[Federal Register Volume 89, Number 53 (Monday, March 18, 2024)]
[Rules and Regulations]
[Pages 19470-19496]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-05479]



[[Page 19469]]

Vol. 89

Monday,

No. 53

March 18, 2024

Part III





Department of Agriculture





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Food Safety and Inspection Service





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9 CFR Parts 317, 381, and 412





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

  Federal Register / Vol. 89, No. 53 / Monday, March 18, 2024 / Rules 
and Regulations  

[[Page 19470]]


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DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 317, 381, and 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: Final rule.

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SUMMARY: FSIS is amending its regulations to define the conditions 
under which the labeling of meat, poultry, and egg products under 
mandatory inspection, as well as voluntarily inspected products, may 
bear voluntary label claims indicating that the product is of United 
States origin. As of the compliance date of this final rule, 
establishments will not need to include these claims on the label, but 
if they choose to include them, they will need to meet the requirements 
in this rule.

DATES: 
    Effective date: May 17, 2024.
    Compliance date: Establishments choosing to include voluntary U.S.-
origin claims on the labels of FSIS-regulated products will need to 
comply with the new regulatory requirements under 9 CFR 412.3 on the 
next uniform compliance date for new labeling regulations, January 1, 
2026.
    Comment date: Submit comments on the revised FSIS Guideline for 
Label Approval on or before May 17, 2024.

ADDRESSES: A downloadable version of the revised FSIS Guideline for 
Label Approval is available to view and print at https://www.fsis.usda.gov/guidelines/2024-0001.
    FSIS invites interested persons to submit comment on the revised 
FSIS Guideline for Label Approval. 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.
    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) 720-5046 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, by telephone 
at (202) 937-4272.

SUPPLEMENTARY INFORMATION:

Executive Summary

    After considering the comments received on the proposed rule 
discussed below, FSIS is finalizing its March 13, 2023, proposal to 
define the conditions under which 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 (88 FR 15290).
    The final rule is consistent with the proposed rule with four 
changes. FSIS is revising the proposed regulatory text to: (1) clarify 
the conditions under which voluntary U.S. State, Territory, and 
locality-origin label claims may be made; (2) clarify the conditions 
under which use of the U.S. flag, or a U.S. State or Territory flag, on 
such voluntary labels may be made; (3) make a few minor editorial 
changes to the regulatory text to improve readability and clarity; and 
(4) revise the regulations in 9 CFR 317.8(b)(1) and 381.129(b)(2), 
relating to labeling that indicates a product's geographic significance 
or locality, to clarify how these existing regulatory requirements 
align with the new requirements in 9 CFR 412.3 for the voluntary 
display of U.S.-origin claims.
    The final rule will amend FSIS labeling regulations at 9 CFR part 
317, Labeling, Marking devices, and Containers; 9 CFR part 381, Poultry 
Products Inspection Regulations; and 9 CFR part 412, Label Approval. 
Under the final rule, two specific voluntary U.S.-origin label claims, 
``Product of USA'' and ``Made in the USA'' (referred to in the proposed 
rule as ``authorized claims'' (88 FR 15290)), will be generically 
approved \1\ for use on single ingredient FSIS-regulated products 
(i.e., products produced under FSIS mandatory or voluntary inspection 
services) derived from animals born, raised, slaughtered, and processed 
in the United States. The two voluntary label claims ``Product of USA'' 
and ``Made in the USA'' will also be generically approved for use on 
multi-ingredient FSIS-regulated products if: (1) All FSIS-regulated 
products in the multi-ingredient product are derived from animals born, 
raised, slaughtered, and processed in the United States; (2) all other 
ingredients, other than spices and flavorings, are of domestic origin; 
and (3) the preparation and processing steps for the multi-ingredient 
product have occurred in the United States.
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    \1\ Labels that are generically approved under the FSIS 
regulations may be used in commerce without prior submission to the 
Agency for approval. Products must bear all required labeling 
features and comply with the Agency's labeling regulations to be 
eligible for generic approval (9 CFR 412.2(a)(1)). Current FSIS 
regulations allow all geographic and country of origin claims on 
labels of FSIS-regulated products to be generically approved (9 CFR 
412.2(b)).
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    Also consistent with the proposed rule, label claims other than 
``Product of USA'' or ``Made in the USA'' that indicate that a 
preparation or processing step of a FSIS-regulated product is of U.S. 
origin (referred to in the proposed rule as ``qualified claims'' (88 FR 
15290, 15291) will be generically approved for use,\2\ but such claims 
will need to include the preparation and processing steps (including 
slaughter) that occurred in the United States upon which the claim is 
made.
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    \2\ 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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    Further consistent with the proposed rule, the final rule will 
apply to products sold in the domestic market.\3\ For products exported 
from the United States, FSIS will continue to verify that labeling 
requirements for the applicable country are met, as shown in the FSIS 
Export Library.\4\
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    \3\ As explained in the proposed rule (88 FR 15290, 15292), 
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 will be subject to these regulatory 
requirements.
    \4\ FSIS Export Library, available at: https://www.fsis.usda.gov/inspection/import-export/import-export-library.
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    These final regulations ensure labels bearing these claims are not 
false or misleading (9 CFR 317.8(a), 381.129(b), 590.411(f)(1)). The 
Federal Meat Inspection Act, the Poultry Products Inspection Act, and 
the Egg Products Inspection Act prohibit false or misleading labeling 
of regulated products. The final regulatory definitions of voluntary 
U.S.-origin

[[Page 19471]]

claims align the meaning of those claims with consumers' understanding 
of the information conveyed by those claims. This final rule enables 
informed purchasing decisions by providing information that is valued 
by consumers. This final rule will reduce the market failures 
associated with incorrect and misleading information.

Table of Contents

I. Background
II. Final Rule
III. Summary of Comments and Responses
    A. ``Product of USA'' and ``Made in the USA'' Claims
    B. U.S.-Origin Claims Other Than ``Product of USA'' and ``Made 
in the USA''
    C. Multi-Ingredient Products
    D. Trade Concerns
    E. Exported Products
    F. ``Egg Products'' Definition
    G. RTI Consumer Survey
    H. Cost Benefit Analysis
    I. Recordkeeping Requirements
    J. U.S. State, Territory, and Locality-Origin Claims
    K. U.S. Flag Imagery
    L. Cell-Cultured Meat Products
    M. Enforcement of Regulatory Requirements
    N. Implementation of Regulatory Requirements
IV. Executive Orders 12866, as amended by 14094, and 13563
V. Regulatory Flexibility Act Assessment
VI. Paperwork Reduction Act
VII. E-Government Act
VIII. Executive Order 12988, Civil Justice Reform
IX. Executive Order 13175
X. USDA Non-Discrimination Statement
XI. Environmental Impact
XII. Additional Public Notification

I. 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.\5\
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    \5\ 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).
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    Under 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 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)). FSIS 
has similar authority under the AMA concerning the false or misleading 
labeling of products receiving voluntary inspection services (7 U.S.C. 
1622(h)(1)).
    On March 13, 2023, FSIS published a proposed rule 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 (88 FR 
15290). FSIS published the proposed rule because it determined that its 
existing labeling policy may have confused consumers about the origin 
of FSIS-regulated products in the U.S. marketplace (88 FR 15290, 
15292). The proposed rule also responded to the call for a rulemaking 
on voluntary ``Product of USA'' labeling for meat products in President 
Biden's Executive Order 14036, Promoting Competition in the American 
Economy (88 FR 36987, July 14, 2021; 88 FR 15290, 15292).
    As explained in the proposed rule, FSIS received three petitions 
from industry associations regarding the origin of meat products 
bearing the ``Product of USA'' label claim, each generally asserting 
that the Agency's current policy on U.S.-origin labeling furthers 
consumer confusion as to whether products with U.S.-origin claims are 
derived from animals born, raised, slaughtered, and processed in the 
United States (88 FR 15290, 15292). In June 2018, FSIS received a 
petition, submitted on behalf of the Organization for Competitive 
Markets (OCM) and the American Grassfed Association (AGA), requesting 
that FSIS amend its labeling policy 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. In October 2019, the United States 
Cattlemen's Association (USCA) submitted a petition requesting that 
FSIS amend its labeling policy to state that any beef product 
voluntarily labeled as ``Made in the USA,'' ``Product of the USA,'' 
``USA Beef,'' or with similar claims, be derived from cattle that have 
been born, raised, and slaughtered in the United States. Both the OCM/
AGA and USCA petitions asserted that FSIS' current policy is misleading 
to consumers. FSIS received 2,593 public comments on the OCM/AGA 
petition and 111 public comments on the USCA petition. A majority of 
comments received on both petitions supported the respective petitions. 
In March 2020, FSIS responded to both petitions to state the Agency's 
conclusion that its current labeling policy may be causing confusion in 
the marketplace and that FSIS had decided to initiate rulemaking to 
define the conditions under which the labeling of meat products would 
be permitted to bear voluntary U.S.-origin claims. Finally, in June 
2021, the National Cattlemen's Beef Association (NCBA) submitted a 
petition requesting that FSIS amend its regulations to eliminate the 
broadly applicable ``Product of USA'' label claim but to allow for 
other label claims. Specifically, the petition requested that FSIS 
amend its regulations to state that single ingredient beef products or 
ground beef may be labeled as ``Processed in the USA.'' FSIS received 
261 public comments on the NCBA petition, with most comments not in 
support of the petition. As explained in the proposed rule, the 
publication of the proposed rule served as the Agency's response to the 
issues raised by all three related petitions (88 FR 15290, 15294).
    After receiving the petitions, to inform rulemaking on voluntary 
``Product of USA'' labeling, FSIS 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. To gather information as part of FSIS' comprehensive review, 
RTI International conducted a consumer web-based survey (``RTI survey'' 
or ``survey'') on ``Product of USA'' labeling.\6\ As explained in the 
proposed rule, the combined survey results show that most consumers 
believe that ``Product of USA'' label claims indicate that the product 
is derived from animals

[[Page 19472]]

born, raised, slaughtered, and processed in the United States (88 FR 
15290, 15295), and that a majority of consumers believe that the 
current FSIS ``Product of USA'' label claim is misleading as to the 
actual origin of FSIS-regulated products. Further, as discussed below, 
most of the comments received on the proposed rule supported the 
proposed rule, with many individuals and domestic trade associations 
citing the need for accurate labeling to ensure that FSIS-regulated 
products labeled as ``Product of USA'' or ``Made in the USA'' are 
derived from animals born, raised, slaughtered, and processed in the 
United States.
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    \6\ 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 final report 
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.
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    The proposed rule's comment period closed on June 11, 2023, 90 days 
after its publication.\7\ Based on comments received on the proposed 
rule, the related petitions on the topic, and the consumer survey 
results, FSIS has determined that its current labeling policy may be 
misleading consumers because it does not align with consumers' 
understanding of the label and that adopting the proposed definition of 
the voluntary ``Product of USA'' and ``Made in the USA'' label claims 
will more accurately reflect its commonly understood meaning that the 
product was derived from an animal born, raised, slaughtered, and 
processed in the United States.
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    \7\ The original comment period closed on May 12, 2023. FSIS 
extended the comment period by 30 days in response to requests from 
a foreign country and a domestic trade association for additional 
time to determine and formulate comments on the impact of the 
proposed regulations. See FSIS Constituent Update, April 7, 2023, 
available at: https://www.fsis.usda.gov/news-events/news-press-releases/constituent-update-april-7-2023.
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    The final rule will enhance consumer purchasing decisions and 
ensure that the labeling is consistent with consumers' understanding 
and expectations of products labeled as ``Product of USA'' and ``Made 
in the USA'' and not misleading.

