By Rob Hotakainen

McClatchy Washington Bureau

WASHINGTON — After surviving years of drought and watching the size of the U.S. cattle herd fall to its lowest level in more than 60 years, Texas cattleman Bob McCan would just as soon steer clear of the U.S. government’s latest meat-labeling rules.

For many U.S. consumers, it’s a popular idea: Label packages to let them know what country the meat comes from.

But with his herd of roughly 4,000 including cattle from Mexico, McCan said there’s no good reason to segregate the animals when he sells them. All it would do, he said, is create hundreds of millions of dollars of extra handling costs that would get passed on, driving up the price at grocery stores.

“We don’t want beef to become a luxury item,” said McCan, a fifth-generation rancher from Victoria, Texas.

McCan, now the president-elect of the National Cattlemen’s Beef Association, is among a group of cattle producers and meat companies that has sued the U.S. Department of Agriculture for moving ahead in late May with new country-of-origin labeling rules.

In a lawsuit filed July 8 in U.S. District Court in Washington, the groups claim the labels will hurt beef exports and are unconstitutional as “compelled speech” that doesn’t advance a government interest.

Backers of the new rules, who say labeling can be done at a minimal cost, are braced for another battle with cattle producers.

“They’re totally wrong – consumers have the right to know where products are from,” said Joel Joseph, chairman of the Los Angeles-based Made in the USA Foundation, a group that promotes labeling and products manufactured in the United States. “It’s not forced speech. It’s just consumer information, the same kind of information that’s on a label of a new car that says where an engine’s from.”

He offered some advice for McCan: “If he doesn’t want to segregate his cattle, then he shouldn’t get cattle from Mexico.”

McCan said labeling is a marketing issue that should be left to the private sector.

“We’re not anti-labeling at all,” he said. “We just kind of feel like the government doesn’t really need to be in our marketing system. It doesn’t have to be dictated to us.”

Cattle producers aren’t the only unhappy ones.

The new labeling rules also could ignite a trade war with Canada, which is threatening to retaliate. Last month, the Canadian government called the new rules a “protectionist policy” that discriminated against foreign competition. Ottawa said it might respond by imposing tariffs on a long list of products, including pork, fruits and vegetables, pasta, chocolate, cheese, office furniture and many more. The Canadian government fears that its beef exports to the United States would decline under the new rules, with U.S. retailers more likely to reject foreign meat.

Canadian officials immediately complained to the World Trade Organization, but they say it could take more than a year to resolve the case.

As a result, John Masswohl, director of government and international relations for the Canadian Cattlemen’s Association, called the new rules a tactic by the U.S. Agriculture Department “to buy themselves another year of discrimination.”

And he predicted that the threat of tariffs will quickly affect U.S. businesses.

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