[Federal Register Volume 88, Number 48 (Monday, March 13, 2023)]
[Proposed Rules]
[Pages 15290-15306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-04815]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 88, No. 48 / Monday, March 13, 2023 / 
Proposed Rules  

[[Page 15290]]



DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Part 412

[Docket No. FSIS 2022-0015]
RIN 0583-AD87


Voluntary Labeling of FSIS-Regulated Products With U.S.-Origin 
Claims

AGENCY: Food Safety and Inspection Service (FSIS), U.S. Department of 
Agriculture (USDA).

ACTION: Proposed rule.

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SUMMARY: FSIS is proposing to amend its regulations to define the 
conditions under which the labeling of meat, poultry, and egg products, 
as well as voluntarily-inspected products, may bear voluntary label 
claims indicating that the product is of United States origin. The 
Agency is taking this action to resolve consumer confusion surrounding 
current voluntary label claims related to the origin of FSIS-regulated 
products in the U.S. marketplace. Under this proposal, establishments 
would not need to include these claims on the label, but if they chose 
to include them, they would need to meet the requirements in this rule.

DATES: Comments must be received on or before May 12, 2023.

ADDRESSES: FSIS invites interested persons to submit comments on this 
proposed rule. Comments may be submitted by one of the following 
methods:
     Federal eRulemaking Portal: This website provides the 
ability to type short comments directly into the comment field on this 
web page or attach a file for lengthier comments. Go to https://www.regulations.gov. Follow the on-line instructions at that site for 
submitting comments.
     Mail: Send to Docket Clerk, U.S. Department of 
Agriculture, Food Safety and Inspection Service, 1400 Independence 
Avenue SW, Mailstop 3758, Washington, DC 20250-3700.
     Hand- or Courier-Delivered Submittals: Deliver to 1400 
Independence Avenue SW, Jamie L. Whitten Building, Room 350-E, 
Washington, DC 20250-3700.
    Instructions: All items submitted by mail or electronic mail must 
include the Agency name and docket number FSIS-2022-0015. Comments 
received in response to this docket will be made available for public 
inspection and posted without change, including any personal 
information, to https://www.regulations.gov.
    Docket: For access to background documents or comments received, 
call (202) 937-4272 to schedule a time to visit the FSIS Docket Room at 
1400 Independence Avenue SW, Washington, DC 20250-3700.

FOR FURTHER INFORMATION CONTACT: Rachel Edelstein, Assistant 
Administrator, Office of Policy and Program Development, Food Safety 
and Inspection Service, U.S. Department of Agriculture; Telephone: 
(202) 937-4272.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
II. Background
    A. Statutory and Regulatory Requirements for the Labeling of 
FSIS-Regulated Products
    B. Current FSIS Policy on ``Product of USA'' and Similar Label 
Claims
    C. Petitions for Rulemaking
    D. Consumer Survey
III. Proposed Rule
IV. Executive Orders 12866 and 13563
    A. Economic Impact Analysis
    B. Regulatory Flexibility Act Assessment
V. Paperwork Reduction Act
VI. E-Government Act
VII. Executive Order 12988, Civil Justice Reform
VIII. Executive Order 13175
IX. USDA Non-Discrimination Statement
X. Environmental Impact
XI. Additional Public Notification
XII. Proposed Rule Text

I. Executive Summary

    To prevent the introduction of adulterated or misbranded products 
into commerce, FSIS implements a prior approval program for labels 
intended to be used on FSIS-regulated products (9 CFR part 412). 
Without approved labels, these products may not be sold, offered for 
sale, or otherwise distributed in commerce.
    Certain categories of labels must be submitted to FSIS for review 
and approval before use on products in commerce. However, FSIS 
considers certain labels that comply with the Agency's labeling rules 
to be ``generically'' approved (9 CFR 412.2). Such labels are not 
submitted to FSIS, because they are deemed approved if they bear all 
applicable mandatory labeling features and are not false or misleading, 
and may be applied to product in commerce, provided that supporting 
documentation for any information on the label is part of the labeling 
record. One category of labels currently eligible for generic approval 
is labels bearing U.S.-origin claims, like ``Product of USA.''
    FSIS recently conducted a comprehensive review of the Agency's 
current voluntary ``Product of USA'' labeling policy to help determine 
what the ``Product of USA'' label claim means to consumers. FSIS 
started this review after receiving several petitions stating that the 
voluntary label claim ``Product of USA'' is confusing to consumers. By 
law, no product may bear any false or misleading label, such as 
labeling which conveys any false impression or gives any false 
indication of origin. FSIS' review of the policy included a consumer 
survey on ``Product of USA'' labeling on beef and pork products. Based 
on the consumer survey results, reviews of consumer research, and 
comments received on the petitions, FSIS is proposing to amend its 
regulations to define the conditions under which voluntary claims may 
be used on the labels of meat, poultry, and egg products, as well as 
voluntarily-inspected products, to indicate that the products are of 
U.S. origin.
    Under this proposed rule, two specific voluntary U.S.-origin label 
claims, ``Product of USA'' and ``Made in the USA'' (the ``authorized 
claims''), would be generically approved for use on single ingredient, 
FSIS-regulated products derived from animals born, raised, slaughtered, 
and processed in the United States. The two voluntary authorized label 
claims ``Product of USA'' and ``Made in the USA'' would also be 
generically approved for use on multi-ingredient FSIS-regulated 
products if: (1) All FSIS-regulated components of the product are 
derived from animals born, raised, slaughtered, and processed in the 
United States; and (2) All additional ingredients, other than spices 
and flavorings, are of domestic

[[Page 15291]]

origin (i.e., all preparation and processing steps of the ingredients 
are completed in the United States).
    This proposed rule would also allow for U.S.-origin label claims 
other than the two authorized claims ``Product of USA'' and ``Made in 
the USA.'' All U.S.-origin label claims that are not authorized claims 
are known as ``qualified claims.'' These qualified claims would need to 
include a description on the package of all preparation and processing 
steps (including slaughter) that occurred in the United States upon 
which the claim is made.\1\ These would need to be positioned near the 
qualified claim and explain how the product compares to the regulatory 
criteria for use of the two authorized claims ``Product of USA'' and 
``Made in the USA.'' For example, ``Sliced and packaged in the United 
States using imported pork'' could be a qualified claim. As with the 
two authorized claims ``Product of USA'' and ``Made in the USA,'' all 
qualified claims that meet the proposed regulatory requirements would 
be eligible for generic approval. The proposed rule would apply to 
domestic products.\2\ For product exported from the United States, FSIS 
would continue to verify that labeling requirements for the applicable 
country are met, as shown in the FSIS Export Library.\3\
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    \1\ In this proposed rule, the Agency is using both terms 
``preparation'' and ``processing'' for clarity and completeness. The 
term ``prepared'' is defined in the meat regulations as 
``slaughtered, canned, salted, rendered, boned, cut up, or otherwise 
manufactured or processed'' (See 9 CFR 301.2). The term ``process'' 
is defined in the poultry regulations as ``a means to conduct any 
operation or combination of operations, whereby poultry is 
slaughtered, eviscerated, canned, salted, stuffed, rendered, boned, 
cut up, or otherwise manufactured or processed'' (See 9 CFR 381.1). 
The term ``processing'' is defined in the egg products regulations 
as ``manufacturing of egg products, including breaking eggs or 
filtering, mixing, blending, pasteurizing, stabilizing, cooling, 
freezing or drying, or packaging or repackaging egg products at 
official plants''(See 9 CFR 590.5).
    \2\ As discussed below, currently, when products imported into 
the U.S. are repackaged or otherwise reprocessed in a FSIS-inspected 
facility, they are deemed and treated as domestic product for 
labeling purposes. Therefore, such imported products would be 
subject to the proposed regulatory requirements.
    \3\ All federally inspected and passed products are eligible to 
receive export certification by FSIS if all FSIS and foreign country 
requirements listed in the FSIS Export Library have been met. 
Certain deviations from domestic product requirements or label 
policies are allowed, in accordance with 9 CFR 312.8, 322.1 through 
322.5, 350.3(b), 362.2(b), 381.104 through 381.111, and 590.402.
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    Establishments producing products covered by USDA's Agricultural 
Marketing Service's (AMS) Country of Origin (COOL) mandatory labeling 
regulations (see 7 CFR parts 60 and 65) would still need to comply with 
COOL requirements (see 9 CFR 317.8(b)(40)). AMS' COOL requires 
retailers, such as full-line grocery stores, supermarkets and club 
warehouse stores, to notify their customers with information regarding 
the source of certain foods.\4\ Should this rule become final, any 
FSIS-regulated product that is also a commodity subject to COOL 
requirements must continue to comply with those requirements.
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    \4\ The FSIS-regulated products that are also COOL covered 
commodities are ground and muscle cuts of lamb, chicken and goat (7 
CFR 65.135) and Siluriformes fish (7 CFR 60.106). COOL covered 
commodities meeting the regulatory definition of ``processed food 
item(s)'' are exempted from mandatory country of origin labeling (7 
CFR 60.119 and 7 CFR 65.220).
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    Section IV below contains an analysis of the proposed rule's 
expected costs and benefits, an explanation of the assumptions, 
alternative scenarios, and the expected impact on small businesses. The 
requirements in this proposed rule, if finalized, are estimated to 
result in a one-time relabeling cost for industry, annual recordkeeping 
costs, and one-time market testing costs. Combined and annualized 
assuming a 7-percent discount rate over 10 years, the total estimated 
industry cost would be $3 million. The proposed regulatory definitions 
of voluntary U.S.-origin claims align the meaning of those claims with 
consumers' understandings of the information conveyed by those claims, 
information that is valued by consumers. The proposed changes to the 
``Product of USA'' voluntary labeling policy are intended to prevent 
false or misleading U.S.-origin labeling (see 9 CFR 317.8(a), 
381.129(b), 590.411(f)(1)).\5\ This would reduce the market failures 
associated with incorrect and asymmetric information. The proposed 
changes would benefit consumers by matching the voluntary authorized 
``Product of USA'' and ``Made in the USA'' label claims with the 
definition that consumers likely expected (i.e., product derived from 
animals born, raised, slaughtered, and processed in the United States). 
If finalized, the proposed changes would allow consumers to make 
informed purchasing decisions, resulting in an increase in consumer 
benefits and preventing market failures as shoppers will be better able 
to choose products according to their preferences.
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    \5\ FSIS has similar authority under the AMA concerning products 
receiving voluntary inspection services, as the statute grants the 
Secretary authority to ``inspect, certify, and identify the class, 
quality, quantity, and condition of agricultural products when 
shipped or received in interstate commerce, under such rules and 
regulations as the Secretary of Agriculture may prescribe, including 
assessment and collection of such fees as will be reasonable and as 
nearly as may be to cover the cost of the service rendered, to the 
end that agricultural products may be marketed to the best 
advantage, that trading may be facilitated, and that consumers may 
be able to obtain the quality product which they desire, except that 
no person shall be required to use the service authorized by this 
subsection'' (7 U.S.C. 1622(h)(1)).
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II. Background

    FSIS is responsible for ensuring that meat, poultry, and egg 
products are safe, wholesome, and properly labeled and packaged. The 
Agency administers a regulatory program for meat products under the 
Federal Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.), for poultry 
products under the Poultry Products Inspection Act (PPIA) (21 U.S.C. 
451 et seq.), and for egg products under the Egg Products Inspection 
Act (EPIA) (21 U.S.C. 1031 et seq.). FSIS also provides voluntary 
reimbursable inspection services under the Agricultural Marketing Act 
(AMA) (7 U.S.C. 1622 and 1624) for eligible products not requiring 
mandatory inspection under the FMIA, PPIA, and EPIA. These voluntary 
reimbursable inspection services include activities related to export 
certification (9 CFR 350.3(b), 362.2(b), and 592.20(d)); products 
containing meat and poultry that are not under mandatory FSIS 
inspection (9 CFR 350.3(c) and 362.2(a)); voluntary inspection of 
certain non-amenable species (9 CFR part 352, subpart A and 9 CFR part 
362); and voluntary inspection of rabbits (9 CFR part 354). The 
requirements proposed under this rule for the two voluntary authorized 
claims ``Product of USA'' and ``Made in the USA'' and voluntary 
qualified U.S.-origin claims would apply to all products subject to 
FSIS' mandatory inspection or that are inspected under the voluntary 
inspection services provided by FSIS.\6\ Establishments would not need 
to include these claims on the label, but if they chose to include 
them, they would need to meet the requirements in this proposed rule.
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    \6\ On January 18, 2023, FSIS finalized a rule to allow generic 
approval of the labels of voluntarily-inspected products (88 FR 
2798). In 2020, FSIS finalized a rule to allow generic approval for 
egg product labels (85 FR 68640, October 29, 2020; see 9 CFR 
590.412).
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    Under the mandates of the FMIA, PPIA, and EPIA, any meat, poultry, 
or egg product is misbranded if its labeling is false or misleading in 
any particular (21 U.S.C. 601(n)(1); 21 U.S.C. 453(h)(1); 21 U.S.C. 
1036(b)). In particular, no product or any of its wrappers, packaging, 
or other containers shall bear any false or misleading marking, label, 
or other labeling and no statement, word, picture, design, or device 
which conveys any false impression or gives