II. Final Rule

    The final rule is consistent with the proposed rule with the four 
following changes.
    FSIS is making four changes to the proposed new regulatory text in 
9 CFR 412.3. First, in response to comments, FSIS is clarifying that 
voluntary label claims may be used under generic approval to designate 
the U.S. State, Territory, or locality-origin of a FSIS-regulated 
product or product component, provided that such claims meet the 
requirements for use of corresponding voluntary U.S.-origin claims 
under 9 CFR 412.3. Specifically, products labeled with ''Product of . . 
.'' or ``Made in the . . .'' claims referring to the origin of a U.S. 
State, Territory, or locality will need to meet the regulatory criteria 
under 9 CFR 412.3(a) and (b) for these claims (e.g., a meat product 
labeled with the claim ``Product of Montana'' must be derived from an 
animal born, raised, slaughtered, and processed in Montana). Label 
claims other than ``Product of . . .'' or ``Made in the . . .'' that 
refer to the U.S. State, Territory, or locality-origin component of a 
FSIS-regulated products' preparation and processing will need to meet 
the regulatory criteria under 9 CFR 412.3(c) for these claims (e.g., a 
pork product derived from an animal born, raised, and slaughtered in a 
foreign country, then sliced and packaged in Oklahoma, could be labeled 
with the claim ``Sliced and Packaged in Oklahoma''). These requirements 
for U.S. State, Territory, and locality-origin claims were discussed in 
the proposed rule, and FSIS originally proposed to clarify this policy 
in Agency guidance (88 FR 15290, 15296). However, in response to 
comments supporting the inclusion of these claims within the scope of 
the proposed rule and comments asking for clarification about the use 
of such claims, FSIS decided that changes to the regulatory text were 
warranted.
    Second, in response to comments requesting FSIS to clarify when 
display of the U.S. flag on labels of FSIS-regulated products would be 
considered use of a voluntary U.S.-origin claim, the Agency is 
clarifying that label displays of the U.S. flag, or a U.S. State or 
Territory flag, on products will be considered use of voluntary origin 
claims of the United States or the respective U.S. State or Territory. 
Label displays of the U.S. flag, or a U.S. State or Territory flag, are 
inherently claims indicating a product's origin. Therefore, 
requirements for such displays are logical outgrowths of the proposed 
requirements for the voluntary labeling of FSIS-regulated products with 
U.S.-origin claims.
    Specifically, FSIS is revising 9 CFR 412.3 to clarify that the 
voluntary use of a standalone image of the U.S. flag, or a U.S. State 
or Territory flag, will need to meet the requirements under 9 CFR 
412.3(a) and (b) for use of voluntary ``Product of . . .'' and ``Made 
in . . .'' claims (e.g., a meat product labeled with a standalone 
display of the U.S. flag will need to be derived from an animal born, 
raised, slaughtered, and processed in the United States). The voluntary 
use of the U.S. flag, or a U.S. State or Territory flag, may be used to 
designate a specific origin of a product or component of the product's 
preparation and processing but the image will need to be accompanied by 
a description of the preparation and processing steps that occurred in 
the United States, or the respective U.S. State or Territory, upon 
which the claim is being made (e.g., display of the New York State flag 
on a pork product with the accompanying description ``Sliced and 
Packaged in New York'').
    Third, FSIS is making a few editorial changes to the proposed 
regulatory text in 9 CFR 412.3 to improve readability and clarity.
    Finally, FSIS is also revising the regulations in 9 CFR 317.8(b)(1) 
and 381.129(b)(2), relating to labeling that indicates a product's 
geographic significance or locality, to clarify how these existing 
regulatory requirements align with the new requirements in 9 CFR 412.3 
for the voluntary display of U.S.-origin claims.
    As explained above, under the final rule, the two claims ``Product 
of USA'' and ``Made in the USA'' may be displayed on labels of FSIS-
regulated single ingredient products only if the 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 products in the multi-ingredient product are derived from an 
animal born, raised, slaughtered, and processed in the United States; 
(2) all other ingredients, other than spices and flavorings, are of 
domestic origin; and (3) the preparation and processing steps for the 
multi-ingredient product have occurred in the United States. Before 
January 1, 2026, the compliance date for the new regulatory 
requirements,\8\ FSIS will update its Food Standards and Labeling 
Policy Book \9\ to remove the current ``Product of USA'' entry that 
allows FSIS-regulated products that are minimally processed in the 
United States to be labeled as ``Product of USA.''
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    \8\ See 87 FR 77707, December 20, 2022.
    \9\ Available at: https://www.fsis.usda.gov/guidelines/2005-0003.
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    Additionally, the final rule will allow for claims other than the 
two claims ``Product of USA'' and ``Made in the USA'' to be displayed 
on labels to indicate the U.S.-origin of a component of a product's 
preparation and processing. Label claims other than ``Product of USA'' 
or ``Made in the USA'' that indicate that a component of a FSIS-
regulated product's preparation and processing is of U.S. origin will 
be allowed under the final rule, but such claims will need to include 
the preparation and processing steps that

[[Page 19473]]

occurred in the United States upon which the claim is made.

FSIS Labeling and AMS Mandatory COOL

    This final rule will not alter or affect any other Federal statute 
or regulation relating to country of origin labeling requirements. For 
example, as explained in the proposed rule, the regulatory requirements 
established by this final rule will not conflict with the requirements 
of the USDA Agricultural Marketing Service's (AMS) Country of Origin 
(COOL) mandatory labeling regulations (88 FR 15290, 15296; see also 7 
CFR part 60 and 65). Establishments choosing to use voluntary U.S.-
origin labels on products covered by this final rule will still need to 
comply with applicable COOL requirements (see 9 CFR 317.8(b)(40)) for 
the identification of country of origin, for commodities subject to the 
COOL 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.\10\ Under this final rule, any commodity that is 
subject to COOL mandatory country of origin labeling must continue to 
comply with those requirements.
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    \10\ 9 CFR 317.8(b)(40) and 9 CFR 381.129(f). 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 65.300(a) and 
65.400(a)).
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Required Documentation To Support Claims

    Consistent with the proposed rule, official establishments and 
facilities choosing to use a U.S.-origin claim on labels of FSIS-
regulated products will need to maintain, and provide FSIS access to, 
documentation sufficient to demonstrate that the product meets the 
regulatory criteria for use of the claim as the regulations require for 
the use of all generically approved labels (88 FR 15290, 15296; see 9 
CFR 412.2(a)(1)). FSIS will accept existing documentation to 
demonstrate compliance with the applicable regulatory requirements. 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's preparation and processing, is of U.S. origin under 
the final rule.
    Regulated entities choosing to make voluntary ``Product of USA'' or 
``Made in the USA'' claims under the final rule in 9 CFR 412.3(a) and 
(b) may have:
     A written description of the controls used in the 
birthing, raising, slaughter, and processing of the source animals and 
eggs, and for multi-ingredient products in the preparation and 
processing of all additional ingredients other than spices and 
flavorings, and of the multi-ingredient product itself, to ensure that 
each step complies with the regulatory criteria;
     A written description of the controls used to trace and, 
as necessary, segregate, from the time of birth through packaging and 
wholesale or retail distribution, source animals and eggs, all 
additional ingredients other than spices and flavorings, and resulting 
products that comply with the regulatory criteria from those that do 
not comply; or
     A signed and dated document describing how the product is 
prepared and processed to support that the claim is not false or 
misleading.
    Regulated entities choosing to make voluntary U.S.-origin claims 
other than ``Product of USA'' and ``Made in the USA'' under the final 
rule in 9 CFR 412.3(c) may have:
     A written description of the controls used in each 
applicable preparation and processing step of source animals and eggs, 
all additional ingredients other than spices and flavorings, and 
resulting products to ensure that the U.S.-origin claim complies with 
the regulatory criteria. The described controls may include those used 
to trace and, as necessary, segregate, during each applicable 
preparation or processing step, source animals and eggs, 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
     A signed and dated document describing how the U.S.-origin 
claim regarding the preparation and processing steps is not false or 
misleading.
    The final rule does not specify the types of records and 
documentation that must be maintained to demonstrate compliance with 
the regulatory criteria (e.g., bills of lading, shipping manifests, 
load sheets, grower records). FSIS has also updated its FSIS Guideline 
for Label Approval \11\ on the use of voluntary U.S.-origin labels 
eligible for generic approval, to provide more examples of the types of 
documentation that official establishments and facilities may maintain 
to support use of the claims.
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    \11\ Available at: https://www.fsis.usda.gov/guidelines/2024-0001.
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Compliance Date and Transition Period

    As explained in the proposed rule, FSIS generally uses a uniform 
compliance date for new labeling regulations (88 FR 15290, 15297). The 
uniform compliance date is intended to minimize the economic impact of 
labeling changes by providing for an orderly industry adjustment to new 
labeling requirements that occur between the designated dates.\12\ Per 
the uniform compliance date schedule, establishments voluntarily using 
a claim subject to this rulemaking will need to comply with the new 
regulatory requirements by January 1, 2026 (87 FR 77707, December 20, 
2022). On that date and going forward, FSIS will consider as compliant 
only labels bearing the voluntary claims ``Product of USA,'' ``Made in 
the USA,'' and other U.S.-origin claims for FSIS-regulated products 
that comply with the codified requirements for the use of such claims 
in this final rule. Establishments may choose to voluntarily change 
their labels to comply with the final rule before January 1, 2026, and 
are encouraged to do so as soon as practicable after the publication of 
this final rule.
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    \12\ See FSIS Uniform Date for Food Labeling Regulations Final 
Rule (69 FR 74405, December 14, 2004).
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III. Summary of Comments and Responses

    FSIS received 3,364 comments on the proposed rule from domestic and 
foreign trade associations, foreign countries, meat and poultry 
producers, dairy and crop producers, farmers, non-profit organizations, 
and consumers. Most of the comments were in support of the proposed 
rule. Specifically, over 3,000 consumers, and most domestic producers 
and organizations, supported the proposed rule, with many citing the 
need to revise the ``Product of USA'' or ``Made in the USA'' labeling 
claims policy to require that FSIS-regulated products labeled as 
``Product of USA'' or ``Made in the USA'' are derived from animals 
born, raised, slaughtered, and processed in the United States. A few 
comments were outside the scope of the proposed rulemaking, as they 
concerned labeling issues not related to U.S.-origin claims (e.g., the 
labeling of Halal-certified products and products containing 
genetically modified organisms).
    A summary of the relevant issues raised by commenters and the 
Agency's responses follows.

[[Page 19474]]

