smoked salmon, and peanut butter are examples of processed food items. However, “the addition of a component . . . that enhances or represents a further step in the preparation of the product for consumption  [does] not in itself result in a processed food item.”  Thus, meat injected with salt or phosphate solution is not a processed food item, whereas cured ham is.

As USDA notes repeatedly in the final rule, an imported product that is exempt from USDA’s COOL regulations may still be subject to country of origin marking requirements of the Tariff Act of 1930 enforced by Customs and Border Protection.

The final rule becomes effective on March 16, 2009, which is 60 days after the date of publication.  USDA has published various guidance documents to aid retailers in understanding and complying with the COOL regulations.