[[Page 15292]]

any false indication of origin or quality or is otherwise false or 
misleading shall appear in any marking or other labeling (9 CFR 
317.8(a)), 381.129(b), 590.411(f)(1)).\7\
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    \7\ FSIS has similar authority under the AMA concerning products 
receiving voluntary inspection services, as the statute grants the 
Secretary authority to ``inspect, certify, and identify the class, 
quality, quantity, and condition of agricultural products when 
shipped or received in interstate commerce, under such rules and 
regulations as the Secretary of Agriculture may prescribe, including 
assessment and collection of such fees as will be reasonable and as 
nearly as may be to cover the cost of the service rendered, to the 
end that agricultural products may be marketed to the best 
advantage, that trading may be facilitated, and that consumers may 
be able to obtain the quality product which they desire, except that 
no person shall be required to use the service authorized by this 
subsection'' (7 U.S.C. 1622(h)(1)).
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    As discussed below, and as explained in the FSIS Food Standards and 
Labeling Policy Book (``Food Standards and Labeling Policy Book''),\8\ 
FSIS-regulated products that are derived from animals that may have 
been born, raised, and slaughtered in another country but are minimally 
processed in the United States may currently be labeled as ``Product of 
USA.'' The United States imports live animals, carcasses, and other 
products that are incorporated into U.S. preparation and marketing of 
meat products.
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    \8\ Available at: https://www.fsis.usda.gov/guidelines/2005-0003.
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    However, this policy may be causing false impressions about the 
origin of FSIS-regulated products in the U.S. marketplace. In July 
2021, Secretary Vilsack announced that USDA would comprehensively 
review the current ``Product of USA'' labeling policy for products that 
FSIS regulates.\9\ The review was intended to help the Agency determine 
what the ``Product of USA'' label means to consumers. To make sure that 
customers had access to accurate and clear labels, Executive Order 
14036, Promoting Competition in the American Economy (86 FR 36987, 
July, 14, 2021) called for a rulemaking on voluntary ``Product of USA'' 
labeling for meat products.
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    \9\ USDA Release No. 0151.21, ``USDA Announces Efforts to 
Promote Transparency in Product of the USA Labeling,'' available at: 
https://www.usda.gov/media/press-releases/2021/07/01/usda-announces-efforts-promote-transparency-product-usa-labeling.
    In his announcement, Secretary Vilsack cited the U.S. Federal 
Trade Commission (FTC) final rule, thereafter published on July 14, 
2021, related to ``Made in USA'' and other unqualified U.S.-origin 
claims on products sold in the United States (86 FR 37022). In the 
final rule preamble, the FTC noted FSIS' authority to regulate 
labels on meat products sold at retail pursuant to the FMIA, as well 
as the Agency's plans to initiate rulemaking to address potential 
marketplace confusion concerning products of purported U.S. origin.
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A. Statutory and Regulatory Requirements for the Labeling of FSIS-
Regulated Products

Labeling of Products Generally
    As discussed above, under certain circumstances, FSIS regulations 
allow product labels that bear all required labeling features and 
comply with the Agency's labeling regulations to be ``generically 
approved'' (9 CFR 412.2(a)(1)). Labels that are generically approved 
may be used in commerce without prior submission to the Agency for 
approval. FSIS inspection program personnel (IPP) perform inspection 
tasks at establishments to verify that generically approved labels 
comply with labeling requirements.\10\ Official establishments, 
therefore, do not need to submit generically approved labels to FSIS 
for evaluation. Current FSIS regulations allow all geographic and 
country of origin claims on labels of FSIS-regulated products, 
including ``Product of USA'' and similar U.S.-origin claims (9 CFR 
412.2(b)), to be generically approved.
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    \10\ For example, under FSIS Directive 7221.1, Rev. 3 (January 
31, 2023), IPP are directed to routinely include generic labels as 
part of the general labeling inspection tasks. These tasks, which 
include factual statement verification, take place approximately 
five to six times monthly in each inspected establishment or 
facility.
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Labeling of Imported Products
    FSIS' regulations require that the immediate container of imported 
meat, poultry, and eggs products to bear the name of the country of 
origin, preceded by the words ``Product of'' (9 CFR 327.14, 381.205, 
590.950). If such imported products are intended to be sold at retail, 
the original packaging with the ``product of country'' labeling must 
remain with the product. However, if these products are repackaged or 
otherwise reprocessed in a federally inspected facility, they are 
currently deemed and treated as domestic product for both mandatory and 
voluntary labeling purposes.\11\ Therefore, because such products are 
treated as domestic products for labeling purposes, under current FSIS 
labeling policy for U.S.-origin claims, they no longer are required to 
meet FSIS' mandatory origin labeling requirements for imported products 
(see Food Standards and Labeling Policy Book).
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    \11\ In a 1989 final rule clarifying these provisions, FSIS 
stated that ``[o]nce product offered for entry has been reinspected 
by FSIS inspectors and the official mark of inspection has been 
applied, FSIS considers that such product has been `entered' into 
the United State and, therefore, is the regulatory equivalent of 
domestic product.'' (54 FR 41045, October 5, 1989).
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B. Current FSIS Policy on ``Product of USA'' and Similar Label Claims

    The Food Standards and Labeling Policy Book provides guidance 
addressed to how manufacturers may prepare meat and poultry product 
labels that are truthful and not misleading. The Food Standards and 
Labeling Policy Book guidance for labeling products with ``Product of 
USA'' or similar claims currently states that labeling of a meat or 
poultry product may bear the phrase under one of two conditions, (1) if 
the country to which the product is exported requires this phrase, and 
the product is processed in the United States, or (2) the product is 
processed in the United States.\12\ This U.S.-origin labeling guidance 
applies to ``Product of USA'' claims made with respect to multi-
ingredient FSIS-regulated products, as well as single ingredient FSIS-
regulated products. Thus, currently, a product may bear the ``Product 
of USA'' claim if the product is processed in the United States, or if 
the country to which the product is exported requires it and the 
product is processed in the United States.
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    \12\ The FSIS poultry regulations at 9 CFR 381.1 define 
``process'' as ``a means to conduct any operation or combination of 
operations, whereby poultry is slaughtered, eviscerated, canned, 
salted, stuffed, rendered, boned, cut up, or otherwise manufactured 
or processed.'' The FSIS meat regulations at 9 CFR 301.2 include 
``processed'' in the definition of ``prepared'' (i.e., 
``slaughtered, canned, salted, rendered, boned, cut up, or otherwise 
manufactured or processed.'') The FSIS egg products regulations at 9 
CFR 590.5 define ``processing'' as the means of ``manufacturing of 
egg products, including breaking eggs or filtering, mixing, 
blending, pasteurizing, stabilizing, cooling, freezing or drying, or 
packaging or repackaging egg products at official plants.''
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    In May 2003, a revision to the Food Standards and Labeling Policy 
Book cancelled an April 1985 FSIS policy memorandum that advised that a 
label of a FSIS product could include the ``Product of USA'' claim if 
it could be demonstrated that all ingredients having a bearing on 
consumer preference, such as meat, vegetables, fruits, and dairy 
products, were of domestic origin.

C. Petitions for Rulemaking

    USDA has received three petitions from industry associations 
regarding the origin of meat products bearing the ``Product of USA'' 
label claim, each requesting that FSIS formally revise its Food 
Standards and Labeling Policy Book guidance for such claims.
Organization for Competitive Markets (OCM) and the American Grassfed 
Association (AGA) Petition
    In June 2018, FSIS received a petition, submitted on behalf of OCM 
and AGA, requesting that FSIS amend the Food

[[Page 15293]]

Standards and Labeling Policy Book to state that meat products may be 
labeled as ``Product of USA'' only if ingredients having a bearing on 
consumer preference, such as meat, vegetables, fruits, and dairy 
products, are of domestic origin.\13\ The petition asserted that the 
Agency's current policy has resulted in labeling that is misleading to 
consumers because it allows imported meat that is reprocessed in the 
United States to be labeled as ``Product of USA.'' The petition further 
asserted that when imported meat products that have been further 
processed in an official U.S. establishment are labeled as ``Product of 
USA,'' consumers that prefer domestic meat cannot make an informed 
choice because the labeling disguises the true origin of the product. 
Finally, the petition asserted that the current policy also caused 
financial harm to U.S. family farmers and independent ranchers by 
giving an unfair market advantage to companies that further process 
imported meat.
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    \13\ FSIS Petition 18-05, Petition for Change to the FSIS 
Standards and Labeling Policy Book on ``Product of U.S.A.'' (June 
12, 2018), available at: https://www.fsis.usda.gov/federal-register/petitions/petition-change-fsis-standards-and-labeling-policy-book-product-usa.
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    FSIS received 2,593 public comments on the OCM/AGA petition.\14\ A 
majority of the comments expressed support for the petition, stating 
that the use of ``Product of USA'' labeling should be limited to 
products from livestock that were born, raised, and slaughtered in the 
United States. Most were comments submitted by individual consumers, 
farmers, and ranchers, as well as trade associations representing these 
groups, labor unions, and animal welfare advocacy organizations. 
Several comments stated that the term ``Product of USA'' implies that 
the product was derived from livestock that were born, raised, and 
slaughtered in the United States and, therefore, is misleading when 
applied to imported products that have been further processed in an 
official U.S. establishment. Many of the comments stated that the 
current policy gives certain companies that import foreign grass-fed 
beef an unfair economic advantage.
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    \14\ Comments submitted on Petition 18-05 available at: https://www.regulations.gov/document/FSIS-2018-0024-0001/comment.
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    Comments from other cattle producer trade associations, meat 
processor trade associations, Canadian and Mexican livestock producer 
trade associations, and the Canadian and Mexican governments did not 
support the petition. These comments stated that FSIS' ``Product of 
USA'' labeling policy has never been limited to livestock born, raised, 
and slaughtered in the United States. Comments from the Canadian and 
Mexican governments noted that the Canadian and U.S. livestock 
industries, and the Mexican and U.S. cattle industries, are highly 
integrated, and that both Canada and Mexico export a significant number 
of live cattle into the United States each year for feeding, slaughter, 
and processing. The comments expressed concerns about changes in 
labeling that could potentially disrupt these integrated livestock 
supply chains. No other foreign entities submitted comments.
    On March 26, 2020, FSIS responded to the OCM/AGA petition, stating 
that the Agency had decided to initiate rulemaking to define the 
conditions under which the labeling of meat products would be permitted 
to bear voluntary claims that indicate that the product is of U.S. 
origin, such as ``Product of USA'' or ``Made in the USA.'' \15\ FSIS 
stated that, after considering the petition and the public comments 
received on the petition, the Agency concluded that its current 
labeling policy, which permits meat and poultry products that were 
derived from animals that may have been born, raised, and slaughtered 
in another country but processed in the United States to be labeled as 
``Product of USA,'' may be causing confusion in the marketplace, 
particularly with respect to certain imported meat products, and that 
the Agency intended to propose that such labeling be limited to meat 
products derived from livestock that were slaughtered and processed in 
the United States.
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    \15\ Response to Petition 18-05 available at: https://www.fsis.usda.gov/sites/default/files/media_file/2020-07/18-05-fsis-final-response-032620.pdf.
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United States Cattlemen's Association (USCA) Petition
    In October 2019, USCA submitted a petition requesting that FSIS 
amend the Food Standards and Labeling Policy Book to provide that any 
beef product voluntarily-labeled as ``Made in the USA,'' ``Product of 
the USA,'' ``USA Beef'' or in any other manner that suggests that the 
origin is the United States, be derived from cattle that have been 
born, raised, and slaughtered in the United States.\16\ As with the 
OCM/AGA petition, the USCA petition asserted that FSIS' current policy 
is misleading because it allows imported meat products processed in the 
United States to be labeled as ``Product of USA.'' The petition further 
asserted that consumers expect beef products labeled as ``Product of 
USA'' to be from cattle that were born, raised, and slaughtered in the 
United States. Finally, the petition referenced several studies that, 
according to the petition, demonstrated that U.S. consumers are 
interested in knowing the country of origin of beef products and are 
willing to pay a premium for meat from animals born, raised, and 
slaughtered in the United States.
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    \16\ FSIS Petition 19-05, Petition for the Imposition of Beef 
Labeling Requirements to Address ``Made in USA'' Claims (October 23, 
2019), available at: https://www.fsis.usda.gov/federal-register/petitions/petition-imposition-beef-labeling-requirements-address-made-usa-claims.
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    FSIS received 111 public comments on the USCA petition.\17\ A 
majority of the comments expressed support for the petition, stating 
that the use of ``Product of USA'' labeling should be limited to 
products from livestock that were born, raised, and slaughtered in the 
United States. Most were comments submitted by individual consumers, 
farmers, and ranchers, as well as trade associations representing these 
groups. Several comments stated that the term ``Product of USA'' 
implies that the product was derived from livestock that were born, 
raised, and slaughtered in the United States and, therefore, is 
misleading when applied to imported products that have been further 
processed in the United States. Comments from some cattle producer 
trade associations, meat processor trade associations, Canadian and 
Mexican livestock producer trade associations, and the Canadian and 
Mexican governments did not support the petition. Similar to the 
comments on the OCM/AGA petition, these comments stated that FSIS' 
``Product of USA'' labeling policy has never been limited to livestock 
born, raised, and slaughtered in the United States. Comments from the 
Canadian and Mexican governments noted again that the Canadian and U.S. 
livestock industries, and the Mexican and U.S. cattle industries, are 
highly integrated, and that both Canada and Mexico export a significant 
number of live cattle into the United States each year for feeding, 
slaughter, and processing. The comments expressed concerns about 
measures that could potentially disrupt these integrated livestock 
supply chains. No other foreign entities submitted comments.
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    \17\ Comments submitted on Petition 19-05 available at: https://www.regulations.gov/document/FSIS-2019-0024-0001/comment.
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    As with FSIS' response to the OCM/ACA petition, on March 26, 2020, 
FSIS responded to the USCA petition to state that the Agency had 
decided to initiate rulemaking to define the conditions under which the 
labeling of meat products would be permitted to bear