A. ``Product of USA'' and ``Made in the USA'' Claims

    Comment: One domestic trade association stated that the proposed 
rule is overly prescriptive and asked FSIS to consider establishing 
acceptable U.S.-origin label claim criteria through guidance.
    Response: FSIS disagrees that the rule is overly prescriptive. 
Establishments are not required to use ``Product of USA'' or ``Made in 
the USA'' label claims. In addition, if the product does not meet the 
criteria for these claims, the final rule allows for other claims that 
describe the specific preparation and processing steps that occurred in 
the United States (9 CFR 412.3(c)). The Agency is taking this 
regulatory action to address consumer confusion surrounding current 
voluntary U.S.-origin label claims on FSIS-regulated products in the 
U.S. marketplace. As explained in the proposed rule, consumer survey 
results, reviews of consumer research, and comments received on related 
petitions indicated that the Agency's current ``Product of USA'' 
labeling policy is misleading to consumers (88 FR 15290). The fact that 
most comments received on the proposed rule supported the proposed 
voluntary U.S.-origin label claim requirements further demonstrates the 
need to amend the FSIS 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 U.S. origin.
    Comment: One foreign trade association stated that the Agency 
failed to consider alternative criteria for the ``Product of USA'' or 
``Made in the USA'' claims, such as a less rigorous requirement that 
the animal is only ``raised and slaughtered in the United States.'' 
This commenter stated that FSIS should withdraw the proposed rule or 
solicit additional comments to reconsider alternative criteria for the 
``Product of USA'' and ``Made in the USA'' label claims. One foreign 
country stated that the RTI survey did not include consideration of 
alternative options to the proposed label claims. One domestic trade 
association stated that the proposed label claims should be replaced 
with a label claim such as ``Processed in the USA'' that would be more 
accurate and verifiable.
    Response: The commenters incorrectly stated that FSIS failed to 
consider alternative criteria for the ``Product of USA'' and ``Made in 
the USA'' label claims, or that the RTI survey did not include 
consideration of alternative options for the label claims. FSIS 
reviewed alternative criteria for the claims. That review has led FSIS 
to establish the various options for label claims other than ``Product 
of USA'' and ``Made in the USA'' on single ingredient and multi-
ingredient products. These other options allow for various claims 
regarding the U.S.-origin of FSIS-regulated products.
    Further, as explained in the proposed rule, the RTI survey included 
questions that surveyed consumers' understanding of the meaning of the 
``Product of USA'' label claim by showing participants possible 
definitions of the claim with various combinations of ``born,'' 
``raised,'' ``slaughtered,'' and ``processed'' (88 FR 15290, 15295). 
The survey also included questions about consumers' willingness to pay 
for products bearing ``Product of USA'' label claims with different 
definitions on the spectrum of ``born,'' ``raised,'' ``slaughtered,'' 
and ``processed'' in the United States. The combined survey results 
show that most consumers believe that ``Product of USA'' label claims 
indicate that the product is derived from animals born, raised, 
slaughtered, and processed in the United States. This survey shows that 
a majority of consumers do not understand the current FSIS ``Product of 
USA'' label claim and that it is misleading to a majority of consumers 
as to the actual origin of FSIS-regulated products. These survey 
results informed the Agency's decision-making process for developing 
the proposed rule. FSIS considered other options but proposed the 
requirements that most closely reflected the meaning of the ``Product 
of USA'' and ``Made in USA'' claims based on the survey, the relevant 
petitions, and the comments received on those petitions. For these 
reasons, FSIS disagrees that the Agency should withdraw the proposed 
rule or replace the requirements for the voluntary ``Product of USA'' 
and ``Made in the USA'' claims.
    Comment: A few domestic and foreign trade associations stated that 
the doctrine of substantial transformation should be the standard for 
determining a product's country of origin for ``Product of USA'' or 
``Made in the USA'' claims, rather than the ``born, raised, processed, 
and slaughtered'' criteria. According to these commenters, under the 
substantial transformation doctrine, the origin of FSIS-regulated meat 
products would be the country of the animal's slaughter. One domestic 
trade association stated that products made from animals that were 
substantially transformed in the United States, such as through 
slaughter, should be eligible for the label claim ``Processed in the 
USA,'' which would be consistent with other regulatory standards. 
Another domestic trade association stated that the proposed rule should 
be revised to allow for the use of ``Product of USA'' or ``Made in the 
USA'' claims on any product derived from an animal that lived more than 
95 percent of its life in the United States and is slaughtered, 
processed, and packaged in United States.
    Response: As explained in the proposed rule, the Agency's consumer 
survey results show that most consumers believe the ``Product of USA'' 
label claim means the product was derived from animals born, raised, 
slaughtered, and processed in the United States (88 FR 15290, 15295). 
Most of the comments received on the proposed rule also supported the 
``born, raised, processed, and slaughtered'' proposed definition for 
these claims. Based on these survey results and comments, the petition 
on this topic, and the comments received on those petitions, FSIS has 
determined that consumers believe that these claims mean that the 
product was derived from animals born, raised, slaughtered, and 
processed in the United States. Adding additional criteria for these 
claims, as suggested by the commenters, would continue to mislead 
consumers.
    Comment: One domestic trade association stated that products made 
from offspring animals that were born, raised, and slaughtered in the 
United States should be eligible for ``Product of USA'' or ``Made in 
the USA'' claims, even if the parent animals were imported.
    Response: FSIS agrees. Products made from an animal that was born, 
raised, slaughtered, and processed in the United States will be 
eligible for these claims, provided they meet any other applicable 
criteria. The country in which the parent animal of the animal was 
born, raised, slaughtered, or processed will not be relevant to a 
product's eligibility to bear these claims.
    Comment: A few domestic and foreign trade associations and one 
foreign country requested clarification on whether, under the proposed 
criteria for ''Product of USA'' or ``Made in the USA'' claims, eggs 
produced in the United States from imported poultry would meet the 
requirement of ``born'' in the United States.
    Response: Under the final rule, ``born'' in the case of a poultry 
species is ``hatched from the egg'' and in the case of an egg product 
is ``broken from the egg.'' Therefore, poultry hatched or eggs broken 
in the United States from either domestic or imported parents will

[[Page 19475]]

meet the requirement for these claims that the animal was ``born'' in 
the United States.
    Comment: Several domestic trade associations and one foreign 
country opposed the proposed ``born (i.e., hatched), raised, 
slaughtered, and processed'' requirement for use of ''Product of USA'' 
or ``Made in the USA'' claims on poultry products. One domestic trade 
association and one foreign country stated that the requirement would 
affect the widespread industry practice of shipping day-old chicks from 
Canada and other countries into the United States for the purpose of 
raising, slaughtering, and processing the animals to produce poultry 
products for the U.S. market. One domestic trade association 
recommended that the proposed rule allow these claims to be used on a 
product derived from a chicken or turkey raised from a poult shipped 
into the United States fewer than 48 hours after hatching, provided the 
animal lives the reminder of its life in the United States and is 
slaughtered, processed, and packaged domestically.
    Response: FSIS disagrees that poultry products should be excluded 
from the ``born (i.e., hatched)'' requirement for use of these claims. 
Establishing consistent requirements for the use of U.S.-origin label 
claims across all FSIS-regulated products will further the final rule's 
purpose to provide consumers with accurate label information and thus 
ensure labels are not misleading consumers in the marketplace. Under 
the final rule, establishments may choose to use an origin claim other 
than ``Product of USA'' or ``Made in the USA'' on the labels of poultry 
products to indicate the preparation and processing steps that occurred 
in the United States upon which the claim is made, such as ``Made from 
turkey slaughtered and processed in the United States'' (9 CFR 
412.3(c)).
    Comment: One domestic trade association stated that poultry 
production practices, such as the shipping of day-old chicks, were not 
significantly considered in developing the proposed ``born, raised, 
slaughtered, and processed'' criteria for voluntary ``Product of USA'' 
and ``Made in the USA'' label claims. The commenter noted that the RTI 
survey did not include examples of poultry products and that none of 
the petitions explained in the proposed rule asserted that consumers 
are confused about ``Product of USA'' label claims on poultry products.
    Response: FSIS is establishing requirements for the use of 
voluntary U.S.-origin label claims on all FSIS-regulated products in 
order to maintain consistent labeling requirements for all products 
under the Agency's jurisdiction and to address consumer confusion about 
its current ``Product of USA'' labeling policy. The rule addresses the 
prohibition of claims that have been shown to be misleading. FSIS 
acknowledges that poultry products were not included in the RTI survey 
that support the conclusion that current claims can be misleading. 
However, FSIS disagrees that the findings of the RTI survey are not 
applicable to poultry products because they were not included as 
product examples in the survey questions. It would be impractical for 
the survey to include all product types within FSIS' regulatory 
jurisdiction. While the RTI survey only looked directly at a subset of 
beef and pork products, there is no reason to conclude that the product 
claims examined in that study were any less misleading when applied to 
chicken than they are when applied to beef. Finally, FSIS notes that 
the proposed rule clearly stated that these criteria would apply to 
poultry products (88 FR 15290). FSIS received over 1,000 comments from 
consumers who specifically supported the inclusion of poultry products 
in the proposed rule, demonstrating the need to provide consistent 
regulatory definitions of voluntary U.S.-origin claims for all 
products, including poultry products, under FSIS mandatory inspection 
and voluntary inspection services.

B. U.S.-Origin Claims Other Than ``Product of USA'' and ``Made in the 
USA''

    Comment: Several domestic trade associations opposed the proposed 
criteria for FSIS-regulated products to be eligible to bear U.S.-origin 
claims other than ``Product of USA'' or ``Made in the USA,'' stating 
that the criteria would be too complex for industry to use the claims.
    Response: FSIS disagrees that the criteria for U.S.-origin claims 
other than ``Product of USA'' and ``Made in the USA'' are too complex. 
Official establishments and facilities that label FSIS-regulated 
products with these claims may choose to use the label claims but are 
not required to do so. The final rule allows for U.S.-origin label 
claims other than ``Product of USA'' or ``Made in the USA,'' provided 
that the label claims include a description to indicate which 
preparation and processing steps occurred in the United States (9 CFR 
412.3(c)). This description will provide consumers meaningful 
information about the U.S.-origin components of the product's 
preparation and processing. Currently, these types of voluntary U.S.-
origin label claims are used on FSIS-regulated products in the U.S. 
retail market, which shows that they are not too complex for interested 
official establishments and facilities. FSIS has updated its generic 
labeling guidance to provide specific examples of descriptions that 
will provide meaningful consumer information (e.g., the specific 
description ``Sliced and Packaged in the United States,'' rather than 
the generalized descriptions ``Processed in the United States'' or 
``Manufactured in the United States''). The updated guidance is 
available on the FSIS website at: https://www.fsis.usda.gov/guidelines/2024-0001.
    Comment: One consumer advocacy organization stated that label 
claims other than ``Product of USA'' or ``Made in the USA'' on products 
derived from animals not born in the United States would undermine the 
purpose of the proposed rule to provide consumers accurate information 
about the origin of FSIS-regulated products. To mitigate this risk, the 
commenter stated that FSIS should establish comprehensive requirements 
for these label claims that concern all label components, such as 
wording, placement, size, color, and readability, which could cause the 
consumer to be confused or uncertain concerning whether a product 
originated from an animal born, raised, slaughtered, and processed in 
the United States.
    Response: The provisions for all voluntary label claims under this 
rule will ensure that labels of FSIS-regulated products do not mislead 
or confuse consumers about the origin of the product. First, as with 
all labeling of FSIS-regulated products, U.S.-origin claims other than 
``Product of USA'' or ``Made in the USA'' must be truthful and not 
misleading. These other U.S.-origin label claims also will include a 
description of which preparation and processing steps occurred in the 
United States (88 FR 15290, 15306). Further, labels bearing the claims 
under this rule will be subject to routine FSIS Inspection Program 
Personnel (IPP) verification activities at establishments and 
facilities to verify that the generically approved labels are truthful 
and not misleading and comply with labeling requirements, including 
font size, placement, and other wording requirements under 9 CFR 317.2, 
381.116, and 590.411.
    Comment: A few domestic trade associations stated that the proposed 
requirement for voluntary U.S.-origin claims other than ``Product of 
USA'' and

[[Page 19476]]

``Made in the USA'' to include a ``description on the package'' of how 
the product compares to the regulatory criteria for the ``Product of 
USA'' and ``Made in the USA'' claims should apply only to retail 
labels. One commenter asked the Agency to clarify its definition of 
``package'' for the purposes of this U.S.-origin label claim 
requirement.
    Response: The description requirement for the use of voluntary 
U.S.-origin label claims other than ``Product of USA'' and ``Made in 
the USA'' will apply to the ``immediate container'' (i.e., the package 
seen by the end user; see 9 CFR 317.1(a), 381.1, and 590.5). For 
clarity, FSIS has made an editorial revision to the proposed regulatory 
text in 9 CFR 412.3(c) to remove the ``package'' reference and to more 
simply state that these other voluntary U.S.-origin claims must include 
a description of the preparation and processing steps that occurred in 
the United States upon which the claim is being made.
    Comment: One domestic trade association stated that products 
bearing U.S.-origin label claims other than ``Product of USA'' and 
``Made in the USA'' should be required to include a description 
specifying the countries where the same production steps included in 
``Product of USA'' or ``Made in the USA'' claim criteria occurred 
(i.e., where the animal from which the product was derived was born, 
raised, slaughtered, and processed). The commenter also stated that all 
U.S.-origin label claims other than ``Product of USA'' and ``Made in 
the USA'' should indicate the country of origin of the product itself, 
not the country in which ancillary preparation or processing steps 
occurred. The commenter stated that preparation and processing, such as 
slicing and packaging, are not actual ``components'' of products. 
Rather, they are only features or applications applied to the products.
    Response: FSIS disagrees that products bearing U.S.-origin label 
claims other than ``Product of USA'' and ``Made in the USA'' should be 
required to specify all the countries in which the originating animal 
was born, raised, slaughtered, and processed. The final rule will 
require that these U.S.-origin label claims on FSIS-regulated products 
include a description of the preparation and processing steps that 
occurred in the United States upon which the claim is made. Such 
preparation and processing steps may include ``born,'' ``raised,'' or 
``slaughtered.'' However, they may also include other steps, such as 
``sliced'' or ``packaged.'' This description requirement will ensure 
that consumers are provided meaningful, accurate information about the 
U.S.-origin of the product or of the product's preparation and 
processing. However, FSIS is not requiring that other country of origin 
information be included on the product. FSIS notes that some products 
under FSIS mandatory inspection or receiving voluntary inspection 
services may need to meet AMS COOL requirements at retail.
    Comment: A few trade associations asked whether, under the proposed 
rule, the Agency would retain the foreign country-origin designation of 
imported meat products on U.S.-origin claims other than ``Product of 
USA'' or ``Made in the USA'' by requiring the label display of the 
actual country from which the imported beef was sourced, not only a 
generic reference to ``Imported.''
    Response: As explained in the proposed rule, currently, when meat, 
poultry, and egg products imported into the U.S. are repackaged or 
otherwise processed in a FSIS-inspected facility, they are deemed and 
treated as domestic product for both mandatory and voluntary labeling 
purposes (21 U.S.C. 620 and 466, 88 FR 15290 and 15292). Under the 
final rule, while imported products cannot bear a ``Product of USA'' or 
``Made in the USA'' label claim, official establishments and facilities 
will have the option to use another claim (qualified claim). The final 
rule will not change the requirement under the regulations that the 
immediate container of imported meat, poultry, and egg products must 
bear the name of the country of origin, preceded by the words ''Product 
of'' (9 CFR 327.14, 381.205, and 590.950). Further, products imported 
to the United States that are misbranded will continue to be eligible 
to be relabeled with an approved label under the supervision of FSIS 
personnel (9 CFR 327.13(a)(4), 381.129(b)(6)(iv)(A), and 590.956).

