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The Economic Effect of COOL on the Mexican and United States Cattle Price Relationship

Author

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  • Hoz De Vila, Monica
  • Anderson, David

Abstract

Country of Origin Labeling (COOL) was introduced in 2002 but not implemented until September, 2008. COOL required covered commodities to indicate their country of origin. Among other commodities, COOL applied to muscle cuts and ground beef. Canada and Mexico won a WTO complaint against the U.S. forcing USDA to rewrite the COOL regulations. The WTO finding on the re-written COOL regulation is due to become public any day. This paper analyzes the impact of COOL on stocker and feeder cattle price differences between the U.S. and Mexico. Cattle trade with Mexico is a longstanding market relationship. The U.S. imports stocker and feeder cattle from Mexico. Weekly AMS reported prices of Mexican cattle and Texas feeder cattle prices are used to construct a price spread. An econometric model is developed to analyze factors that affect the Mexican-U.S. feeder cattle price spread. A dummy variable is included for COOL implementation. COOL was found to have a statistically significant positive affect on the price spread for 300-400 and 500-600 pound feeder cattle. The results indicate that the Mexican cattle have received a significant discount following COOL implementation.

Suggested Citation

  • Hoz De Vila, Monica & Anderson, David, 2015. "The Economic Effect of COOL on the Mexican and United States Cattle Price Relationship," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196864, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea15:196864
    DOI: 10.22004/ag.econ.196864
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    Cited by:

    1. Countryman, Amanda M. & Bonanno, Alessandro & Hadrich, Joleen, 2016. "A COOL Repeal: Potential Outcomes of U.S. Mandatory Country of Origin Labeling Requirements on Dairy and Beef Sectors," Conference papers 330172, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Amanda M Countryman & Alessandro Bonanno, 2020. "A COOL Tale: Economic Effects of the U.S. Mandatory Country of Origin Labeling Repeal," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(4), pages 888-912, December.
    3. Bonanno, Alessandro & Countryman, Amanda & Hadrich, Joleen, 2016. "A COOL Repeal: Potential Outcomes of U.S. Mandatory Country of Origin Labeling Requirements on Dairy and Beef Sectors," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236020, Agricultural and Applied Economics Association.

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