[[Page 15294]]

voluntary claims that indicate that the product is of U.S. origin, such 
as ``Product of USA'' or ``Made in the USA.'' \18\ Also, similar to the 
response to the OCM/ACA petition, FSIS stated the Agency's conclusion 
that its current labeling policy may be causing confusion in the 
marketplace, particularly with respect to certain imported meat 
products, and that the Agency intended to propose that such labeling be 
limited to meat products derived from livestock that were slaughtered 
and processed in the United States.
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    \18\ Response to Petition 19-05 available at: https://www.fsis.usda.gov/sites/default/files/media_file/2021-04/19-05-fsis-final-response-032620.pdf.
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National Cattlemen's Beef Association (NCBA) Petition
    After FSIS considered and responded to the OCM/AGA and USCA 
petitions in March 2020, NCBA submitted a petition in June 2021 
requesting that FSIS initiate rulemaking to amend the Agency's labeling 
regulations to eliminate the broadly applicable ``Product of USA'' 
label claim but to allow for other label claims.\19\ Specifically, the 
petition requested that FSIS initiate rulemaking to amend its 
regulations to state that single ingredient beef products or ground 
beef may be labeled as ``Processed in the USA,'' provided that the 
label displays all mandatory features and is not otherwise false or 
misleading. Further, the petition requested that FSIS amend its 
regulations to state that other claims relating to U.S. origin, 
production, or processing of meat products are not eligible for generic 
approval. Similar to the AGA/OCM and USCA petitions, the NCBA petition 
generally asserted that the Agency's current policy on U.S.-origin 
labeling furthers consumer confusion as to whether products with U.S.-
origin label claims are derived from animals born, raised, and 
slaughtered in the United States.
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    \19\ FSIS Petition 21-02, Petition for Notice and Comment 
Rulemaking on ``Product of USA'' Labels (June 10, 2021), available 
at: https://www.fsis.usda.gov/sites/default/files/media_file/2021-06/21-02-NCBA-06102021.pdf.
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    FSIS received 261 public comments on the NCBA petition.\20\ Most 
comments did not support the petition, stating that replacing the 
current ``Product of USA'' labeling policy with a ``Processed in the 
USA'' label would not resolve the issue of consumer confusion about the 
origin of beef products. Many comments instead suggested that changing 
the definition of ``Product of USA'' to require that the beef product 
be derived from cattle born, raised, and slaughtered in the United 
States would better resolve consumer confusion. Other comments 
supported adding a specific ``born in the United States'' requirement 
to the Agency's current ``Product of USA'' labeling requirements for 
beef products. These comments were mostly submitted by individual 
consumers, ranchers, and those in communities supported by the cattle 
industry. Comments expressed concern about consumer choice and some 
stated an interest in supporting American cattle ranchers. Other 
comments submitted by trade associations and advocacy groups related to 
the cattle industry stated that a change to the definition of ``Product 
of USA'' would better address the issues raised in the petition. 
Additionally, the Canadian and Mexican governments each provided public 
comments that did not support the petition and focused on maintaining 
integrated livestock supply chains between the United States and their 
respective cattle markets. Each government specifically noted their 
interest in cooperation with any change to U.S. labeling practices as 
to avoid disruptions in the supply chain. No other foreign entities 
submitted comments.
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    \20\ Comments submitted for Petition 21-02 available at: https://www.regulations.gov/document/FSIS-2021-0018-0001/comment.
---------------------------------------------------------------------------

    The publication of this proposed rule serves as the Agency's 
response to the issues raised by all three related petitions.

D. Consumer Survey

    To gather additional information as part of FSIS' comprehensive 
review of the current voluntary ``Product of USA'' label claim, on 
February 1, 2022, FSIS requested approval for a new information 
collection to conduct a consumer web-based survey on ``Product of USA'' 
labeling on beef and pork products (87 FR 5455). On June 13, 2022, the 
U.S. Office of Management and Budget (OMB) approved the survey, and on 
August 14, 2022, RTI International completed administration of the 
survey (``RTI survey''). The final report \21\ and a copy of the survey 
itself can be found on FSIS' website at: https://www.fsis.usda.gov/sites/default/files/media_file/documents/Product_of_USA_Consumer_Survey_Final_Report.pdf.
---------------------------------------------------------------------------

    \21\ Cates, S. et al. 2022. Analyzing Consumers' Value of 
``Product of USA'' Label Claims. Contract No. GS-00F-354CA. Order 
No. 123-A94-21F-0188. Prepared for Andrew Pugliese.
---------------------------------------------------------------------------

    The target population for the survey was the U.S. general 
population of adults (18 years or older) who speak English or Spanish, 
were primarily responsible for the grocery shopping in their household, 
and had purchased beef or pork in the last six months. The survey was 
administered over the web,\22\ using a probability-based panel designed 
to be representative of the U.S. adult population and whose panel 
members were recruited using address-based sampling and weighting 
procedures to provide nationally representative estimates. The use of 
web-based data collection expedited the timeliness of data collection 
and allowed the study to reach a more diverse study population. 
Approximately 4,842 individuals took the survey, including 311 who 
completed the survey in the Spanish language.
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    \22\ Selected panelists without internet access were provided 
with free internet access and a tablet computer, if needed.
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    The study used beef and pork products. In addition, the study 
considered high-cost beef products (i.e., steak) and lower-cost beef 
products (i.e., ground beef) to capture any potential differences in 
responses for higher- and lower-cost products.
    The survey addressed three primary research questions: (1) Do 
consumers notice the ``Product of USA'' label claim?; (2) Do consumers 
understand the current ``Product of USA'' definition and other ``USDA'' 
labeling (e.g., ``USDA Choice'') as it relates to country of origin?; 
and (3) How much are consumers willing to pay for meat products bearing 
the ``Product of USA'' label claim for the current definition and 
potential revised definitions (e.g., if the meat were from an animal 
that was born, raised, slaughtered, and processed in the United 
States)?
    To investigate the first question, respondents completed a limited 
time exposure (LTE) task to determine whether consumers notice the 
``Product of USA'' label claim (i.e., to indicate saliency). 
Respondents were randomly assigned to view one of four mock products 
and were exposed to a mock product for a limited time (20 seconds), 
then asked to list what labeling features they recalled (unaided), and 
then asked to answer a series of recognition questions to indicate 
whether they saw specific images and phrases, including the ``Product 
of USA'' claim (i.e., aided recognition questions). Results from the 
LTE's unaided recall questions show that 9 to 31 percent of 
participants correctly recalled seeing the ``Product of USA'' claim. 
Results from aided recognition questions show that 70 to 80 percent of 
participants correctly recalled seeing the ``Product of USA'' claim. 
The range in responses was dependent on the format of the claim. 
Results from the aided recognition questions also show

[[Page 15295]]

that participants correctly recalled seeing the ``Product of USA'' 
label claim more often than other claims mentioned in the survey (i.e., 
``no antibiotics and no added hormones,'' an image of the USDA mark of 
inspection, ``100% grass fed,'' ``sustainably raised,'' ``eco-
friendly,'' an image of the USDA organic seal, and ``certified humane 
raised and handled'').
    To investigate the second question, respondents answered questions 
that surveyed their understanding of the meaning of ``Product of USA'' 
label claim as it relates to product country of origin (e.g., born, 
raised, slaughtered, and processed). The survey asked the question, 
``To your knowledge, what does the `Product of USA' label claim on meat 
products mean?'' Four options with various combinations of ``born,'' 
``raised,'' ``slaughtered,'' and ``processed'' in the United States 
were presented to participants. Of the responses, 47 percent of 
participants believed that the label indicates that the animal was 
born, raised, slaughtered, and the meat then processed, in the United 
States. Only 16 percent of participants selected the current meaning of 
the label claim (i.e., the meat was processed in the United States.)
    To investigate the third question, respondents were asked questions 
to measure their intrinsic value or willingness to pay (WTP) for 
products bearing the ``Product of USA'' label claim for the current 
definition and potential revised definitions. This approach captures 
the strength of preference (i.e., potential price premium) for changes 
in attributes. Specifically, this approach helps FSIS determine which 
U.S. preparation and processing steps, if any, are valued by the 
average consumer. The results suggest that participants were willing to 
pay more for a product derived from animals when all preparation and 
processing steps occurred in the United States--born, raised, 
slaughtered, and processed--than for product when fewer steps occurred 
in the United States. FSIS has interpreted these results to access the 
value the average consumer derives from different definitions of 
``Product of USA.''
    The combined survey results suggest that consumers value ``Product 
of USA'' label claims, as understood by consumers as indicating U.S. 
born, raised, slaughtered, and processed, but that the current FSIS 
``Product of USA'' label claim is misleading to a majority of consumers 
as to the actual origin of FSIS-regulated products. Based on the survey 
results, adopting the proposed definition of the ``Product of USA'' 
claim to mean the product was derived from an animal born, raised, 
slaughtered, and processed in the United States would enhance consumer 
purchasing decisions, result in truthful, less misleading ``Product of 
USA'' labels, and decrease false impressions about the origin of FSIS-
regulated products in the marketplace. In particular, it would allow 
consumers to better comparison shop between products based on the value 
that consumers place on products fully raised and processed in the 
United States. Further discussion of survey results can be found in the 
benefits section of the Economic Impact Analysis of the proposed rule 
in Section IV.