C. Multi-Ingredient Products

    Comment: A few domestic trade associations stated that multi-
ingredient products should be excluded from the scope of products 
subject to the proposed rule. One commenter specifically stated that 
FSIS failed to consult with the U.S. Food and Drug Administration (FDA) 
on the proposed rule and that the proposed requirements would likely 
lead to confusion regarding multi-ingredient products with ``Product of 
USA'' or ``Made in the USA'' claims, as consumers would assume all food 
products are held to the same standard for the label claim.
    Additionally, a few domestic and foreign trade associations and one 
foreign country opposed the proposed criterion for multi-ingredient 
products bearing a ``Product of USA'' or ``Made in the USA'' label 
claim that all additional ingredients, other than spices and 
flavorings, are of domestic origin. One domestic trade association 
argued that the proposed ``domestic origin'' criterion for ``all other 
ingredients'' would cause companies seeking to use these claims on 
multi-ingredient products to source domestic ingredients even if the 
price is uncompetitive, resulting in increased cost for industry, and 
increased prices for consumers. The foreign country noted that the 
scope of the RTI survey did not include multi-ingredient products. 
Therefore, the commenter argued, it is uncertain whether consumers 
expect virtually all ingredients in a multi-ingredient product bearing 
a ``Product of USA'' label claim to be of U.S. origin.
    Response: FSIS disagrees that multi-ingredient products should be 
excluded from the scope of the final rule. Under the Agency's 
authorizing statutes, multi-ingredient products containing meat, 
poultry, and egg products are within FSIS' jurisdiction and by statute, 
FSIS is required to ensure that such products are safe, wholesome, and 
properly labeled and packaged (21 U.S.C. 601 et seq., 21 U.S.C. 451 et 
seq., and 21 U.S.C. 1031 et seq.) FSIS is defining the conditions under 
which both single ingredient and multi-ingredient products may bear 
voluntary U.S.-origin claims to maintain consistent labeling 
requirements across all FSIS-regulated products. As explained in the 
proposed rule, this consistency will benefit consumers by aligning the 
meaning of U.S.-origin label claims with consumer expectations. 
Consumers also provided comments in support of the changes in the 
proposed rule (88 FR 15290, 15291). Additionally, the fact that FSIS 
received over 3,000 comments from other consumers who generally 
supported the proposed rule further demonstrates the need to provide 
consistent regulatory definitions of voluntary U.S.-origin claims for 
all products under FSIS mandatory inspection and voluntary inspection 
services.
    FSIS also disagrees that the Agency should establish alternative 
criteria for the use of voluntary ``Product of USA'' and ``Made in the 
USA'' label claims on multi-ingredient products. The requirement that 
all additional (i.e., not under FSIS mandatory inspection or voluntary 
inspection services) ingredients other than spices and flavorings must 
be of domestic origin will ensure that the labels do not mislead or 
confuse consumers about the origin of the products. This ``virtually

[[Page 19477]]

all'' domestic origin ingredients requirement aligns with the 2021 U.S. 
Federal Trade Commission (FTC) final rule related to ``Made in USA'' 
and similar U.S.-origin label claims (86 FR 37022, July 14, 2021). The 
FTC rule requires, in part, that ``all or virtually all'' of a 
product's ingredients or components must be made and sourced in the 
United States for the product to bear ``Made in the USA'' and similar 
claims.\13\ FSIS also notes that FDA reviewed FSIS' proposed rule prior 
to publication as part of the standard interagency review process. 
While FSIS is not revising the proposed criteria for the use of 
voluntary ``Product of USA'' and ``Made in the USA'' label claims, the 
Agency has made a few minor editorial changes to the regulatory text at 
9 CFR 412.3(b) to improve readability and clarity.
---------------------------------------------------------------------------

    \13\ The FTC final rule does not apply to FSIS-regulated 
products. 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 (86 FR 37022, 37029).
---------------------------------------------------------------------------

    Further, FSIS disagrees that the findings of the RTI survey are not 
applicable to multi-ingredient products because they were not included 
as product examples in the survey questions. As noted above, it would 
be impractical for the survey to include all product types within FSIS' 
regulatory jurisdiction. As also noted above, one goal of the survey 
was to understand the ranking of consumer preferences for label claims, 
and this information is relevant to all FSIS-regulated products.
    Finally, regarding one commenter's concern about costs associated 
with the domestic sourcing requirements for ``Product of USA'' and 
``Made in the USA'' label claims on multi-ingredient products, FSIS 
notes that the U.S.-origin label claims covered by the final rule are 
voluntary. Official establishments and facilities can choose to use 
another U.S.-origin label claim (qualified claim), or no claim, should 
they decide that meeting the requirements for the ``Product of USA'' 
and ``Made in the USA'' claims is not desirable or cost effective for a 
particular multi-ingredient product.
    Comment: A few domestic trade associations specifically stated that 
FSIS should expand the proposed ``spices and flavorings'' exception to 
the domestic sourcing requirement for multi-ingredient products bearing 
``Product of USA'' or ``Made in the USA'' label claims. However, the 
commenters did not provide consistent suggestions for an alternative 
exception. One commenter stated that FSIS should expand the exception 
to other minor ingredients that do not materially affect whether 
consumers expect the product to be of U.S. origin. One commenter stated 
that the domestic sourcing requirement should apply only to major 
characterizing ingredients. One commenter asked whether the Agency 
would exempt enzymes from the domestic sourcing requirement. One 
commenter stated that any ingredients added for technical or functional 
reasons should be excluded from the domestic sourcing requirement. One 
commenter stated that only a majority of non-FSIS regulated ingredients 
should be required to be domestically sourced. Finally, one commenter 
stated that certain ingredients, such as phosphates, may not be 
considered ``spices or flavorings'' but are used in very small amounts, 
are necessary for food safety and functionality, and would be overly 
burdensome to include in the domestic sourcing requirement.
    Response: FSIS disagrees that the ``spices and flavorings'' 
exception should be expanded for multi-ingredient products that bear 
voluntary ''Product of USA'' or ``Made in the USA'' claims. As stated 
above, FSIS is taking this regulatory action to address consumer 
confusion about the Agency's current ``Product of USA'' labeling 
policy. FSIS' review of the policy has shown that the current ``Product 
of USA'' label claim is misleading to a majority of consumers because 
consumers believe the ``Product of USA'' claim means the product was 
made from animals born, raised, and slaughtered, and the meat, poultry, 
or egg product then processed, in the United States. Also as stated 
above, several consumer comments indicated belief that the ``Product of 
USA'' label should cover requirements on multi-ingredient products and 
without those requirements the label would remain misleading. 
Furthermore, the majority of commenters have supported the proposed 
rule overall, which includes support for the proposed criteria for 
multi-ingredient U.S. origin labels. Therefore, FSIS has determined the 
limited ``spices and flavorings'' exception for multi-ingredient 
products bearing ``Product of USA'' or ``Made in the USA'' labels will 
provide consumers clear, accurate information.

D. Trade Concerns

    Comment: Several foreign countries and foreign and domestic trade 
associations stated that the proposed rule would disrupt market 
integration between U.S. border states and Mexico or Canada.
    One foreign country and one foreign trade association stated that 
both U.S. and foreign livestock sectors would be detrimentally affected 
by the proposed rule, similar to the effects that were seen as a result 
of mandatory AMS COOL requirements. The commenters stated that the 
proposed rule could lead to shifting existing supply chains away from 
Canadian inputs. The foreign country further stated that the proposed 
rule would substantially harm small and medium sized processors in U.S. 
border states that either regularly or in emergencies rely on Canadian 
imports. The foreign country argued the U.S. border states would now 
need to rely upon U.S. products and animal flows farther away than 
closer Canadian ones. The foreign country stated that by disrupting the 
integrated supply chain, the proposed rule did not support shared 
sustainability or food security goals. The foreign country stated that 
the proposed rule did not adequately explore alternative options and 
noted that alternative options are available to support improved 
accuracy for consumers but without posing a risk to U.S.-Canada supply 
chains.
    Another foreign country stated that the proposed rule would 
disadvantage Mexican industry because U.S. meat products derived from 
imported Mexican cattle would no longer be eligible for ``Product of 
USA'' labeling, even if the cattle had spent most of their lives in the 
United States. The commenter stated that this would affect the export 
of live cattle to the United States. The foreign country stated that 
this disruption would include not only cattle and actual meat products, 
but also the grain Mexican ranchers import to feed cattle. The 
commenter alleged that the claims other than ``Product of USA'' and 
``Made in the USA'' available for product derived from imported Mexican 
cattle require detailed description of the product, which would impose 
additional costs and could have an impact on the conditions of 
competition of similar Mexican products with respect to U.S. products. 
The foreign country stated that once a major stakeholder adopts the 
voluntary label claim in its operational strategy, other stakeholders 
will be compelled by commercial-retail dynamics to follow suit, making 
the labeling ``de facto'' mandatory.
    Response: The final rule does not establish any mandatory country 
of origin labeling requirements. Producers are not required to make 
these claims. If certain products no longer qualify for a ``Product of 
USA'' or ``Made in the USA'' claim, producers can choose to use other 
U.S.-origin claims or not to

[[Page 19478]]

make any type of U.S.-origin claim. Therefore, analogies to AMS' 
mandatory COOL requirements and its alleged economic effects are 
inapposite. In addition, the rule does not affect or cover animal feed 
requirements.
    To address concerns on the impact to small businesses including 
processors, FSIS updated the Regulatory Flexibility Act Assessment with 
an analysis comparing the final rule's estimated cost for small 
businesses using U.S.-origin claims to the average revenue for small 
businesses in the industry. FSIS estimates that the final rule will not 
have a significant economic impact on small businesses. The final 
rule's estimated cost per small business represents 0.005 percent to 
0.01 percent of a small business' average revenue (please see the 
Regulatory Flexibility Act Assessment section).
    FSIS also notes that, as stated above, the Agency reviewed 
alternative criteria for the voluntary U.S.-origin claims, which led 
FSIS to propose the various options for label claims other than 
``Product of USA'' and ``Made in the USA'' on single ingredient and 
multi-ingredient products. These other options allow for various claims 
regarding the U.S. origin of FSIS-regulated products.
    Furthermore, notwithstanding that the U.S.-origin claims will be 
voluntary, any assertion about the market impact of the final rule or 
that ``Product of USA'' or ``Made in the USA'' claims will become de 
facto commercially mandatory is speculative. As explained in the 
proposed rule, the Agency's research on meat, poultry, and egg product 
labels in the U.S. retail market as of July 2022 found that 
approximately 12 percent included a U.S.-origin claim (88 FR 15290, 
15298).\14\ Therefore, as the significant majority of FSIS-regulated 
products currently do not bear U.S.-origin label claims, the market 
effects of the final rule's voluntary labeling requirements are not 
expected to have a significant impact.
---------------------------------------------------------------------------

    \14\ As explained in the proposed rule, the analysis identified 
two types of U.S.-origin claims: (1) Authorized claims, i.e., 
``Product of USA'' or ``Made in the 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 (88 FR 
15290, 15298).
---------------------------------------------------------------------------