III. Proposed Rule

    In consideration of the petitions, the public comments submitted in 
response to the petitions, and the results of the Agency's 2022 
consumer survey, FSIS has concluded that adherence to the current 
``Product of USA'' labeling policy guidance may be leading to 
misleading labeling and causing confusion in the marketplace. The 
evidence reviewed by FSIS demonstrates that the current FSIS ``Product 
of USA'' labeling guidance does not conform to consumers' conception of 
what ``Product of USA'' claims mean on FSIS-regulated products. 
Therefore, the Agency is proposing regulatory requirements for when the 
labeling of FSIS-regulated products may bear voluntary claims 
indicating that the product, or a component of the product's 
preparation and processing, is of U.S. origin to ensure such labels do 
not mislead or confuse consumers. If finalized, the proposed 
requirements could affect the labeling of products that currently claim 
to be of U.S. origin but are prepared and processed from imported 
products shipped to the United States. For example, meat products 
derived from live animals that are imported into the United States for 
feeding or for immediate slaughter would no longer be allowed to bear 
the authorized claims ``Product of USA'' or ``Made in the USA.'' 
Similarly, imported meat products reprocessed in the United States 
would no longer be allowed to bear the authorized claims ``Product of 
USA'' or ``Made in the USA'', as currently allowed under the Food 
Standards and Labeling Policy Book. The proposed requirements would not 
affect the labeling of products exported to foreign countries. However, 
these products could still bear a qualified origin label claim, as 
discussed below, if all FSIS requirements, and foreign country 
requirements listed in the FSIS Export Library, have been met.
    FSIS is proposing to amend its labeling regulations at 9 CFR part 
412, Label Approval. Under the proposed provisions, the two authorized 
claims ``Product of USA'' and ``Made in the USA'' may be displayed on 
labels of FSIS-regulated products only if the product is derived from 
animals born, raised, slaughtered, and processed in the United States. 
FSIS is also proposing that claims other than the two authorized claims 
``Product of USA'' and ``Made in the USA'' may be displayed on labels 
to indicate the U.S.-origin component of a product's preparation and 
processing. All U.S.-origin label claims that are not authorized claims 
are known as ``qualified claims.'' Qualified claims would need to 
include a description on the package of how the product compares to the 
regulatory criteria for the two authorized claims, ``Product of USA'' 
and ``Made in the USA,'' including all preparation and processing steps 
that occurred in the United States upon which the claim is made. For 
example, ``Sliced and packaged in the United States using imported 
pork'' could be a U.S.-origin qualified claim. FSIS is proposing that 
companies using a voluntary claim of U.S. origin on labels of FSIS-
regulated products must, as with the use of all origin claims, maintain 
documentation to demonstrate that the product complies with criteria of 
the proposed regulatory requirements.
Scope of Allowed Claims
    FSIS is proposing to allow two authorized voluntary label claims to 
indicate that a FSIS-regulated product is of U.S. origin: ``Product of 
USA'' and ``Made in the USA.'' The Agency is proposing to allow the use 
of these two authorized claims only if the labeled FSIS-regulated 
product is derived from animals born, raised, slaughtered, and 
processed in the United States, or, in the case of a multi-ingredient 
product, if: (1) All FSIS-regulated components of the product are 
derived from animals born, raised, slaughtered, and processed in the 
United States; and (2) All additional ingredients of the product, other 
than spices and flavorings, are of domestic origin (i.e., all 
preparation and processing steps of the ingredients are completed in 
the United States).
    Label claims other than ``Product of USA'' or ``Made in the USA'' 
that indicate that a preparation and processing component of a FSIS-
regulated product is of U.S. origin would be allowed (``qualified'' 
label claims), but such claims would need to

[[Page 15296]]

be positioned near a description on the package of how the product 
compares to the regulatory criteria for the two authorized claims, 
``Product of USA'' and ``Made in the USA,'' including all preparation 
and processing steps that occurred in the United States upon which the 
claim is made. For example, a FSIS-regulated cured pork product package 
could include the qualified claim ``Sliced and packaged in the United 
States using imported pork.'' FSIS notes that in the case of the FSIS-
regulated products that are also COOL covered commodities,\23\ U.S.-
origin label claims must comply with COOL requirements for the 
identification of country of origin, including production steps 
occurring in each country for commodities of multiple origins.\24\
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    \23\ The FSIS-regulated products that are also COOL covered 
commodities are ground and muscle cuts of lamb, chicken and goat (7 
CFR 65.135) and Siluriformes fish (7 CFR 60.106). COOL covered 
commodities meeting the regulatory definition of ``processed food 
item(s)'' are exempted from mandatory country of origin labeling (7 
CFR 60.119 and 7 CFR 65.220).
    \24\ 7 CFR 60.200 and 7 CFR 65.300.
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    FSIS requests comments on what criteria the Agency should establish 
for the use of qualified claims--claims that do not include ``Product 
of USA'' and ``Made in the USA''--to indicate that a preparation and 
processing component of a FSIS-regulated product is of U.S. origin.
U.S. State and Region Claims
    Under the proposed rule, products labeled with voluntary authorized 
claims referring to the origin of a U.S. state or region (e.g., ``Made 
in North Carolina'') would need to meet the proposed regulatory 
criteria for the two voluntary authorized claims ``Product of USA'' and 
``Made in the USA'' (i.e., born, raised, slaughtered, and processed in 
the state or region). Voluntary qualified claims referring to the state 
or region origin of a component of a FSIS-regulated product would need 
to include a description on the package of all preparation and 
processing steps that occurred in the state or region upon which the 
claim is made (e.g., ``Packaged in Michigan.'') Currently, state and 
region claims may be generically approved for use on FSIS-regulated 
product labels if they are not misleading and they comply with the 
requirement under 9 CFR 317.8(b)(1) to properly identify the state in 
which the product was prepared on the product label. Should the 
proposed rule become final, FSIS will issue revised labeling guidance 
on the use of voluntary authorized and qualified state and region 
claims.
Generic Approval of U.S.-Origin Claims
    Under the proposed rule, both the two authorized claims ``Product 
of USA'' and ``Made in the USA'' and qualified claims of U.S. origin 
would continue to be eligible for generic approval under 9 CFR 
412.2(a)(1). As with all generically approved labels, labels bearing 
U.S.-origin claims would be subject to routine IPP inspection tasks to 
verify that the labels comply with the regulatory criteria.
Scope of Products: Single Ingredient and Multi-Ingredient
    The proposed rule would apply to all products subject to FSIS 
mandatory inspection or eligible for voluntary inspection services 
provided by the Agency. FSIS has proposed criteria for both single and 
multi-ingredient products to ensure that the claim is consistent for 
all FSIS-regulated products that use the ``Product of USA'' or ``Made 
in the USA'' claims. Single ingredient products bearing the authorized 
label claims ``Product of USA'' or ``Made in the USA'' would need to be 
derived from animals born, raised, slaughtered, and processed in the 
United States. Multi-ingredient products would be allowed to bear the 
authorized label claims ``Product of USA'' or ``Made in the USA'' if: 
(1) All FSIS-regulated components of the product are derived from 
animals born, raised, slaughtered, and processed in the United States; 
and (2) All additional ingredients, other than spices and flavorings, 
are of domestic origin (i.e., all preparation and processing steps of 
the ingredients are completed in the United States). This proposed 
requirement for multi-ingredient products would align with the April 
1985 FSIS policy memorandum, discussed above, that ``Product of USA'' 
labeling of a product would be misleading unless all the product's 
ingredients having a bearing on consumer preference are of domestic 
origin.
    FSIS requests comments on whether the Agency should adopt an 
alternative requirement for multi-ingredient products that bear the 
authorized claims ``Product of USA'' or ``Made in the USA.''
FSIS Labeling and AMS Mandatory COOL
    As discussed above, this proposed rule concerning voluntary U.S.-
origin labeling for FSIS-regulated products does not conflict with AMS 
COOL requirements. Further, the proposed rule would not alter or affect 
any other federal statute or regulation relating to country of origin 
labeling requirements. FSIS' current labeling regulations require that 
a country of origin statement on the label of any meat ``covered 
commodity'' as defined in 7 CFR part 65, subpart A, that is to be sold 
by a ``retailer,'' as defined in 7 CFR 65.240, must comply with the 
COOL requirements in 7 CFR 65.300 and 65.400.\25\ Should this rule 
become final, any commodity that is subject to COOL mandatory country 
of origin labeling must continue to comply with those requirements.
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    \25\ 9 CFR 317.8(b)(40). FSIS notes that the Agency's proposed 
regulatory requirements would concern voluntary label claims 
displayed on FSIS-regulated products, while COOL requires mandatory 
country of origin disclosure in the form of a placard, sign, label, 
sticker, band, twist tie, pin tag, or other format to consumers of 
covered commodities (See 7 CFR 60.300(a) and 65.400(a)).
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Required Documentation To Support Claims
    Official establishments and facilities choosing to use an 
authorized or qualified U.S.-origin claim on labels of FSIS-regulated 
products would need to maintain documentation to demonstrate that the 
product complies with criteria of the proposed regulatory requirements, 
and that the claim is not false or misleading, as the regulations 
require for the use of all generically approved labels (9 CFR 
412.2(a)(1)). FSIS would accept existing documentation to demonstrate 
compliance with one or more of the proposed regulatory requirements. 
For example, an establishment or facility seeking to use a voluntary 
claim of U.S. origin may already maintain supplier sheets from the farm 
that raised a source animal as part of its labeling recordkeeping 
pursuant to existing FSIS regulations or participation in another 
federal program (e.g., AMS COOL). An establishment or facility may 
maintain one or more of the following documentation types to support a 
claim that the product, or a component of the product, is of U.S. 
origin.
     Labels that bear the voluntary authorized claims ``Product 
of USA'' or ``Made in the USA'' under the proposed new regulatory 9 CFR 
412.3(a) and (b) may have:
    [cir] A written description of the controls used in the birthing, 
raising, slaughter, and processing of the source animals, and for 
multi-ingredient products the preparation and processing of all 
additional ingredients other than spices and flavorings, to ensure that 
each step complies with the proposed regulatory criteria;
    [cir] A written description of the controls used to trace and 
segregate,

[[Page 15297]]

from the time of birth or processing through packaging and wholesale or 
retail distribution, source animals, all additional ingredients other 
than spices and flavorings, and resulting products that comply with the 
proposed regulatory criteria from those that do not comply; or
    [cir] A signed and dated document describing how the product is 
prepared and processed to support that the claim is not false or 
misleading.
     Labels that bear voluntary, qualified U.S.-origin claims 
under the proposed new regulatory 9 CFR 412.3(c) may have:
    [cir] A written description of the controls used in each applicable 
preparation and processing step of source animals, all additional 
ingredients other than spices and flavorings, and resulting products to 
ensure that the U.S.-origin claim complies with the proposed regulatory 
criteria. The described controls may include those used to trace and 
segregate, during each applicable preparation or processing step, 
source animals, all additional ingredients other than spices and 
flavorings, and resulting products that comply with the U.S.-origin 
claim from those that do not comply; or
    [cir] A signed and dated document describing how the qualified 
U.S.-origin claim regarding the source of the preparation and 
processing component is not false or misleading.
    The proposed rule does not specify the types of documentation that 
must be maintained to demonstrate compliance with the proposed 
regulatory criteria (e.g., bills of lading, shipping manifests, load 
sheets, grower records). Should the rule become final, FSIS would issue 
guidance, as needed, on recommended documentation to maintain 
compliance with U.S.-origin labeling requirements.\26\ FSIS requests 
comments on whether the Agency should require, or provide guidance on, 
specific types of documentation that companies using a voluntary label 
claim of U.S. origin would need to maintain to demonstrate that the 
product complies with criteria of the proposed regulatory requirements. 
Further, FSIS requests comments on whether the Agency should allow or 
require third party certification for the use of authorized and 
qualified voluntary U.S.-origin label claims.
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    \26\ For an example of current FSIS guidance on documentation 
typically needed to support label claims, see Food Safety and 
Inspection Service Labeling Guideline on Documentation Needed to 
Substantiate Animal Raising Claims for Label Submission (December 
2019), available at: https://www.fsis.usda.gov/guidelines/2019-0009.
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Compliance Date and Transition Period
    Generally, FSIS uses a uniform compliance date for new labeling 
regulations.\27\ Should the proposed rule become final, on the 
applicable compliance date, FSIS would consider as compliant only 
labels bearing the two authorized claims ``Product of USA'' and ``Made 
in the USA'' for FSIS-regulated products that comply with the proposed 
codified definition for this claim. Also on the applicable compliance 
date, FSIS would consider as compliant only labels bearing qualified 
claims of U.S. origin for FSIS-regulated products that comply with the 
proposed codified requirements for the use of such claims.
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    \27\ See FSIS Uniform Date for Food Labeling Regulations Final 
Rule (69 FR 74405, December 14, 2004).
---------------------------------------------------------------------------

IV. Executive Orders 12866 and 13563

    Executive Orders (E.O.) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This proposed rule has been designated an ``economically significant'' 
regulatory action by the Office of Information and Regulatory Affairs 
under section 3(f)(1) of E.O. 12866. Accordingly, the proposed rule has 
been reviewed by the Office of Management and Budget under E.O. 12866.