    Comment: Several domestic trade associations that supported the 
proposed rule stated that FSIS should ensure that any final regulatory 
requirements are consistent with international trade agreements, such 
as the World Trade Organization (WTO) obligations and agreements among 
the United States, Canada, and Mexico. A few of these commenters stated 
that the Agency should avoid any potential resulting trade retaliation 
risk from trading partners.
    Several foreign countries and foreign and domestic trade 
associations that opposed the proposed rule stated similar concerns 
about potential retaliatory tariffs by Canada and Mexico. A few of 
these commenters stated that the similarity of the proposed rule to the 
mandatory COOL requirements would pose too great a risk for retaliatory 
actions. One domestic trade association argued that resulting 
retaliatory actions could be worse than those under mandatory COOL 
because of the greater number of industries and meat products affected.
    Several foreign countries and domestic and foreign trade 
associations specifically stated that the proposed rule could be 
considered a technical barrier to trade. A few of these commenters 
further stated that the proposed rule could lead to discrimination 
against imported production, inconsistent with the United States' 
obligations under the WTO Technical Barriers to Trade Agreement (TBT) 
and the United States-Mexico-Canada Agreement (USMCA) Chapter 11 on 
TBT, as well as Article III:4 of the General Agreement on Tariffs and 
Trade (GATT). One foreign country noted the proposed rule could be more 
trade-restrictive than necessary.
    Response: The final rule is consistent with the United States' 
trade obligations. As FSIS has explained above and in the proposed 
rule, the ``born, raised, slaughtered, and processed'' requirement for 
the use of the claims ``Product of USA'' and ``Made in the USA'' will 
ensure such labels convey accurate U.S.-origin information and prevent 
consumer confusion in the marketplace (88 FR 15290, 15301). Unlike 
mandatory COOL, the ``Product of USA'' and ``Made in the USA'' label 
claims in this final rule are voluntary. Additionally, this final rule 
provides establishments with the option to make U.S.-origin claims 
other than ``Product of USA'' or ``Made in the USA'' (qualified 
claims). Imported products are not subject to less favorable treatment 
than domestic products under the final rule. All FSIS-regulated 
domestic products will be subject to the same requirement that labels 
must be truthful and not false or misleading, consistent with U.S. 
statutes and FSIS regulations.
    Comment: One foreign country stated that the proposed rule would 
affect the tariff schedule regarding certain animals or products 
imported to the U.S. market. The commenter stated that the 
transformation that occurs from live cattle to a beef product clearly 
fulfills the definition of the United States International Trade 
Administration regarding ``substantial transformation'' to determine 
the origin of a good. The commenter stated that, therefore, in the case 
of Mexican cattle imported by the United States, the transformation 
includes a clear tariff shift. The commenter further noted that, for 
countries with which the United States has Free Trade Areas (FTAs), 
there is a transformation of the origin of the good based upon the FTA. 
Finally, the commenter stated that the proposed rule has the potential 
to affect ongoing regional and international efforts including, among 
others, equivalency recognition, mitigation and eradication of pests 
and diseases, and regulation harmonization.
    Response: The commenter's concerns regarding tariff schedules are 
outside the scope of this regulatory action. This final rule 
establishes requirements for the voluntary labeling of FSIS-regulated 
products bearing U.S.-origin claims. Issues related to rules of origin 
under other regulatory standards or international agreements are not 
applicable. Furthermore, the commenter's concern about potential 
effects on regional and international efforts is speculative. All FSIS-
regulated domestic products will be subject to the same requirement 
that labels must be truthful and not false or misleading, consistent 
with U.S. statutes and FSIS regulations.
    Comment: One foreign country requested that FSIS pause and 
reconsider the proposed rule to allow for consultations between 
officials from the United States and the foreign country to ensure 
fulsome technical exchange on the rule, and its implications.
    Response: FSIS undertook a transparent and robust proposed 
rulemaking process, and FSIS considered comments from all interested 
parties, including trading partners.

E. Exported Products

    Comment: A few domestic trade associations asked FSIS to clarify 
that exported products would be exempt from the requirements of the 
proposed rule. One commenter requested clarification on whether 
companies would still be eligible to export beef, should they choose 
not to use a voluntary U.S.-origin label claim. The commenter also 
requested clarification on whether implementation of the proposed rule 
would require the

[[Page 19479]]

creation of new export verification programs.
    Response: As explained in the proposed rule, the regulatory 
requirements for voluntary U.S.-origin label claims will not apply to 
products intended for export from the United States (88 FR 15290). 
Additional export requirements maintained by foreign countries that 
have been officially communicated to FSIS by the importing country can 
be accessed in the FSIS Export Library.\15\ FSIS will continue to 
conduct export certification activities for FSIS-regulated products 
intended for export to foreign countries.\16\ During this process, IPP 
verify that such products meet country-specific requirements, including 
labeling requirements, that have been officially communicated to FSIS 
by the importing country. Therefore, no new export verification 
programs are necessary under this final rule.
---------------------------------------------------------------------------

    \15\ FSIS Export Library, available at: https://www.fsis.usda.gov/inspection/import-export/import-export-library.
    \16\ See FSIS Directive 9000.1, rev. 2, Export Certification 
(August 1, 2018), available at: https://www.fsis.usda.gov/policy/fsis-directives/9000.1.
---------------------------------------------------------------------------

    Comment: Several domestic and foreign trade associations, foreign 
countries, and a private company argued that the proposed rule would 
act as a mandatory rule regarding exported products, as it would 
require segregation of finished products from imported animals. The 
commenters stated that this required segregation could lead to a future 
WTO case against the U.S. and potential retaliation from Canada and 
Mexico. One domestic trade association noted that such segregation 
requirements were both costly and the basis of WTO findings against the 
United States in previous trade disagreements. Finally, one domestic 
trade association stated that, due to the purportedly de facto 
mandatory segregation requirements, smaller producers would be denied 
the ability to use the voluntary ``Product of USA'' or ``Made in the 
USA'' U.S.-origin label claims.
    Response: FSIS disagrees that the final rule will establish any 
mandatory regulatory requirements or impose mandatory costs on 
industry. Under the final rule, official establishments and facilities 
will not be required to include a ``Product of USA'' or ``Made in the 
USA'' claim on the labels of FSIS-regulated products. Official 
establishments and facilities may also choose to use a U.S.-origin 
label claim other than ``Product of USA'' or ``Made in the USA,'' 
should they decide that meeting the requirements for a ``Product of 
USA'' or ``Made in the USA'' claim is not desirable or cost effective 
for a particular product. FSIS notes that the final rule does not 
require segregation of products from animals. Any costs associated with 
maintaining compliance with the final rule will be voluntary and 
incurred by official establishments and facilities that choose to use 
U.S.-origin label claims.
    Comment: One domestic trade association asked FSIS to consider a 
process for returned exported product or product that must be rerouted 
to domestic locations before being exported that may have ``Product of 
USA'' labeling export requirements, so that the product can be sold 
domestically.
    Response: As with all FSIS-regulated products, returned exported 
product or product that must be rerouted to domestic locations that 
bears a ``Product of USA'' label claim will need to meet all applicable 
FSIS requirements before being sold domestically. For example, an 
establishment may need to use a pressure sticker to correct the 
label.\17\
---------------------------------------------------------------------------

    \17\ See FSIS Directive 7221.1, Rev. 3, Prior Label Approval 
(January 18, 2023), available at: https://www.fsis.usda.gov/sites/default/files/media_file/documents/7221.1.pdf.
---------------------------------------------------------------------------

F. ``Egg Products'' Definition

    Comment: One domestic trade association, one foreign trade 
association, and one foreign country requested clarification on the 
definition of the term ``egg products'' for the purpose of the proposed 
rule, and a few of the commenters also asked whether table eggs would 
be subject to the proposed rule.
    Response: The regulatory requirements for egg products bearing 
voluntary U.S.-origin label claims will apply to ``egg products'' as 
defined by the EPIA (21 U.S.C. 1031 et seq.) and the FSIS egg products 
inspection regulations (See 9 CFR part 590). Under the EPIA at 21 
U.S.C. 1033(f), the term ``egg product'' means any ``dried, frozen, or 
liquid eggs, with or without added ingredients, excepting products 
which contain eggs only in a relatively small proportion or 
historically have not been, in the judgment of the Secretary, 
considered by consumers as products of the egg food industry, and which 
may be exempted by the Secretary under such conditions as he may 
prescribe to assure that the egg ingredients are not adulterated and 
such products are not represented as egg products.'' Table eggs are not 
FSIS-regulated products. Therefore, under the final rule, table eggs 
will not be subject to the regulatory requirements.

G. RTI Consumer Survey

    Comment: One domestic trade association stated that the RTI survey 
suggested that the proposed rule would not effectively educate 
consumers about the country of origin of meat or processed products. 
The commenter stated that the survey findings suggested that even if 
the proposed rule were adopted and the ``Product of USA'' label were 
used only on product derived from animals born in the United States, 
more than 50 percent of U.S. consumers still would not know the meaning 
of the label. The commenter also noted that only about 31 percent of 
the survey participants noticed the ``Product of USA'' label. 
Therefore, the commenter concluded, it is unlikely the rule would 
resolve consumer confusion about current voluntary U.S.-origin label 
claims.
    Response: FSIS disagrees with the commenter's categorization of 
what the survey results showed about consumers' understanding of 
voluntary U.S.-origin label claims. Only 16 percent of participants 
understood that current ``Product of USA'' label claims meant the 
product was processed in the United States. In contrast, about 56 
percent of the participants believed that the ``Product of USA'' label 
meant that 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. Together, these results 
suggest that the current ``Product of USA'' label claim is misleading 
to most consumers, and consumers believe the ``Product of USA'' claim 
means the product was derived from animals born, raised, and 
slaughtered, and the meat then processed, in the United States.
    FSIS further notes, as stated above, that this ``born, raised, 
processed, and slaughtered'' standard for the voluntary labeling of 
FSIS-regulated products with ``Product of USA'' and ``Made in the USA'' 
claims aligns with the 2021 FTC ``Made in the USA'' final rule that 
requires, in part, ``all or virtually all'' of a product's ingredients 
or components to be made and sourced in the United States for the 
product to bear ``Made in the USA'' and similar label claims (86 FR 
37022). Finally, as also stated above, the fact that the Agency 
received over 3,000 comments from consumers who generally supported the 
proposed rule further demonstrates the need to provide consistent 
regulatory definitions of voluntary U.S.-origin

[[Page 19480]]

labels claims for FSIS-regulated products.
    Comment: One domestic trade association stated that the survey 
results did not convincingly demonstrate that marketing labels, such as 
``Product of USA'' labels, are meaningfully recognized by consumers. 
The commenter noted that the survey results indicated most consumers 
were not aware of the U.S.-origin label unless prompted. The commenter 
stated that, contrary to the Agency's conclusion in the proposed rule, 
the survey did not indicate that consumers frequently noticed the 
``Product of USA'' label, simply that it was noticed.
    Response: FSIS disagrees that the survey failed to show that 
consumers frequently notice the ``Product of USA'' claim. The results 
from the survey showed that ``Product of USA'' label claims are 
noticeable and important to consumers. Results from the survey's aided 
recognition \18\ questions showed that 70 to 80 percent of eligible 
consumers correctly recalled seeing the ``Product of USA'' label 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 showed that about 1 in 3 eligible consumers reported seeing a 
``Product of USA'' claim when it was accompanied by 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. RTI measured participants' awareness of ``Product of USA'' 
claims, by their ability to accurately recall if a claim was shown. 
This measurement served as an indicator of their attention towards the 
claim. The results of both the aided and unaided tasks showed that the 
presence of a ``Product of USA'' claim in any form increased the 
participants' attention to the product, suggesting that such claims are 
recognizable and important to the participants.
---------------------------------------------------------------------------

    \18\ For the limited time exposure portion of the RTI survey, 
participants were randomly assigned to view one of four mock 
products that varied in terms of whether the ``Product of USA'' 
claim was present and, if present, the location and format of the 
``Product of USA'' claim. Participants were asked to list what 
labeling features they recalled. This first set of questions were 
considered unaided because they did not ask if the participant 
recalled seeing a specific image or phrase, and responses were open-
ended. Participants then answered a set of questions to indicate 
whether they saw specific images and phrases (including the 
``Product of USA'' claim). This second set of questions were 
considered aided because they asked the participant if they recalled 
seeing a specific image or phrase, and responses were closed ended 
(yes/no).
---------------------------------------------------------------------------

    Comment: One domestic trade association disagreed with FSIS' 
conclusion, based on the survey, that consumers may be willing to pay 
more for products with a voluntary ``Product of USA'' or ``Made in the 
USA'' label claim. The commenter asserted that consumer research 
consistently demonstrates that, while consumers may state that they are 
interested or willing to pay more for certain claims or 
characteristics, price is the most important factor when making actual 
purchasing decisions.
    Response: The Agency acknowledges that some of the marginal 
wiliness to pay (MWTP) estimates are likely higher than price premiums 
observed in the market. However, the Agency maintains that the RTI 
survey correctly concluded that some consumers may be willing to pay 
more for products with a ``Product of USA'' claim. This is supported by 
similar values found in the peer-reviewed literature \19\ and 
demonstrated by the hedonic price model explained in the rule. However, 
for the purposes of this rulemaking, the goal of the survey was to 
understand how consumers perceive the definition of the ``Product of 
USA'' label and the ranking of consumer preferences for labels. FSIS 
acknowledges that consumers consider U.S.-origin claims along with many 
other characteristics while purchasing products. FSIS also agrees that 
price is a primary factor affecting consumer purchasing decisions. For 
this reason, RTI randomized the price attribute in the Discrete Choice 
Experiment (DCE) to more accurately estimate the MWTP for the ``Product 
of USA'' label. While price is an important factor, so too are 
``Product of USA'' claims. The results from the RTI survey show 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 (88 FR 15290, 15294). The ``Product of USA'' 
requirements are intended to reduce false or misleading U.S.-origin 
labeling. This will reduce the market failures associated with 
incorrect and imperfect information. The changes will benefit consumers 
by aligning the voluntary ``Product of USA'' and ``Made in the USA'' 
label claims with the definition that consumers' likely expect, i.e., 
as product being derived from animals born, raised, slaughtered, and 
processed in the United States.
---------------------------------------------------------------------------