A. Economic Impact Analysis

Need for the Rule
    Under current FSIS policy, products with a ``Product of USA'' or 
similar claim must, at a minimum, have been processed in the United 
States.\28\ For instance, currently, the beef in a package of ground 
beef can come from the U.S., from another country or countries, or from 
both depending on where each step of the preparation of the beef takes 
place, and still bear the claim ``Product of USA'' even if the ground 
beef is merely processed in the United States. Similarly, currently, 
cattle born, raised, slaughtered, and processed in another country may 
be labeled ``Product of USA'' if the meat was merely further processed 
in the United States.
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    \28\ U.S. Department of Agriculture, Food Safety and Inspection 
Service. Food Standards and Labeling Policy Book. 2005. https://www.fsis.usda.gov/guidelines/2005-0003 (Accessed on January 31, 
2023).
---------------------------------------------------------------------------

    This policy may cause false impressions about the origin of FSIS-
regulated products in the U.S. marketplace, potentially causing market 
failures. FSIS has received three petitions from industry associations, 
each requesting that USDA address this confusion by revising this 
policy.
    The Agency received almost 3,000 public comments in response to 
these petitions, the majority of which supported altering this policy. 
FSIS also conducted a consumer web-based survey \29\ to gather 
information on the American consumers' understanding of the meaning of 
the ``Product of USA'' claim. Based on the evidence reviewed by FSIS, 
FSIS has concluded that the current ``Product of USA'' labeling policy 
guidance may not reflect consumers' common understanding of what 
``Product of USA'' claims mean on FSIS-regulated products. Therefore, 
the Agency is proposing regulatory requirements for when the labeling 
of FSIS-regulated products may bear voluntary claims indicating that 
the product, or a component of the product's preparation or processing, 
is of U.S. origin in order to ensure such labels do not mislead or 
confuse consumers as to the actual origin of FSIS-regulated products.
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    \29\ Cates, S. et al. 2022. Analyzing Consumers' Value of 
``Product of USA'' Labeling Claims. Contract No. GS-00F-354CA. Order 
No. 123-A94-21F-0188. Prepared for Andrew Pugliese.
---------------------------------------------------------------------------

Baseline for Evaluation of Costs and Benefits
    If finalized, the proposed changes may require businesses 
voluntarily using U.S.-origin claims on meat, poultry, and egg product 
labels to update their labels and conduct increased recordkeeping. FSIS 
requests comments on how such a change may impact an establishment's 
cost. FSIS used Label Insight \30\ to estimate the number of single and 
multi-ingredient meat, poultry, and egg product retail labels and the 
number with an associated U.S.-origin claim.\31\
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    \30\ Label Insight, accessed July 2022. Label Insight is a 
market research firm that collects data on over 80 percent of food, 
pet, and personal care products in the U.S. retail market. Data are 
collected mostly from public web sources and company submissions. 
See https://www.labelinsight.com/our-difference/ for more 
information.
    \31\ Based on FSIS' labeling expertise, foodservice labels of 
products sold to hotels, restaurants, and institutions generally do 
not have a U.S.-origin claim. Therefore, the cost analysis did not 
include foodservice labels.

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[[Page 15298]]

    This analysis identified two types of U.S.-origin claims: (1) 
Authorized claims, e.g., ``Product of USA'' or ``Made in USA''; and (2) 
Qualified claims, e.g., ``Raised and Slaughtered in the USA.'' Some of 
these labels with claims described above are also subject to COOL 
regulations regarding mandatory labeling depending on the commodity 
type.\32\ To avoid double counting labels, packages with multiple U.S.-
origin claims, e.g., ``Product of USA'' on the back display and ``Born 
and Raised in America'' on the front display, were put into the 
``Qualified'' category.
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    \32\ As of 2016, the FSIS-regulated species and products which 
are covered commodities under the COOL regulations include muscle 
cuts of lamb, chicken, and goat; ground lamb, chicken, and goat; and 
wild and farmed Siluriformes fish.
---------------------------------------------------------------------------

    Based on Label Insight data, FSIS identified approximately 98,374 
meat, poultry, and egg product retail labels. FSIS then searched the 
list of 98,374 labels and identified approximately 11,469 with a U.S.-
origin type claim, or approximately 12 percent. To account for the 
possibility of over- or under-estimating the number of relevant labels, 
this analysis included a lower and upper bound by adjusting the mid-
point label estimate minus or plus 10 percent, respectively. As such, 
FSIS estimates the number of meat, poultry, and egg product retail 
labels ranges from 88,537 to 108,211 labels and the number of labels 
with a U.S.-origin claim ranges from 10,322 to 12,616, table 1.\33\
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    \33\ To find the meat, poultry, and egg product labels, we first 
queried the Label Insight data for labels that Label Insight 
identified as not being in FDA's jurisdiction. We also searched for 
the terms ``beef'', ``pork,'' and ``chicken'' in the database of 
labels that Label Insight identified as products under FDA 
jurisdiction and noted the labels that were in FSIS' jurisdiction. 
We also examined lamb, mutton, and goat labels but found the number 
of unique labels were de minimis compared to the number of labels 
found in the other commodity groups with larger domestic 
consumption. The label counts include multi- and single ingredient 
meat, poultry, and egg products.

                                Table 1--Meat, Poultry and Egg Product Labels \3\
----------------------------------------------------------------------------------------------------------------
                                                                                U.S.-Origin claims
                                                    FSIS labels  -----------------------------------------------
                                                                  Authorized \1\   Qualified \2\       Total
----------------------------------------------------------------------------------------------------------------
Low bound.......................................          88,537           9,035           1,287          10,322
Mid-point.......................................          98,374          10,039           1,430          11,469
Upper bound.....................................         108,211          11,043           1,573          12,616
----------------------------------------------------------------------------------------------------------------
\1\ Includes ``Product of USA'' or ``Made in USA.''
\2\ Includes detailed U.S.-origin claims, such as ``Born and raised in USA'', and U.S. State and region claims.
\3\ The lower and upper bound label estimates are minus or plus 10 percent of the mid-point label estimates.

Expected Costs of the Proposed Action
    The proposed rule is expected to result in quantified industry 
relabeling, recordkeeping, and market testing costs, which combined are 
estimated to cost $3 million, annualized at a 7 percent discount rate 
over 10 years. Details of these cost estimates are provided below. 
There is the potential that this analysis has not captured all of the 
relevant costs associated with this proposed rule, such as costs from 
voluntary changes in production practices. The Agency is seeking 
comment on any such omitted costs.
Relabeling Costs
    Under this proposed rule, FSIS-regulated single ingredient and 
multi-ingredient products that are not derived from animals born, 
raised, slaughtered, and processed in the United States would no longer 
be able to bear the authorized claims of ``Product of USA'' or ``Made 
in the USA.'' These products would have to be relabeled by either 
removing the authorized voluntary claim or using another claim, such as 
a qualified claim. For example, a FSIS-regulated cured meat product 
package from an animal not born and raised in the U.S. might replace an 
authorized claim of ``Product of USA'' with a qualified claim, ``Sliced 
and packaged in the United States using imported pork.'' Products with 
a qualified claim might also have to be relabeled to remove or modify 
the claim, depending on the facts and circumstances of the particular 
situation.
    To estimate the costs associated with relabeling products that 
would no longer meet the proposed requirements for using their existing 
labels, this analysis utilized the 2014 Food and Drug Administration 
(FDA) Label Cost Model (FDA Label Cost Model) \34\ and 2022 Label 
Insight data. The relabeling costs depend on the number of labels 
required to change, whether the change can be coordinated with a 
planned label update, and the type of label change (extensive, major, 
or minor).
---------------------------------------------------------------------------

    \34\ Muth, M., Bradley, S., Brophy, J., Capogrossi, K., 
Coglaiti, M., & Karns, S. (2015). 2014 FDA labeling cost model. U.S. 
Food and Drug Administration.
---------------------------------------------------------------------------

    As described in the Baseline for Evaluation of Costs and Benefits 
section, FSIS estimated the number of labels with a U.S.-origin claim. 
FSIS estimated that a portion of the labels with U.S.-origin claims 
would modify or remove the claim in response to this proposed rule as 
some labels already meet the proposed and current labeling criteria. 
However, it is difficult to estimate the number of claims that would 
change if the proposed rule is finalized, due to data limitations. To 
account for this uncertainty, FSIS chose a conservative and broad 
range, with low, mid, and upper bound estimates, to approximate the 
percentage of product labels that may be relabeled, table 2. The low, 
mid, and upper bound estimates were calculated by multiplying the low, 
mid, and upper bound estimated number of labels with a U.S.-origin 
claim by 25, 50, and 75 percent, respectively. FSIS requests comments 
on these assumptions, including whether the prevalence of label change 
would differ depending on whether existing label claims are Authorized 
or Qualified.

                             Table 2--Number of FSIS Labels That Would Be Relabeled
----------------------------------------------------------------------------------------------------------------
                                                                           Labels with U.S.-    Count of labels
                                Estimate                                     origin claims        with changes
----------------------------------------------------------------------------------------------------------------
Low bound..............................................................                10,322              2,581
Mid-point..............................................................                11,469              5,735

[[Page 15299]]

 
Upper bound............................................................                12,616              9,462
----------------------------------------------------------------------------------------------------------------

    The number of label changes that can be coordinated with a planned 
change depends on the compliance time industry has to update labels 
after a final rule. FSIS anticipates the compliance period would be 
somewhere between 12 and 36 months. Assuming a 24-month compliance 
period, 100 percent of branded products label updates would be 
coordinated with a planned label change. However, for private (store 
brand) labels, only 26 percent would have a coordinated label change, 
and 74 percent would be uncoordinated.\35\ This is because private 
labels change less frequently than branded labels. This analysis 
assumed approximately 25 percent of labels are private and 75 percent 
are branded.\36\ Therefore, an estimated 81.5 percent of the labels 
requiring an update as a result of the rule would have a coordinated 
change and 18.5 percent would have an uncoordinated change.\37\ Based 
on the FDA Label Cost Model, the label changes that would result from 
the rule are considered minor. We are asking for comment on whether 
some of these changes should be major label changes. The FDA Label Cost 
Model defines a minor label change as one where only one color is 
affected and the label does not need to be redesigned, such as changing 
an ingredient list or adding a toll-free number.\38\
---------------------------------------------------------------------------

    \35\ Muth, M., Bradley, S., Brophy, J., Capogrossi, K., 
Coglaiti, M., & Karns, S. (2015). 2014 FDA Labeling Cost Model. U.S. 
Food and Drug Administration. Table 3-1. Assumed Percentages of 
Changes to Branded and Private-Label UPCs that Cannot be Coordinated 
with a Planned Change.
    \36\ Based on private and branded label estimates for all FSIS 
labels in the FSIS' Proposed rule, ``Revision of Nutrition Facts 
Labels for Meat and Poultry Products and Updating Certain Reference 
Amounts Customarily Consumed'', Published January 19, 2017. https://www.regulations.gov/document/FSIS-2014-0024-0041.
    \37\ For coordinated changes: (75% branded labels x 100% 
coordinated given 24-month compliance period) + (25% private labels 
x 26% coordinated given a 24-month compliance period) = 81.5% of 
FSIS labels can be coordinated with a planned change.
    \38\ Muth, M., Bradley, S., Brophy, J., Capogrossi, K., 
Coglaiti, M., & Karns, S. (2015). 2014 FDA Labeling Cost Model. U.S. 
Food and Drug Administration. Page 2-9. A major change requires 
multiple color changes and label redesign, such as adding a facts 
panel or modifying the front of the package.

               Table 3--Total Number of FSIS Labels That Would Be Relabeled and the Type of Change
----------------------------------------------------------------------------------------------------------------
                                                Total                                  Minor          Minor
                  Estimate                    labels \1\    Private      Branded    coordinated   uncoordinated
----------------------------------------------------------------------------------------------------------------
Low bound..................................        2,581          645        1,936        2,103              477
Mid-point..................................        5,735        1,434        4,301        4,673            1,061
Upper bound................................        9,462        2,365        7,097        7,712            1,750
----------------------------------------------------------------------------------------------------------------
\1\ Totals may not sum due to rounding.

    The estimates in the FDA Label Cost Model were updated to account 
for inflation using 2021 producer price indices for the material and 
consultation costs and 2021 wage rates \39\ for the labor hours. The 
cost estimates in 2021 U.S. dollars are: $848 per label for a minor 
coordinated change (with a range of $205 to $1,797), and $4,829 per 
label for a minor uncoordinated change (with a range of $2,142 to 
$8,738). Combined, the mean estimated relabeling cost is $1.2 million, 
annualized at a 7 percent discount rate over 10 years, table 4.
---------------------------------------------------------------------------

    \39\ Muth, M., Bradley, S., Brophy, J., Capogrossi, K., 
Coglaiti, M., & Karns, S. (2015). 2014 FDA Labeling Cost Model. U.S. 
Food and Drug Administration. Table 4-7. Hourly Wage Rates for 
Activities Conducted in Changing Product Labels, 2014.

                Table 4--Labeling Costs With a 24-Month Compliance Period in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                                         Type                 Lower         Mean        Upper
----------------------------------------------------------------------------------------------------------------
Coordinated...............................  Minor........................         $0.4           $4        $13.9
Uncoordinated.............................  Minor........................          1.0          5.1         15.3
                                                                          --------------------------------------
    Total Cost[caret]\1\..................  .............................          1.5          9.1         29.2
                                                                          --------------------------------------
    Annualized Cost (3% DR, 10 Year)......  .............................          0.2          1.0          3.3
                                                                          --------------------------------------
    Annualized Cost (7% DR, 10 Year)......  .............................          0.2          1.2          3.9
----------------------------------------------------------------------------------------------------------------
\1\ Totals may not sum due to rounding.

Recordkeeping Costs
    Currently, businesses using labels to designate the U.S.-origin 
production or preparation component of a product must maintain records 
to support the U.S.-origin claim.\40\ Currently, U.S.-origin claims are 
approved under a generic label approval system. Under the generic 
approval system, businesses that make products with a U.S.-origin claim 
are currently estimated to take 15 minutes on average to gather their 
records, 20 times per year.\41\ FSIS estimated that the provisions in 
this proposed rule, if finalized, would require businesses to spend an 
additional 20 minutes to gather their

[[Page 15300]]

records, 20 times per year, per respondent. FSIS acknowledges that it 
would take substantially more time to document some U.S. origin claims, 
such as description of preparation or processing steps, or for U.S.-
origin claims on multi-ingredient products. In some cases, 
establishments could elect to either remove the U.S. origin claim from 
the label or make an alternative claim. FSIS requests comments on how 
such a change may impact an establishment's cost and benefits. Due to 
data limitations, FSIS used brand names associated with a U.S.-origin 
claim found in Label Insight data to estimate the number of businesses. 
FSIS estimated that approximately 1,575 brands or businesses have 
products with U.S.-origin claims and would have additional 
recordkeeping costs if the proposed rule were finalized. This analysis 
assumed this recordkeeping would be completed by an operations manager 
with an hourly estimated cost of $98.50 at the median and a range of 
wages from ($71.84 to $154.78).\42\ As such, the estimated annual cost 
per business is approximately $656. The estimated annual cost to all 
1,575 businesses is approximately $1 million, table 5.
---------------------------------------------------------------------------

    \40\ Businesses with complicated supply lines are not expected 
to use an authorized claim.
    \41\ Generic proposed rule: 85 FR 56544, September 14, 2020.
    \42\ The hourly cost includes a wage rate of $49.25 and a 
benefits and overhead factor of 2. Estimates obtained from the 
Bureau of Labor Statistics May 2021, National Industry-Specific 
Occupational Employment and Wage Estimates, for Management 
Occupations 50th (25th-75th percentile) (Occupational Code 11-0000), 
Management Occupations (bls.gov).

                           Table 5--Recordkeeping Annual Costs in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                            Annual number    Minutes per
                Businesses                  of responses      response        Lower         Mid         Upper
----------------------------------------------------------------------------------------------------------------
1,575                                                  20              20         $0.8         $1.0         $1.6
                                          ----------------------------------------------------------------------
    Annualized Cost (3% DR, 10 Year).....  ..............  ..............          0.8          1.0          1.6
                                          ----------------------------------------------------------------------
    Annualized Cost (7% DR, 10 Year).....  ..............  ..............          0.8          1.0          1.6
----------------------------------------------------------------------------------------------------------------

Market Testing
    To assess the marketability of potential label changes, the FDA 
Label Cost Model includes information on five types of market tests: 
\43\ focus group, discrimination test, central location test, 
descriptive test, and in-home test. The mean cost for these market 
tests ranges from $7,211 to $36,570 per formula.\44\ The FDA Label Cost 
Model reports that minor label changes are unlikely to incur any market 
testing costs.\45\ However, if this proposed rule were to finalize, 
some businesses may still want to conduct market testing to assess how 
consumers would respond to a label change. FSIS estimates that 25 to 75 
percent of businesses that have products with U.S.-origin claims would 
conduct a focus group test on one product formula. FSIS assumed that 
not every brand would conduct market testing because not every brand 
would make a change, and such testing is expensive. Additionally, the 
label changes are expected to be minor, and typically, brands do not 
conduct market research for minor changes. The estimated cost for a 
focus group test is $7,440 per formula (with a range of $7,048 to 
$7,831) in 2021 dollars.\46\ Combined, the mean estimated market 
testing cost is $0.8 million, annualized at a 7 percent discount rate 
over 10 years, table 6. The Agency is seeking comment on the 
assumptions used for the market testing costs.
---------------------------------------------------------------------------

    \43\ Mean estimates from the 2014 FDA Label Cost Model were 
updated to 2021 dollars for inflation. Muth, M., Bradley, S., 
Brophy, J., Capogrossi, K., Coglaiti, M., & Karns, S. (2015). 2014 
FDA Labeling Cost Model. U.S. Food and Drug Administration. Page 4-
43. Table 4-10. Estimated Market Testing Costs in the Labeling Cost 
Model, 2014 ($/Formula).
    \44\ Note, a single formula may be represented by more than one 
UPC because of multiple package sizes or types of packaging. Based 
Table 4-3 in the FDA Label Cost model, on average, there are 
approximately 1.17 UPCS per formula for food in NAICS categories 
311612, 311615, and 311613.
    \45\ Muth, M., Bradley, S., Brophy, J., Capogrossi, K., 
Coglaiti, M., & Karns, S. (2015). 2014 FDA Labeling Cost Model. U.S. 
Food and Drug Administration. Page 4-32. For minor labeling changes, 
ATC [analytical testing costs] and MTC [market testing costs] are 
likely to be 0.
    \46\ Muth, M., Bradley, S., Brophy, J., Capogrossi, K., 
Coglaiti, M., & Karns, S. (2015). 2014 FDA labeling cost model. U.S. 
Food and Drug Administration. Page 4-43.

                              Table 6--Market Testing Costs in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                                                              Lower         Mean        Upper
----------------------------------------------------------------------------------------------------------------
Total Businesses with Market Testing.....................................          394          788        1,181
                                                                          --------------------------------------
    Total Cost \1\.......................................................         $2.8         $5.9         $9.2
                                                                          --------------------------------------
    Annualized Cost (3% DR, 10 Year).....................................         $0.3         $0.7         $1.0
                                                                          --------------------------------------
    Annualized Cost (7% DR, 10 Year).....................................         $0.4         $0.8         $1.2
----------------------------------------------------------------------------------------------------------------
\1\ Totals may not sum due to rounding.

Cost Summary
    Under the provisions in this proposed rule, if finalized, industry 
would likely incur a one-time relabeling cost and annual recordkeeping 
costs. Combined and annualized assuming a 7 percent discount rate over 
10 years, total industry cost is $3.0 million, table 7.

[[Page 15301]]



                                   Table 7--Total Costs in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                Cost type                                     Lower         Mean        Upper
----------------------------------------------------------------------------------------------------------------
Relabeling...............................................................         $1.5         $9.1        $29.2
Recordkeeping............................................................          0.8          1.0          1.6
Market Testing...........................................................          2.8          5.9          9.2
                                                                          --------------------------------------
    Annualized Cost (3% DR, 10 Year).....................................          1.3          2.7          5.9
                                                                          --------------------------------------
    Annualized Cost (7% DR, 10 Year).....................................          1.4          3.0          6.7
----------------------------------------------------------------------------------------------------------------
Totals may not sum due to rounding.

Expected Benefit of the Proposed Rule
    The RTI survey results suggest that the current ``Product of USA'' 
label claim is misleading to a majority of consumers, and consumers 
believe the ``Product of USA'' claim means the product was made from 
animals born, raised, and slaughtered, and the meat then processed, in 
the United States.
    From the RTI survey, about 56 percent of survey participants 
answering the multiple choice question ``To your knowledge, what does 
the Product of USA label claim on meat products mean?'' thought a 
``Product of USA'' claim meant the animal was at least raised and 
slaughtered and the meat then processed in the United States. Of these 
participants, 47 percent also believed that the ``Product of USA'' 
claim indicates that the animal must also be born in the United States, 
Table 8. Just 16 percent of participants selected the current FSIS 
policy definition, which only requires that the product be processed in 
the United States; the animals can be born, raised, and slaughtered in 
another country. Based on the survey results, the current FSIS 
``Product of USA'' labeling guidance does not appear to provide 
consumers with accurate origin information. These findings suggests 
that the current ``Product of USA'' label claim is misleading to a 
majority of consumers. This proposed rule would adopt a requirement for 
the ``Product of USA'' claim that would convey more accurate U.S. 
origin information and thus reduce consumer confusion in the 
marketplace.

               Table 8--Product of USA Label Claim Meaning
------------------------------------------------------------------------
 Survey Question: To your knowledge, what does the Product of USA label
                      claim on meat products mean?
-------------------------------------------------------------------------
                                                              Percent of
                                                              responses
------------------------------------------------------------------------
(A) Must be made from animals born, raised, and slaughtered           47
 and the meat then processed in the USA....................
(B) Must be made from animals raised and slaughtered and               9
 the meat then processed in the USA; the animals can be
 born in another country...................................
(C) Must be made from animals slaughtered in the USA; the              8
 animals can be born and raised in another country.........
(D) Must be processed in the USA; the animals can be born,            16
 raised, and slaughtered in another country................
(E) Not sure/don't know....................................           21
------------------------------------------------------------------------
Numbers may not sum due to rounding.

    The results from the RTI survey also reveal that ``Product of USA'' 
claims are noticeable and important to consumers. Results from the 
survey's aided recognition questions show that 70 to 80 percent of 
eligible consumers correctly recalled seeing the ``Product of USA'' 
claim. Results from the aided recognition questions also showed that 
participants correctly recalled the ``Product of USA'' label claim more 
often than other claims. Results from the survey's unaided recall 
questions show that about 1 in 3 eligible consumers reported seeing a 
``Product of USA'' claim when it was with a U.S. flag icon, while about 
1 in 10 eligible consumers reported seeing a ``Product of USA'' claim 
when it was in plain text included in a list of other claims. These 
results suggest that consumers frequently notice the ``Product of USA'' 
label claim. Based on these results, FSIS assumes consumers are 
interested in ``Product of USA'' claims.
    Finally, the RTI study also includes estimates of consumers' 
willingness to pay (WTP) for different U.S.-origin claims using two 
discrete choice experiments (DCEs). The first DCE asked survey 
respondents if they were willing to pay more for products with a 
``Product of USA'' claim compared to the same product, but with no 
origin claim. The second DCE asked survey respondents if they were 
willing to pay different amounts for different definitions on the 
spectrum of born, raised, slaughtered, and processed in the United 
States. Each DCE had three product-subgroups: ground beef, NY strip 
steak, and pork tenderloin. The results from the first DCE show that 
consumers are willing to pay more for products with a ``Product of 
USA'' claim, in comparison to similar products without this claim, 
table 9. Specifically, results comparing products with a ``Product of 
USA'' claim to ones without such a claim reveal an increase in WTP per 
pound of $1.69 for ground beef; $1.71 for pork tenderloin; and $3.21 
for NY strip steak, table 9. These results were found to be consistent 
across income groups.
    The results from the second DCE show that in comparison to products 
that were processed in the United States, consumers have the highest 
marginal WTP for products that were born, raised, slaughtered, and 
processed in the United States, table 9. Specifically, results show a 
marginal WTP per pound of $1.15 for ground beef; $1.65 for pork 
tenderloin; and $3.67 for NY strip steak, for products that were born, 
raised, slaughtered, and processed in the United States, table 9.

[[Page 15302]]



                       Table 9--Marginal WTP for Product of U.S.-Origin Claims, per Pound
----------------------------------------------------------------------------------------------------------------
                                                                                            Pork       NY strip
                                                                           Ground beef   tenderloin     steak
----------------------------------------------------------------------------------------------------------------
DCE 1: *
    Product of USA.......................................................        $1.69        $1.71        $3.21
DCE 2: **
    Slaughtered and Processed in the USA.................................         0.30         0.50         1.24
    Raised, Slaughtered, and Processed in the USA........................         0.86         1.24         2.86
    Born, Raised, Slaughtered, and Processed in the USA..................         1.15         1.65         3.67
----------------------------------------------------------------------------------------------------------------
* Comparing products with a Product of USA claim versus products without this claim (when no definition was
  provided).
** Compared to product with a ``Processed in the USA'' claim.