    \19\ (1) Loureiro, M.L., & Umberger, W.J. (2007). A choice 
experiment model for beef: What US consumer responses tell us about 
relative preferences for food safety, country-of-origin labeling and 
traceability. Food policy, 32(4), 496-514. (2) Lusk, J.L., 
Schroeder, T.C., & Tonsor, G.T. (2014). Distinguishing beliefs from 
preferences in food choice. European Review of Agricultural 
Economics, 41(4), 627-655.
---------------------------------------------------------------------------

    Comment: One foreign trade association raised several concerns 
related to the RTI study methodology, as well as the analysis and 
purported accuracy of its findings. The commenter also included 
information about a separate consumer survey that the commenter 
commissioned to inform their comments on the proposed rule. The 
separate consumer survey showed that consumers have a MWTP premium for 
the ``Product of USA'' claim over the base product price. However, the 
separate consumer survey estimated MWTP values that were less than the 
estimated MWTP values in the RTI survey. The commenter concluded that a 
new research approach is needed before FSIS can determine the benefits 
and costs of changing the Agency's policy on use of the ``Product of 
USA'' label claim.
    Response: FSIS notes that a few of the commenter's stated concerns 
about the RTI survey methodology were, in fact, editorial in nature. 
The Agency has reviewed these editorial comments and determined that 
they do not affect the results of the RTI survey or provide substantive 
information that the Agency could use to inform rulemaking. FSIS' 
responses to the commenter's other, non-editorial concerns follow:
    Comment: The commenter noted that in an unaided consumer survey 
recall question, a very small proportion of participants recalled the 
``Product of USA'' label on the package of ground beef they viewed, 
even though they were given 20 seconds to look at just one image, and 
even when ``Product of USA'' was next to a U.S. flag on the package. 
The commenter also argued that RTI did not provide a rationale for the 
consumer recall time of 20 seconds to notice the ``Product of USA'' 
label.
    Response: FSIS disagrees that the survey results suggested a lack 
of consumer notice and importance of the ``Product of USA'' label. FSIS 
recognizes the limitations of the limited time exposure (LTE) 
experiment used during the survey, in that the survey is not a real-
world setting. Given the nature of the experiment, RTI was only able to 
test recall when the ``Product of USA'' label was shown on the front of 
the package. RTI demonstrated that recall of ``Product of USA'' claims 
were statistically significant using the test of independent 
proportions. The 20-second time period was chosen based on input from 
an RTI expert in the LTE approach and data collected during an FSIS 
survey on safe handling

[[Page 19481]]

instructions pretesting. Further, FSIS notes that when participants 
were directly asked during the survey whether they look for the 
``Product of USA'' label when shopping for ground beef, 45 percent of 
eligible consumers responded ``most of the time'' or ``always'' and 25 
percent responded ``sometimes.'' These results provided additional 
evidence that consumers rely on the ``Product of USA'' label when 
making purchase decisions.
    Comment: The commenter stated that the MWTP for the ``Product of 
USA'' label resulting from the DCE models was too high compared to the 
price.
    Response: FSIS disagrees. The commenter incorrectly summed the MWTP 
from two different DCE models described in the survey, $1.69 in DCE1 
and $1.15 in DCE2 for ground beef. These models were two different 
discrete choice experiments with different respondent groups and 
measured two different preferences. Therefore, the results of each 
experiment were independent from one another, and the results should 
not be summed.
    Further, the individual MWTP values are similar to those found in 
the peer-reviewed literature. Ideally, FSIS would compare estimates to 
other studies that investigate the MWTP for the ``Product of USA'' 
label. However, such a direct comparison is not possible given that no 
previous study has investigated the MWTP for products with this 
specific label. But, estimates obtained from other DCEs from the 
literature could be informative. For example, in a hypothetical choice 
experiment, Loureiro & Umberger \20\ found that the average U.S. 
respondent in their study was willing to pay $2.57 (2003 dollars) per 
pound more for a ribeye steak that featured a country of origin label 
over an otherwise identical steak that did not feature a country of 
origin label. Alternatively, in a non-hypothetical choice experiment, 
Lusk et al.\21\ found that U.S. consumers in their sample were willing 
to pay $1.68 more for a 12 oz. beef steak that was of United States 
origin than an otherwise identical ``weighted average origin'' steak. 
Although neither of these estimates are directly comparable to the 
MWTPs estimated in the RTI survey, they illustrate that the estimated 
MWTPs are not excessively high.
---------------------------------------------------------------------------

    \20\ Loureiro, M.L., & Umberger, W.J. (2007). A choice 
experiment model for beef: What US consumer responses tell us about 
relative preferences for food safety, country-of-origin labeling and 
traceability. Food policy, 32(4), 496-514.
    \21\ Lusk, J.L., Schroeder, T.C., & Tonsor, G.T. (2014). 
Distinguishing beliefs from preferences in food choice. European 
Review of Agricultural Economics, 41(4), 627-655.
---------------------------------------------------------------------------

    The Agency acknowledges that some of the estimated MWTP are likely 
higher than real world price premiums. This is demonstrated by the 
hedonic price model explained in the rule. This difference is likely 
because the estimated MWTP rely on stated preferences and may not 
reflect actual purchasing preferences in real life situations, as the 
survey respondents do not have their own money on the line. However, 
FSIS notes that, as explained in the proposed rule, the Agency did not 
rely on the MWTP results when calculating costs and benefits (88 FR 
15290, 15302). Rather, FSIS used the ranking of preferences to inform 
its rulemaking.
    Comment: The commenter argued that there were inaccuracies in the 
survey report description of the random utility models and mixed logit 
models that RTI used to test the hypotheses and estimate the MWTP. The 
commenter argued that the purported inaccuracies undermine confidence 
in the DCE survey results.
    Response: FSIS disagrees that the RTI report description contains 
inaccuracies. Rather, the report description accurately explains: (1) 
that utility is composed of observable and unobservable components 
(Equation 2.1), (2) that the likelihood a person will choose one 
product over another depends on differences in utility of the two 
products (Equation 2.2), and (3) that observable utility is a linear 
function of product attributes (Equations 2.3 and 2.4). FSIS notes that 
these equations are all presented before mixed logit modeling is 
introduced. Therefore, these equations are accurate. Further, Equations 
2.1 and 2.2 have been used in a peer-reviewed publication that used 
mixed logit modeling and was co-authored by RTI research personnel.\22\ 
In addition, RTI's use of the mixed logit model enhances the standard 
approach of using conditional logit models in discrete choice 
experiments. The mixed logit model allows greater flexibility through 
relaxed assumption and extends the standard conditional logit model by 
allowing one or more of the parameters in the model to be randomly 
distributed.\23\
---------------------------------------------------------------------------

    \22\ See Finkelstein, E.A., Mansfield, C., Wood, D., Rowe, B., 
Chay, J., & Ozdemir, S. (2017). Trade[hyphen]Offs Between Civil 
Liberties And National Security: A Discrete Choice Experiment. 
Contemporary economic policy, 35(2), 292-311.
    \23\ Train, Kenneth E. 2009. Discrete Choice Methods with 
Simulation, Cambridge, England: Cambridge University Press.
---------------------------------------------------------------------------

    Comment: The commenter stated that RTI failed to provide reasoning 
for excluding one-third of DCE1 participants from its analysis.
    Response: Explanations as to why RTI excluded participants from the 
analysis are provided in the final report; section 2.4 specifically 
details why RTI correctly excluded participants that participated in 
the soft launch from the DCE analyses.\24\ These participants were 
excluded because the soft launch survey did not ask if the respondents 
had purchased the assigned DCE product within the past 6 months. The 
relevance of this question was revealed after RTI analyzed the results 
of the soft launch and added the question to the final survey. 
Excluding the soft launch participants ensured the survey results were 
based on the intended survey population.\25\ More importantly, 
participant population used in DCE1 was robust enough to produce 
statistically sufficient results.
---------------------------------------------------------------------------

    \24\ 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.
    \25\ The survey population was defined as adult consumers who do 
at least half of the grocery shopping in the household and had 
purchased the randomly assigned DCE product within the past 6 
months.
---------------------------------------------------------------------------

    Comment: The commenter questioned RTI's methodology for the DCEs. 
Specifically, the commenter disagreed with how RTI handled participants 
who selected ``neither'' as a choice in the two DCEs.
    Response: RTI used a standard method to control for the 
participants who selected the ``neither'' choice. RTI accounted for the 
``neither'' choice by introducing an alternative-specific constant into 
the utility function for the ``neither'' choice. This constant allowed 
RTI to track and monitor ``neither'' responses and ensure results were 
statistically sufficient. RTI considered this method as the most 
straightforward approach to address such opt-out effects.\26\
---------------------------------------------------------------------------

    \26\ Campbell, D., & Erdem, S. (2019). Including opt-out options 
in discrete choice experiments: issues to consider. The Patient-
Patient-Centered Outcomes Research, 12, 1-14.
---------------------------------------------------------------------------

    Comment: The commenter expressed concern that MWTP estimates for 
various attributes measured in DCE1 and DCE2 were in strong statistical 
contradiction with one another.
    Response: The commenter's concerns are unfounded. The findings the 
commenter cited resulted from two different sample groups, and the 
differences do not invalidate the findings. Further, the commenter's 
concerns around attributes other than those associated with ``Product 
of USA'' claims are beyond the scope of the RTI

[[Page 19482]]

survey and not relevant to the Agency's rulemaking.
    Comment: The commenter argued that the RTI survey MWTP findings are 
generalizable only to participants who typically purchase 85 percent 
lean/15 percent fat ground beef, not to consumers of all product types. 
To support this assertion, the commenter cited results of its own 
commissioned survey, which the commenter argued showed the MWTP for 
ground beef with a ``Product of USA'' label would likely be lower for 
consumers who purchase higher fat ground beef, and that it is likely 
that the MWTP depends on the price a consumer typically pays for ground 
beef.
    Response: FSIS agrees that a single MWTP estimate cannot be 
generalized across all product types. However, the RTI survey included 
three example products: ground beef, NY strip steak, and pork 
tenderloin. These example products resulted in data for two species and 
a range of product values. The RTI survey found that all three of these 
products resulted in positive MWTPs for the ``Product of USA'' claim. 
The resulting per pound MWTPs were $1.69 for ground beef; $1.71 for 
pork tenderloin; and $3.21 for NY strip steak (see table 9 in the 
Expected Benefit of the Final Rule section).
    However, as explained in the proposed rule, the goal of the RTI 
survey was to understand how consumers perceive the definition of the 
``Product of USA'' label and the ranking of preferences (88 FR 15290, 
15301), and this ranking can be generalized to similar products. For 
example, if a consumer thinks that a ``Product of USA'' claim displayed 
on an 85 percent lean/15 percent fat ground beef product label meant 
that the originating animal was born, raised, processed, and 
slaughtered in the United States, the consumer likely would think that 
a ``Product of USA'' claim has the same meaning when displayed on a 90 
percent lean/10 percent fat ground beef product. Further, FSIS notes 
possible problems with the methodology and purported findings of the 
commenter's commissioned study and resulting MWTP estimates. Although 
RTI and FSIS do not have access to the survey instrument used, the 
report included with the comment submission seems to indicate that 
respondents were simply asked how much they would pay for different 
meat products. Specifically, as the report notes, ``respondents were 
shown different versions of ground beef packages and asked how much 
they would pay for each version.'' If that statement is correct, this 
question format is known as an open-ended contingent valuation 
question. This question format is known to be associated with a number 
of problems. Specifically, these questions are difficult for 
respondents to answer and are not compatible with assessing purchasing 
incentives. These problems led to a recommendation against using this 
question format in the 1993 ``Report of the National Oceanic and 
Atmospheric Administration (NOAA) Panel on Contingent Valuation.'' \27\
---------------------------------------------------------------------------

    \27\ Whitehead, J.C. (2006). A practitioner's primer on the 
contingent valuation method. Handbook on contingent valuation, 66-
91; Arrow, K., Solow, R., Portney, P.R., Leamer, E.E., Radner, R., & 
Schuman, H. (1993). Report of the NOAA panel on contingent 
valuation. Federal Register, 58(10), 4601-4614.
---------------------------------------------------------------------------

    Comment: The commenter stated concerns that the RTI survey results 
on the differences in the MWTP between the two surveyed groups was not 
statistically significant, because RTI used an insufficient sample 
size.
    Response: The commenter's concerns are unfounded. The differences 
in MWTP between the two groups was a finding of the model, not an 
error. Although the sample size of one group may be slightly lower, the 
results show consumers are willing to pay more for more product 
information.

H. Cost Benefit Analysis

    Comment: Several commenters, including domestic and foreign trade 
associations and foreign countries, stated that the estimated 
additional costs explained in the cost benefit analysis failed to 
consider several practical issues that producers would experience under 
the proposed rule, which they stated would be similar to issues under 
mandatory labeling programs. For example, a few of the commenters 
stated that, under the AMS mandatory COOL program, producers have been 
forced to limit the facilities, times, and quantities of animals to be 
slaughtered to segregate meat products that can be labeled as ``Product 
of the U.S.A.'' from those that cannot. One foreign country also cited 
as a possible additional de facto mandatory cost the relabeling of 
products in the event of supply chain disruptions.
    Response: FSIS disagrees that costs associated with the AMS COOL 
program or other mandatory labeling programs can be used to estimate 
anticipated costs associated with the final rule, which will impose no 
mandatory costs for industry. Under the final rule, official 
establishments and facilities will not need to include these voluntary 
claims on the labels of FSIS-regulated products. Official 
establishments can also choose to modify existing ``Product of USA'' or 
``Made in the USA'' claims as necessary, should they decide that 
meeting the requirements for these specific claims is not beneficial or 
practical for a particular product.
    Comment: Several commenters stated that the Agency failed to 
account for likely costs associated with the proposed rule. For 
example, according to a few domestic and foreign trade associations and 
foreign countries, companies would likely need to adopt costly changes 
in their production, slaughter, and processing practices to segregate 
animals and products through the supply chain. One domestic trade 
association cited possible costs related to conflicting labeling 
requirements among the United States and importing countries. A few 
domestic trade associations raised concerns about possible costs 
specific to companies that want to label ``local'' products with State 
or region-origin claims and may incur costs from using longer supply 
chains or sourcing less commercially available domestic ingredients.
    Response: As explained in the proposed rule and the final cost 
benefit analysis, FSIS recognizes that official establishments and 
facilities that choose to use U.S.-origin label claims may incur costs 
based on this rule (88 FR 15290, 15298). However, the final rule will 
also benefit consumers and producers by establishing a requirement for 
the ``Product of USA'' label claim that will more accurately convey 
U.S.-origin product information and that is aligned with consumers' 
understanding of that claim in the marketplace. FSIS disagrees that 
implementation of this final rule will cause industry to adopt costly 
changes in their production, slaughter, and processing practices to 
segregate animals and products through the supply chain. Given the 
likely small premiums from and between origin claims, businesses lack 
an incentive to require their suppliers to make these changes. The 
Agency's hedonic price model, as explained in the proposed rule, 
estimated a price premium of 2.5 percent, or 10 cents per pound, for 
claims exclusive to U.S. origin (88 FR 15290, 15302). The model also 
estimated a price premium of 4.2 percent, or 16 cents per pound, for a 
claim that included multi-country origin claims referring to the U.S. 
and other countries.
    FSIS further notes that the voluntary final rule does not impose 
any segregation requirements for products or originating animals. As 
another commenter on the proposed rule stated, if an establishment 
thinks that compliance costs for the voluntary requirements will 
outweigh price premiums, it can simply decide not to

[[Page 19483]]

use a voluntary U.S.-origin label claim. State and region-origin claims 
were included in the rule's cost analysis. While one commenter 
described the possibility of increased costs, other commenters noted 
that use of origin claims will increase benefits.
    Comment: One trade association requested the Agency explain whether 
it considered how the proposed rule may impact current market access 
for U.S. beef exports, and how a reduction in market access may 
negatively affect the profitability of U.S. cattle producers. The trade 
association also stated concern that packers and feedlots may start 
discounting cattle that do not spend their entire lives in the United 
States.
    Response: FSIS notes that, as explained in the proposed rule, the 
regulatory requirements for U.S.-origin label claims will not apply to 
products intended for export from the United States (88 FR 15290, 
15291). FSIS will continue to conduct export certification activities 
for FSIS-regulated products intended for export to foreign 
countries.\28\
---------------------------------------------------------------------------

    \28\ See FSIS Directive 9000.1, Rev. 2, Export Certification 
(August 1, 2018), available at: https://www.fsis.usda.gov/policy/fsis-directives/9000.1.
---------------------------------------------------------------------------

    FSIS does not expect packers and feedlots to start discounting 
cattle that do not spend their entire lives in the United States given 
the limited price premiums associated with these voluntary claims. The 
Agency's hedonic price model, as explained in the proposed rule and in 
this final rule, estimated a price premium of 2.5 percent, or 10 cents 
per pound, for claims exclusive to U.S. origin (88 FR 15290, 15302). 
The model also estimated a price premium of 4.2 percent, or 16 cents 
per pound, for a claim other than ``Product of USA'' or ``Made in the 
USA'' that included multi-country origin claims referring to the U.S. 
and other countries. Based on these results, consumers value foreign-
sourced products, which suggests that there is no incentive to change 
purchasing of foreign sourced cattle, or packers and feedlots to 
discount this cattle.
    Comment: One domestic trade association noted that the cost benefit 
analysis addressed retail labeling costs, but the commenter stated that 
the proposed rule would affect all labels, including those along the 
supply chain to support retail labels.
    Response: The labels with which the commenter was concerned are 
included in the range of labels impacted by this rule (88 FR 15290, 
15298). The cost benefit analysis considered the relabeling costs 
associated with 88,537 to 108,211 labels that include voluntary U.S.-
origin claims. The cost benefit analysis also included recordkeeping 
costs, which encompasses the relevant supply chain cost to support 
labels. Therefore, FSIS accounted for all relevant costs in the final 
rule.
    Comment: One domestic trade association noted that the Agency 
assumed in the cost benefit analysis that brands with fewer than 50 
Universal Product Codes (UPCs) associated with FSIS-regulated products 
were small businesses. The commenter stated that this was an 
unsupported assumption, as the number of UPCs associated with a brand 
does not always indicate the size of a business, and small businesses 
may co-pack for other brands and supply to other companies. Further, 
the commenter stated, large businesses may not produce many directly-
branded products but may supply many other companies that use many 
UPCs. The commenter also stated the number of UPCs provides no 
indication about the volume of product sold for each UPC.
    Response: FSIS acknowledges that the number of small businesses is 
an estimate and relies on assumptions, but in absence of better data, 
FSIS is using this estimate to calculate the number of small businesses 
that may be affected by the final rule. FSIS does not have access to 
proprietary data reflecting the sales volume of brands, including those 
with authorized or qualified label claims, to calculate business profit 
margins. Also, commenters did not provide FSIS with sales data leading 
to more refined estimates.
    Comment: One domestic trade association stated that although FSIS 
considered the cost of relabeling, the cost benefit analysis did not 
evaluate the lost margin cost of no longer using the voluntary 
``Product of USA'' label claim. Therefore, according to the commenter, 
the Agency failed to evaluate lost value for those operations that will 
no longer be allowed to use the claim.
    Response: Under the final rule, FSIS expects those businesses whose 
product does not meet the requirements for the ``Product of USA'' or 
``Made in the USA'' claims (authorized claims) to be able to use claims 
other than ``Product of USA'' or ``Made in the USA''. As explained in 
the proposed rule, the Agency's hedonic price model found a price 
premium of 2.5 percent, or 10 cents per pound, for claims exclusive to 
U.S. origin (88 FR 15290, 15302). The model found a higher price 
premium of 4.2 percent, or 16 cents per pound, for multi-country origin 
claims referring to the United States and other countries. These 
premium values demonstrate that ``Product of USA'' or ``Made in the 
USA'' claims and other multi-country origin claims garner similar price 
premiums.

I. Recordkeeping Requirements

Types of Documentation and Recordkeeping Costs
    Comment: One domestic trade association stated that supporting 
documentation requirements should be simple, consistent with existing 
practices, and outlined in guidance, not regulation. The commenter also 
stated that the requirements should be limited to documentation that is 
needed to meet the standard that labels are truthful and not 
misleading. One other domestic trade association stated that the only 
documentation required for verifying a ``Product of USA'' or ``Made in 
the USA'' label claim for beef products should be a declaration that 
the live animal bore no import markings when presented for slaughter at 
a U.S. slaughter establishment.
    Response: The final rule establishes general recordkeeping 
requirements that provide flexibility for official establishments and 
facilities that choose to use a voluntary U.S.-origin label claim on 
FSIS-regulated products. The new regulatory text provides examples of 
the types of documentation that may be maintained to support a U.S.-
origin label claim. Official establishments and facilities may choose 
which types of documentation to maintain, based on the particular U.S.-
origin claim they seek to use and other considerations relevant to the 
product. As explained in the proposed rule, FSIS will accept existing 
documentation to demonstrate compliance with one or more of the 
regulatory requirements, such as records an official establishment or 
facility already may maintain to comply with other FSIS regulations or 
as part of its participation in another federal program (88 FR 15290, 
15296). FSIS has updated its labeling guidance on the use of voluntary 
U.S.-origin label claims, to provide more examples of the types of 
documentation that official establishments and facilities may maintain 
to support use of the claims. The updated guidance is available on the 
FSIS website at: https://www.fsis.usda.gov/guidelines/2024-0001.
    Comment: One domestic trade association stated that the Agency 
should explain whether, under the proposed rule, IPP would perform 
verification activities on farms and feedlots. The commenter also 
requested clarification on the types of

[[Page 19484]]

documentation that farms and feedlots would be required to provide to 
the processor to verify that supporting documentation complies with the 
proposed requirements.
    Response: FSIS IPP will perform routine verification activities at 
establishments to verify that labels bearing voluntary U.S.-origin 
claims comply with labeling requirements. All labels that are 
generically approved under the FSIS regulations are subject to such 
establishment-based IPP verification procedures. FSIS will not perform 
verification activities at farms or feedlots. Establishments and 
facilities will need to obtain from farms and feedlots documentation 
that will support the recordkeeping requirements for the use of 
voluntary U.S.-origin claims, such as load sheets and grower records 
(88 FR 15290, 15297).
    Comment: A few domestic and foreign trade associations asserted 
that the proposed recordkeeping requirements were too costly, and that 
the burden of recordkeeping and related compliance costs would also 
vary based on an operation's location, type, and size.
    Response: FSIS disagrees that the recordkeeping requirements are 
too costly. The use of origin claims will continue to be generically 
approved. The Agency expects many businesses will use existing records 
to support origin claims. Alternatively, businesses can reduce their 
recordkeeping costs by adjusting the claim that they use, from a 
``Product of USA'' or ``Made in the USA'' claim (authorized claim), to 
another U.S.-origin claim (qualified claim). As explained in the 
proposed rule, the Agency's hedonic price model found similar price 
premiums for ``Product of USA'' claims and other U.S.-origin claims (88 
FR 15290, 15302).
Traceability and Confidentiality
    Comment: Several domestic trade associations stated concerns about 
the feasibility of maintaining records that provide full traceability 
back to originating farms and producers. A few of these commenters also 
stated concerns about the potential for recordkeeping requirements to 
compromise confidentiality of business operations information. One 
commenter stated that, unlike the current voluntary USDA AMS Processed 
Verified Program (PVP) and Quality Assessment Programs (QSA), in which 
information disclosure is made to a third-party verifying agent, 
producers subject to the proposed regulatory requirements may be forced 
to more widely disclose proprietary information.
    Response: FSIS disagrees that the voluntary U.S.-origin labeling 
requirements will impose infeasible recordkeeping requirements with 
regards to traceability. Establishments are already required to keep 
records of all labeling, both generically approved and sketch-approved 
by FSIS, along with the product formulation and processing procedures, 
as prescribed in 9 CFR 320.1(b)(11), 381.175(b)(6), and 412.1. Further, 
under 9 CFR 412.1(a), establishments must keep any additional 
documentation needed to support that the labels are consistent with 
FSIS regulations. Establishments choosing to use a U.S.-origin label 
claim on a FSIS-regulated product will be required to maintain records 
that provide sufficient information to support that the labels are 
consistent with FSIS regulations.
    FSIS also disagrees that producers subject to the regulatory 
requirements may be forced to disclose proprietary information. FSIS 
protects the confidentiality of proprietary or confidential industry 
information to which Agency personnel are afforded privileged access 
while carrying out their responsibilities.\29\ This information 
includes background information that may be provided during the label 
approval process or maintained as part of generic label approval 
requirements. As with all business records containing proprietary or 
confidential information that official establishments and facilities 
are required to maintain under FSIS labeling regulations, records 
maintained to meet the U.S.-origin labeling requirements will be 
protected from disclosure.
---------------------------------------------------------------------------