    Consumer WTP estimates, such as those obtained by the RTI survey, 
rely on stated preferences and may not reflect actual purchasing 
references in real life situations as the survey respondents do not 
have their own money on the line. To complement the survey study, FSIS 
also used a hedonic price model to estimate implicit price premiums of 
U.S.-origin claims on uniform-weight ground beef products. See Appendix 
A \47\ for the detailed analysis on this hedonic price model. The 
hedonic price model compared a variable for origin claims linked to the 
U.S. only and a variable for multi-country origin claims linked to the 
U.S. plus other countries, to similar products without any U.S.-origin 
claims \48\ on ground beef products. The model found a price premium of 
2.5 percent or 10 cents per pound for claims exclusive to U.S. origin. 
The model found an even higher price premium of 4.2 percent or 16 cents 
per pound for multi-country origin claims referring to the U.S. and 
other countries. These implicit price premiums suggest consumers may 
currently pay more for ground beef products with origin information, 
including origin claims linked to the U.S. plus other countries, 
compared to products without any U.S. origin claims. Based on these 
results, the estimated price premium for a ground beef product with a 
U.S.-only origin claim would not decline if the origin claim is 
modified to include the U.S. and other countries. For context, it 
should be noted that the estimated price premiums were less than the 
premiums for other common marketing claims on ground beef products, 
such as organic, grass-fed, pasture raised, and no antibiotic and no 
hormone. These marketing claims yielded higher price premiums, ranging 
from $0.66 to $0.83 per pound, which could suggest that some producers 
may opt for these types of marketing claims rather than an origin 
claim. FSIS assumes this relationship holds across other FSIS regulated 
product types and is seeking comment on this assumption.
---------------------------------------------------------------------------

    \47\ A copy of Appendix A can be found on FSIS' website at: 
https://www.fsis.usda.gov/sites/default/files/media_file/documents/Product_of_USA_Appendix.pdf.
    \48\ Products without any U.S.-origin claims includes products 
with no country of origin claim or other country origin claim such 
as ``Product of Australia.''
---------------------------------------------------------------------------

    This data from the RTI survey and implicit price premium analysis 
suggests that a false or misleading ``Product of USA'' claim would 
economically harm consumers, who look to such labeling to convey 
accurate information about the U.S. origin of the production and 
preparation of the labeled product consistent with consumers' 
understanding of what that label means to them. Without more accurate 
labeling, consumers may be paying more for products that do not 
actually conform to their expectations, thus distorting the market.
Benefits Summary
    The proposed ``Product of USA'' regulatory definitions of voluntary 
U.S.-origin claims align the meaning of those claims with consumers' 
understandings of the information conveyed by those claims, information 
that is valued by consumers. The proposed changes to the ``Product of 
USA'' voluntary labeling policy are intended to reduce false or 
misleading U.S. origin labeling (See 9 CFR 317.8(a)), 381.129(b), 
590.411(f)(1)).\49\ This would reduce the market failures associated 
with incorrect and imperfect information. The proposed changes would 
benefit consumers by matching the voluntary authorized ``Product of 
USA'' and ``Made in the USA'' label claims with the definition that 
consumers' likely expected, i.e., as product being derived from animals 
born, raised, slaughtered, and processed in the United States.
---------------------------------------------------------------------------

    \49\ FSIS has similar authority under the AMA concerning 
products receiving voluntary inspection services, as the statute 
grants the Secretary authority to ``inspect, certify, and identify 
the class, quality, quantity, and condition of agricultural products 
when shipped or received in interstate commerce, under such rules 
and regulations as the Secretary of Agriculture may prescribe, 
including assessment and collection of such fees as will be 
reasonable and as nearly as may be to cover the cost of the service 
rendered, to the end that agricultural products may be marketed to 
the best advantage, that trading may be facilitated, and that 
consumers may be able to obtain the quality product which they 
desire, except that no person shall be required to use the service 
authorized by this subsection'' (21 U.S.C. 1622(h)(1)).
---------------------------------------------------------------------------

    The benefits for this proposed rule have not been quantified due to 
data, including the divergence between estimated values and what would 
be changed by the proposed rule, and the limitations (some of which are 
discussed in Appendix A) associated with the associated surveys, LTE 
experiments, DCEs, and hedonic price modeling. However, if finalized, 
the proposed changes would allow consumers to make informed purchasing 
decisions, resulting in an increase in consumer benefit and preventing 
market distortions. We request comments on the potential consumer and 
industry benefits of the proposed rule.
Alternative Regulatory Approaches
    We considered the following three alternatives in the analysis for 
this proposed rule:
     Alternative 1: Taking no regulatory action by continuing 
with the existing labeling requirements.
     Alternative 2: The proposed rule.
     Alternative 3: The proposed rule, extended compliance 
period.

[[Page 15303]]



           Table 10--Comparison of the Considered Alternatives
------------------------------------------------------------------------
         Alternative                Benefits                Cost
------------------------------------------------------------------------
1--No Action................  No benefit.           No relabeling costs
                               Misinformation        or increase in
                               remains.              recordkeeping
                                                     costs.
2--The Proposed Rule........  More accurate         $3 million total
                               information           costs. Relabeling
                               conveyed on labels    cost $1.2 million.
                               with U.S-origin       Recordkeeping cost
                               claims.               $1.0 million.
                                                     Market testing cost
                                                     $0.8 million.
3--Extended Compliance        Reduced benefits      $2.5 million total
 Period.                       because labels with   costs. Relabeling
                               U.S.-origin claims    cost $0.6 million.
                               would change at a     Recordkeeping cost
                               slower rate and       $1.0 million.
                               potentially include   Market testing cost
                               information that      $0.8 million.
                               may mislead
                               consumers for an
                               extended period.
------------------------------------------------------------------------
Note: Costs are in millions of dollars and annualized at the 7 percent
  discount rate over 10 years. Numbers may not sum due to rounding.

Alternative 1--Take No Regulatory Action (Baseline)
    FSIS considered keeping the current regulations and taking no 
action. Consumers will be worse off absent the proposed action. While 
``no action'' means the manufacturers currently labeling their products 
with U.S.-origin claims do not have to relabel or increase record-
keeping activities, and therefore would not incur additional costs; the 
Agency would fail to address the false impression regarding U.S. origin 
conveyed by the current ``Product of USA'' labeling requirement. The 
current claim does not align with consumers' interpretations of what 
the ``Product of USA'' label claim means.
    Therefore, the Agency rejects this alternative.
Alternative 2--The Proposed Rule
    Under this proposed rule, the authorized claims, ``Product of USA'' 
and ``Made in the USA'', would only be permitted on the labels of FSIS-
regulated products derived from animals born, raised, slaughtered, and 
processed in the United States. U.S.-origin label claims other than 
``Product of USA'' or ``Made in the USA'' would need to include a 
description on the package of how the product compares to the 
regulatory ``Product of USA'' and ``Made in the USA'' definition, 
including all preparation and processing steps that occurred in the 
United States upon which the claim is made (as described above). 
Consumers would benefit from the proposed changes to the regulations to 
address the false impression and asymmetric information associated with 
current U.S.-origin claims.
    This is the Agency's preferred alternative.
Alternative 3--The Proposed Rule, Extended Compliance Period
    Alternative 3 would extend the compliance period to 42 months. This 
alternative reduces both costs and benefits. As shown in Table 11, 
assuming an extended compliance period of 42-months would provide 
industry sufficient time to coordinate all required label changes, 
subsequently reducing annualized relabeling costs by about $0.5 
million, as compared to assuming a 24-month compliance period. 
Recordkeeping and market testing costs would remain the same as 
alternative 2.
    However, during this 42-month period, there would be labels with 
U.S.-origin claims that conform to the current requirements as well as 
labels that conform to the proposed new requirements for an extended 
period. Having U.S.-origin labels that have different, with a mix of 
old and new, definitions in the marketplace for a prolonged period 
would increase consumer confusion and market failures. Benefits to 
consumers would be delayed as labels with U.S.-origin claims would 
change at a slower rate. Therefore, the Agency rejects this 
alternative.

                             Table 11--Total Costs 42-Month Compliance, in Millions
----------------------------------------------------------------------------------------------------------------
                                Cost type                                     Lower         Mean        Upper
----------------------------------------------------------------------------------------------------------------
Relabeling, One-time.....................................................         $0.5         $4.9        $17.0
Recordkeeping, Recurring.................................................          0.8          1.0          1.6
Market Testing, One-time.................................................          2.8          5.9          9.2
                                                                          --------------------------------------
    Annualized Cost (3% DR, 10 Year).....................................          1.1          2.3          4.6
                                                                          --------------------------------------
    Annualized Cost (7% DR, 10 Year).....................................          1.2          2.5          5.1
----------------------------------------------------------------------------------------------------------------

Regulatory Flexibility Act Assessment
    The FSIS Administrator has made a preliminary determination that 
this proposed rule, if finalized, would not have a significant economic 
impact on a substantial number of small entities in the U.S., as 
defined by the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).\50\ 
FSIS used brand names found in Label Insight data as a proxy for 
businesses. Although Label Insight does not have company or size 
information associated with the Universal Product Codes (UPCs), Label 
Insight does include brand names for labels. FSIS assumed brands with 
fewer than 50 UPCs associated with FSIS-regulated products were small 
businesses.
---------------------------------------------------------------------------

    \50\ Small Businesses are based on the United States Small 
Business Administration (SBA) size standards. The SBA defines a 
small business in NAICS code 311611--Animal (except Poultry) 
Slaughter and NAICS code 311612-Meat Processed from Carcasses as 
having less than 1,000 employees. A business in NAICS code 311615--
Poultry Processing has a small business standard of less than 1,250 
employees and NAICS code Seafood Product Preparation and Packaging 
has a less than 750-employee standard.
    United States Small Business Administration (SBA), Table of 
Small Business Standards Matched to North American Industry 
Classification System Codes. Effective February 26, 2016. Available 
at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf.
---------------------------------------------------------------------------

    FSIS estimated that the proposed rule would impact 1,349 brands or 
small businesses. Combined, these 1,349 small businesses have roughly 
4,000 labels with U.S.-origin claims. As described above, only a 
percentage of these labels may need to change as a result of the rule. 
FSIS requests comments on the

[[Page 15304]]

number of small businesses affected and potential impact.
    FSIS estimated that between 1,000 and 3,000 labels from small 
business may need changes if the proposed rule is finalized, assuming 
25, 50, and 75 percent of labels would need to be changed. The average 
one-time cost estimate for minor label changes is between $848 and 
$4,829 per label. The expected one-time relabeling cost for 81.5 
percent of labels are for minor coordinated changes and are 
approximately $848 per label. The expected one-time relabeling cost for 
18.5 percent of labels are for minor uncoordinated changes, at 
approximately $4,829 per label.\51\
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    \51\ Mean estimates from the 2014 FDA Label Cost Model were 
updated to 2021 dollars for inflation. Muth, M., Bradley, S., 
Brophy, J., Capogrossi, K., Coglaiti, M., & Karns, S. (2015). 2014 
FDA labeling cost model. U.S. Food and Drug Administration.
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    In addition, businesses would have increased recordkeeping costs. 
This analysis assumed this recordkeeping would be completed by an 
operations manager with an estimated hourly cost of $98.50 at the 
median and a range of wages from ($71.84 to $154.78) for 20 minutes, 20 
times per year (please see recordkeeping section above for more 
information).\52\
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    \52\ The hourly cost includes a wage rate of $49.25 and a 
benefits and overhead factor of 2. Estimates obtained from the 
Bureau of Labor Statistics May 2021, National Industry-Specific 
Occupational Employment and Wage Estimates, for Management 
Occupations 50th (25th-75th percentile) (Occupational Code 11-0000), 
Management Occupations (bls.gov).
---------------------------------------------------------------------------

    Small businesses may also incur market testing costs. FSIS 
estimated that 674, with a range between 337 to 1,012, small businesses 
may conduct market testing if the proposed rule is finalized, assuming 
25, 50, and 75 percent of the 1,349 small businesses conduct market 
testing. The expected mid-point one-time market testing costs for those 
small businesses that choose to conduct market testing is $7,440 in 
2021 dollars.
    The total mid-point cost estimate is $1.9 million, which is roughly 
$1,408 per small business ($1.9M/1,349 businesses), annualized over 10 
years assuming a 7 percent discount rate. Table 12 provides a summary 
of the estimated total costs to small businesses.

                          Table 12--Total Small Business Costs, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                Cost type                                     Lower         Mean        Upper
----------------------------------------------------------------------------------------------------------------
Relabeling, One-time.....................................................         $0.6         $3.2         $9.2
Recordkeeping, Recurring.................................................          0.6          0.9          1.4
Market Testing, One-time.................................................          2.0          4.3          6.8
                                                                          --------------------------------------
    Annualized Cost (3% DR, 10 Year).....................................          0.9          1.8          3.3
                                                                          --------------------------------------
    Annualized Cost (7% DR, 10 Year).....................................          1.0          1.9          3.5
----------------------------------------------------------------------------------------------------------------

V. Paperwork Reduction Act

    In accordance with section 3507(d) of the Paperwork Reduction Act 
of 1995, the information collection or recordkeeping requirements 
included in this proposed rule have been submitted for approval to OMB.
    Title: Product of USA.
    OMB Number: 0583-NEW.
    Type of Request: Request for a new information collection.
    Abstract: FSIS has been delegated the authority to exercise the 
functions of the Secretary (7 CFR 2.18, 2.53) as specified in the 
Federal Meat Inspection Act (FMIA) (21 U.S.C. 601, et seq.), the 
Poultry Products Inspection Act (PPIA) (21 U.S.C. 451, et seq.), and 
the Egg Products Inspection Act (EPIA) (21 U.S.C. 1031, et seq.). These 
statutes mandate that FSIS protect the public by verifying that meat, 
poultry, and egg products are safe, wholesome, and properly labeled and 
packaged.
    FSIS is proposing to amend its regulations to define the conditions 
under which the labeling of FSIS-regulated products may bear voluntary 
claims indicating that the product is of United States origin. Under 
the recordkeeping requirements associated with generically approved 
labeling, records must be maintained to demonstrate compliance with 
proposed regulatory requirements for labels bearing U.S.-origin 
claims.\53\
---------------------------------------------------------------------------

    \53\ As discussed above (see Section III. Proposed Rule, 
Required Documentation to Support Claims), under the proposed rule, 
labels that bear the voluntary authorized claims ``Product of USA'' 
or ``Made in the USA'' may have: (1) A written description of the 
controls used in the birthing, raising, slaughter, and processing of 
the source animals, and for multi-ingredient products the 
preparation and processing of all additional ingredients other than 
spices and flavorings, to ensure that each step complies with the 
proposed regulatory criteria; (2) A written description of the 
controls used to trace and segregate source animals, all additional 
ingredients other than spices and flavorings, and resulting products 
that comply with the proposed regulatory criteria from those that do 
not comply; or (3) A signed and dated document describing how the 
product is prepared and processed to support that the claim is not 
false or misleading. Under the proposed rule, labels that bear 
voluntary qualified U.S.-origin claims may have: (1) A written 
description of the controls used in each applicable step of source 
animals, all additional ingredients other than spices and 
flavorings, and resulting products to ensure that the U.S.-origin 
claim complies with the proposed regulatory criteria; or (2) A 
signed and dated document describing how the qualified U.S.-origin 
claim regarding the source of the preparation and processing 
component is not false or misleading.
---------------------------------------------------------------------------

    At the final rule stage, FSIS intends to merge this information 
collection with the existing information collection titled Marking, 
Labeling, and Packaging of Meat, Poultry, and Egg Products (0583-0092). 
Under the recordkeeping requirements associated with generically 
approved labeling, FSIS estimates that it will take an additional 20 
minutes to comply with ``Product of USA'' label recordkeeping 
requirements, 20 times annually. FSIS has made the following estimates 
based upon an information collection assessment:
    Respondents: Official domestic establishments.
    Estimated total number of respondents: 1,575.
    Estimated annual number of responses per respondent: 20.
    Estimated total annual burden on respondents: 10,500 hours.
    All responses to this notice will be summarized and included in the 
request for OMB approval. All comments will also become a matter of 
public record. Copies of this information collection assessment can be 
obtained from Gina Kouba, Office of Policy and Program Development, 
Food Safety and Inspection Service, USDA, 1400 Independence Avenue SW, 
Mailstop 3758, South Building, Washington, DC 20250-3700; (202) 937-
4272.
    Comments are invited on: (a) whether the proposed collection of 
information is necessary for the proper performance of FSIS' functions, 
including whether the information will have practical utility; (b) the 
accuracy of FSIS' estimate of the burden of the proposed collection of 
information, including the validity of

[[Page 15305]]

the method and assumptions used; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of the collection of information, including 
through the use of appropriate automated, electronic, mechanical, or 
other technological collection techniques, or other forms of 
information technology. Comments may be sent to both FSIS, at the 
addresses provided above, and the Desk Officer for Agriculture, Office 
of Information and Regulatory Affairs, Office of Management and Budget 
(OMB), Washington, DC 20253.

VI. E-Government Act

    FSIS and USDA are committed to achieving the purposes of the E-
Government Act (44 U.S.C. 3601, et seq.) by, among other things, 
promoting the use of the internet and other information technologies 
and providing increased opportunities for citizen access to Government 
information and services, and for other purposes.

VII. Executive Order 12988, Civil Justice Reform

    This proposed rule has been reviewed under E.O. 12988, Civil 
Justice Reform. Under this proposed rule: (1) All State and local laws 
and regulations that are inconsistent with this proposed rule will be 
preempted; (2) no retroactive effect will be given to this proposed 
rule; and (3) no administrative proceedings will be required before 
parties may file suit in court challenging this proposed rule.

VIII. Executive Order 13175

    This proposed rule has been reviewed in accordance with the 
requirements of E.O. 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' E.O. 13175 requires Federal agencies to consult 
and coordinate with tribes on a government-to-government basis on 
policies that have tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.
    FSIS has assessed the impact of this proposed rule on Indian tribes 
and determined that this proposed rule does not, to our knowledge, have 
tribal implications that require tribal consultation under E.O. 13175. 
If a tribe requests consultation, FSIS will work with the Office of 
Tribal Relations to ensure meaningful consultation is provided where 
changes, additions, and modifications identified herein are not 
expressly mandated by Congress.

IX. USDA Non-Discrimination Statement

    In accordance with Federal civil rights law and USDA civil rights 
regulations and policies, USDA, its Mission Areas, agencies, staff 
offices, employees, and institutions participating in or administering 
USDA programs are prohibited from discriminating based on race, color, 
national origin, religion, sex, gender identity (including gender 
expression), sexual orientation, disability, age, marital status, 
family/parental status, income derived from a public assistance 
program, political beliefs, or reprisal or retaliation for prior civil 
rights activity, in any program or activity conducted or funded by USDA 
(not all bases apply to all programs). Remedies and complaint filing 
deadlines vary by program or incident.
    Program information may be made available in languages other than 
English. Persons with disabilities who require alternative means of 
communication to obtain program information (e.g., Braille, large 
print, audiotape, American Sign Language) should contact the 
responsible Mission Area, agency, or staff office; the USDA TARGET 
Center at (202) 720-2600 (voice and TTY); or the Federal Relay Service 
at (800) 877-8339.
    To file a program discrimination complaint, a complainant should 
complete a Form, AD-3027, USDA Program Discrimination Complaint Form, 
which can be obtained online at https://www.usda.gov/forms/electronic-forms, from any USDA office, by calling (866) 632-9992, or by writing a 
letter addressed to USDA. The letter must contain the complainant's 
name, address, telephone number, and a written description of the 
alleged discriminatory action in sufficient detail to inform the 
Assistant Secretary for Civil Rights about the nature and date of an 
alleged civil rights violation. The completed AD-3027 form or letter 
must be submitted to USDA by: (1) Mail: U.S. Department of Agriculture, 
Office of the Assistant Secretary for Civil Rights, 1400 Independence 
Avenue SW, Washington, DC 20250-9410; or (2) Fax: (833) 256-1665 or 
(202) 690-7442; or (3) Email: [email protected].
    USDA is an equal opportunity provider, employer, and lender.

X. Environmental Impact

    Each USDA agency is required to comply with 7 CFR part 1b of the 
Departmental regulations, which supplements the National Environmental 
Policy Act regulations published by the Council on Environmental 
Quality. Under these regulations, actions of certain USDA agencies and 
agency units are categorically excluded from the preparation of an 
Environmental Assessment (EA) or an Environmental Impact Statement 
(EIS) unless the agency head determines that an action may have a 
significant environmental effect (7 CFR 1b.4(b)). FSIS is among the 
agencies categorically excluded from the preparation of an EA or EIS (7 
CFR 1b.4(b)(6)).
    FSIS has determined that this proposed rule, which would establish 
voluntary labeling requirements for FSIS-regulated products with 
``Product of USA,'' ``Made in the USA,'' and similar claims, will not 
create any extraordinary circumstances that would result in this 
normally excluded action having a significant individual or cumulative 
effect on the human environment. Therefore, this action is 
appropriately subject to the categorical exclusion from the preparation 
of an environmental assessment or environmental impact statement 
provided under 7 CFR 1b.4(b)(6) of the U.S. Department of Agriculture 
regulations.

XI. Additional Public Notification

    Public awareness of all segments of rulemaking and policy 
development is important. Consequently, FSIS will announce this Federal 
Register publication on-line through the FSIS web page located at: 
https://www.fsis.usda.gov/federal-register.
    FSIS will also announce and provide a link through the FSIS 
Constituent Update, which is used to provide information regarding FSIS 
policies, procedures, regulations, Federal Register notices, FSIS 
public meetings, and other types of information that could affect or 
would be of interest to our constituents and stakeholders. The 
Constituent Update is available on the FSIS web page. Through the web 
page, FSIS is able to provide information to a much broader, more 
diverse audience. In addition, FSIS offers an email subscription 
service which provides automatic and customized access to selected food 
safety news and information. This service is available at: https://www.fsis.usda.gov/subscribe. Options range from recalls to export 
information, regulations, directives, and notices. Customers can add or 
delete subscriptions themselves and have the option to password protect 
their accounts.

[[Page 15306]]

XII. Proposed Rule Text

List of Subjects in 9 CFR Part 412

    Food labeling, Food packaging, Meat and meat products, Meat 
inspection, Poultry and poultry products, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, FSIS is proposing to 
amend 9 CFR part 412 as follows:

PART 412--LABEL APPROVAL

0
1. The authority citation for part 412 continues to read as follows:

    Authority:  21 U.S.C. 451-470, 601-695; 7 CFR 2.18, 2.53.

0
2. Add Sec.  412.3 to read as follows:


Sec.  412.3  Approval of U.S.-origin generic label claims.

    (a) The authorized claims ``Product of USA'' and ``Made in the 
USA'' may be used under generic approval on labels to designate single 
ingredient products derived from animals born, raised, slaughtered, and 
processed in the United States.
    (b) The authorized claims ``Product of USA'' and ``Made in the 
USA'' may be used under generic approval on labels to designate multi-
ingredient products if all FSIS-regulated components of the product are 
derived from animals born, raised, slaughtered, and processed in the 
United States, and all other ingredients in the product are of domestic 
origin. For purposes of this paragraph (b), spices and flavorings need 
not be of domestic origin for claim use, but all other ingredients of 
the product must be of domestic origin.
    (c) Claims other than ``Product of USA'' and ``Made in the USA'' 
may be used under generic approval on labels to designate the U.S.-
origin component of single ingredient and multi-ingredient products 
only if the product also includes a description on the package as to 
how the claim compares to the definitions for the authorized claims, 
``Product of USA'' and ``Made in the USA'' as set forth in paragraphs 
(a) and (b) of this section. The product must include a description on 
the package of all preparation and processing steps that occurred in 
the United States upon which the claim is being made. Such labels must 
be truthful and not misleading.
    (1) The wording of the package description must be shown in print 
no smaller than one third the size of the largest letter in the U.S.-
origin claim, and positioned near the U.S.-origin claim.
    (d) In addition to the requirements in Sec.  412.2, official 
establishments using and facilities choosing to use labels that bear 
the authorized claims ``Product of USA'' or ``Made in the USA'' to 
designate products of U.S. origin must maintain records to support the 
U.S.-origin claim. Examples of the types of documentation that may be 
maintained to support the authorized U.S.-origin claims ``Product of 
USA'' or ``Made in the USA'' include:
    (1) A written description of the controls used in the birthing, 
raising, slaughter, and processing of the source animals, and for 
multi-ingredient products the preparation and processing of all 
additional ingredients other than spices and flavorings, to ensure that 
each step complies with paragraphs (a) and (b) of this section.
    (2) A written description of the controls used to trace and 
segregate, from the time of birth or processing through packaging and 
wholesale or retail distribution, source animals, all additional 
ingredients other than spices and flavorings, and resulting products 
that comply with paragraphs (a) and (b) of this section from those that 
do not comply.
    (3) A signed and dated document describing how the product is 
prepared and processed to support that the authorized claim is not 
false or misleading.
    (e) In addition to the requirements in Sec.  412.2, official 
establishments using and facilities choosing to use a qualified U.S.-
origin label claim to designate the U.S.-origin preparation and 
processing component of a product must maintain records to support the 
qualified U.S.-origin claim. Examples of the types of documentation 
that may be maintained to support the qualified U.S.-origin claim 
include:
    (1) A written description of the controls used in each applicable 
preparation and processing step of source animals, all additional 
ingredients other than spices and flavorings, and resulting products to 
demonstrate that the qualified U.S.-origin claim complies with 
paragraph (c) of this section. The described controls may include those 
used to trace and segregate, during each applicable step, source 
animals, all additional ingredients other than spices and flavorings, 
and resulting products that comply with the U.S.-origin claim from 
those that do not comply.
    (2) A signed and dated document describing how the qualified U.S.-
origin claim regarding the preparation and processing component is not 
false or misleading.

    Done in Washington, DC.
Paul Kiecker,
Administrator.
[FR Doc. 2023-04815 Filed 3-10-23; 8:45 am]
BILLING CODE 3410-DM-P