    \29\ See FSIS Directive 4635.6, Safeguarding Confidential 
Industry Information (March 25, 1985), available at: https://www.fsis.usda.gov/sites/default/files/media_file/2020-08/4735.6.pdf.
---------------------------------------------------------------------------

Third-Party Certification
    Comment: In the proposed rule, FSIS requested comment on whether 
the Agency should allow or require third-party certification for U.S.-
origin label claims. In response, several domestic trade associations 
stated that FSIS should not require third-party certification of U.S.-
origin claims. The commenters noted that FSIS does not currently 
require third-party certification for most label claims, and they 
stated that requiring third-party certification would be overly 
burdensome and expensive. One commenter also noted that a possible 
third-party certification requirement was not evaluated in the cost 
benefit analysis. In contrast, a few domestic trade associations stated 
that FSIS should allow or require USDA verification of voluntary U.S.-
origin label claims, such as through the USDA AMS PVP. These commenters 
stated that, without meaningful audit and verification, the potential 
for ambiguous and inconsistent labeling of FSIS products would continue 
under the proposed rule.
    Response: After reviewing the comments, FSIS has decided at this 
time not to require third-party certification for U.S.-origin label 
claims. Currently, FSIS only requires third-party certification for 
non-GMO claims because of the complexity of those claims. Current label 
recordkeeping requirements and Agency verification procedures for the 
use of origin label claims will be sufficient to ensure compliance with 
requirements for these label claims. As with all label claims, 
establishments have the option of obtaining third-party certification 
of their labeling claims or participating in applicable AMS PVP 
programs. Under the final rule, establishments using a voluntary U.S.-
origin claim on labels of FSIS-regulated products must maintain 
documentation sufficient to demonstrate that the product complies with 
regulatory requirements.

J. U.S. State, Territory, and Locality-Origin Claims

    Comment: A few domestic trade associations supported the inclusion 
of voluntary U.S. State and region-origin claims within the scope of 
the proposed rule. A few other domestic trade associations opposed the 
inclusion of U.S. State and region-origin claims. One domestic trade 
association stated concern about potential labeling compliance costs 
for producers of State or region-origin products. One other domestic 
trade association stated that FSIS should undertake separate rulemaking 
on the issue of State and region-origin label claims.
    Response: FSIS disagrees that separate rulemaking is needed to 
address the use of voluntary U.S. State, Territory, and locality-origin 
label claims on FSIS-regulated products. Courts have determined that 
Agencies may make changes to the final rule that are logical outgrowths 
of the proposed rule, and do not require a separate notice and comment 
period.\30\ As stated above, FSIS received comments supporting the 
inclusion of U.S. State and region-origin claims within the scope of 
the proposed rule. Also as stated above, the proposed rule directly 
addressed requirements for U.S. State and region-origin claims, and 
FSIS originally proposed to clarify these

[[Page 19485]]

requirements in Agency guidance (88 FR 15290, 15296). Further, a label 
claim indicating the specific U.S. State, U.S. Territory, or U.S. 
locality origin of a FSIS-regulated product or product component is 
inherently a U.S.-origin label claim. Therefore, it is appropriate, and 
a logical outgrowth of comments received on the proposed rule to 
include such claims within the scope of this final rule. This rule will 
align Agency labeling requirements for specific U.S. State, Territory, 
and locality-origin claims with the requirements for broad U.S.-origin 
label claims, which will further the Agency's intent to reduce consumer 
confusion about what the ``Product of . . .'' label means.
---------------------------------------------------------------------------

    \30\ Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 
(2007).
---------------------------------------------------------------------------

    As explained in the proposed rule, currently, State and region-
origin 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, 
Territory, or locality in which the product was prepared (88 FR 15290, 
15296). The final rule requirements for U.S. State, territory, and 
locality-origin claims are consistent with the proposed rule. Under the 
final rule, FSIS-regulated products labeled with ''Product of . . .'' 
or ``Made in the . . .'' claims referring to the origin of a U.S. 
State, Territory, or locality will need to meet the regulatory criteria 
under 9 CFR 412.3(a) and (b) for these claims (e.g., a single 
ingredient product labeled with such a claim will need to be derived 
from an animal born, raised, slaughtered, and processed in the State, 
Territory, or locality). Label claims other than ``Product of . . .'' 
or ``Made in the . . .'' that refer to the U.S. State, territory, or 
locality-origin components of a FSIS-regulated product's preparation 
and processing will need to meet the criteria under 412.3(c) for these 
claims (i.e., the claims will need to include a description of the 
preparation and processing steps that occurred in the State, Territory, 
or locality upon which the claim is made.) This requirement will ensure 
consistent U.S.-origin labeling, which includes origin labeling for all 
U.S. States, Territories, and localities, for FSIS-regulated products. 
FSIS has revised the proposed regulatory text in 9 CFR 412.3, as well 
as the existing regulatory text in 9 CFR 317.8(b)(1) and 9 CFR 
381.129(b)(2),\31\ to clarify these requirements for voluntary label 
use of U.S. State, territory, and locality-origin claims.
---------------------------------------------------------------------------

    \31\ While the provisions in 9 CFR 317.8(b)(1) prohibit the 
false or misleading labeling of FSIS-regulated products generally, 
the FSIS regulations at 9 CFR 381.129(b)(2) also prohibit the false 
or misleading labeling of FSIS-regulated poultry products 
specifically.
---------------------------------------------------------------------------

K. U.S. Flag Imagery

    Comment: A few domestic trade associations asked the Agency to 
clarify when display of the U.S. flag on labels of FSIS-regulated 
products would be considered use of a voluntary ``Product of USA,'' 
``Made in the USA,'' or other U.S.-origin claim. One of the commenters 
asked how the Agency's policy on U.S. flag imagery would correspond to 
U.S. State and region-origin label claims.
    Response: Under current FSIS policy, display of the U.S. flag on 
labels of FSIS-regulated products is considered the display of a 
geographic landmark claim. Under the FSIS regulations, geographic 
landmark label claims must comply with the requirements in 9 CFR 
317.8(b)(1) and 381.129(b)(2) to properly identify the State, 
territory, or locality in which the product was prepared or produced. 
Geographic landmark label claims, including flags, are eligible for 
generic approval under the regulations (88 FR 2798, 2805).
    Under the final rule, the voluntary display of the U.S. flag, or a 
U.S. State or territory flag, on FSIS-regulated products will be 
considered use of a voluntary origin claim of the United States or the 
relevant U.S. State or territory. Specifically, display of a standalone 
image of the U.S. flag, or a U.S. State or Territory flag, will need to 
meet the requirements under 9 CFR 412.3(a) and (b) for use of voluntary 
``Product of . . .'' and ``Made in . . .'' claims (e.g., a single-
ingredient product labeled with a standalone display of the U.S. flag 
must be derived from an animal born, raised, slaughtered, and processed 
in the United States). The display of an image of the U.S. flag, or a 
U.S. State or territory flag, may be used to designate the domestic 
origin of a component of a FSIS-regulated product's preparation and 
processing, but the flag image will need to be accompanied by a 
description of the preparation and processing steps that occurred in 
the United States, or the relevant U.S. State or territory, upon which 
the claim is being made (e.g., display of the New York State flag on a 
sausage product with the accompanying description ``Sliced and Packaged 
in New York''). FSIS has updated its labeling guidance on the use of 
voluntary U.S.-origin label claims, to provide a visual example of how 
the display of a U.S. flag, or a U.S. State or territory flag, may be 
used to designate the domestic origin of a component of a FSIS-
regulated product's preparation and processing. The updated guidance is 
available on the FSIS website at: https://www.fsis.usda.gov/guidelines/2024-0001.
    FSIS has revised the proposed regulatory text in 9 CFR 412.3 to 
clarify the requirements for the voluntary label display of the U.S. 
flag, or a U.S. State or territory flag, on FSIS-regulated products. 
FSIS has also revised the regulatory text in 9 CFR 317.8(b)(1) and 
381.129(b)(2), relating to labeling that indicates a product's 
geographic significance or locality, to clarify the requirements for 
such voluntary label use of U.S., U.S. State, and U.S. territory flags. 
As with all labels that are generically approved under the FSIS 
regulations, label use of the U.S. flag and U.S. State and territory 
flags will be subject to routine verification activities at 
establishments by IPP to verify that the labels comply with labeling 
requirements.\32\ The labels must be truthful and not misleading.
---------------------------------------------------------------------------

    \32\ See FSIS Directive 7221.1, Rev. 3, Prior Label Approval 
(January 18, 2023), available at: https://www.fsis.usda.gov/policy/fsis-directives/7221.1.
---------------------------------------------------------------------------

    As stated above, label displays of the U.S. flag, or a U.S. State 
or territory flag, are inherently claims indicating a product's origin. 
As results from the consumer survey show, the final rule requirements 
for the voluntary use of the U.S. flag, or a U.S. State or territory 
flag, on FSIS-regulated products will ensure that the labels are 
consistent with consumers' understanding and expectations of products 
labeled with such flags. Results from the consumer survey's unaided 
recall questions showed 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 (88 FR 15290, 15301). These results suggest that consumers are 
interested in label displays of the U.S. flag and associate such 
labeling with their understanding of what the ``Product of USA'' label 
means.

L. Cell-Cultured Meat Products

    Comment: Several animal welfare and policy organizations asked FSIS 
to address how, under the proposed rule, the Agency will consider FSIS-
regulated cell-cultured meat and poultry products that bear voluntary 
U.S.-origin label claims. One commenter stated that cell-cultured 
products should be eligible for generic label approval when they are 
processed in the United States. One other commenter stated that, as a 
direct competitor to traditionally produced meat and poultry products, 
cell-cultured

[[Page 19486]]

meat and poultry products should be eligible to bear the same voluntary 
U.S.-origin label claims as FSIS-regulated slaughtered products, and 
that the process should not be more burdensome.
    Response: As FSIS has explained in the advance notice of proposed 
rulemaking concerning these products, the labels of FSIS-regulated 
cell-cultured meat and poultry products are not currently eligible for 
generic approval under the Agency's prior label approval system (86 FR 
49491, 49493, September 3, 2021). Therefore, FSIS will review all 
labels and claims on these products before they can be used in commerce 
to ensure they are truthful and not misleading. The criteria for use of 
voluntary U.S.-origin claims under this final rule will apply to cell-
cultured product under FSIS jurisdiction. The voluntary label claims 
``Product of USA'' and ``Made in the USA'' will be allowed on cell-
cultured products only if all the preparation and processing steps for 
the cells occurred in the United States.

M. Enforcement of Regulatory Requirements

    Comment: A few domestic trade associations requested FSIS clarify 
how the Agency intends to enforce violations of the new labeling 
requirements, such as when documentation is determined to be 
insufficient to support a voluntary U.S.-origin label claim.
    Response: For enforcement of this rule, FSIS will follow existing 
FSIS regulations and FSIS Directives. When a label is not in compliance 
with the regulatory requirements, IPP are to document the 
noncompliance, in accordance with 9 CFR 412.1.\33\ In addition, IPP are 
to retain any product bearing that label and require establishments to 
update labels that are not in compliance with FSIS' labeling 
regulations. Before the product may enter commerce, the establishment 
must take corrective actions. Further, in the case of intentional non-
compliance with FSIS labeling regulations, the Agency may take action 
to control misbranded products and take enforcement action under the 
FSIS Rules of Practice (9 CFR part 500).
---------------------------------------------------------------------------

    \33\ See FSIS Directive 7221.1, Rev. 3, Prior Label Approval 
(January 18, 2023), available at: https://www.fsis.usda.gov/policy/fsis-directives/7221.1.
---------------------------------------------------------------------------

N. Implementation of Regulatory Requirements

    Comment: A few domestic trade associations stated that industry 
will need sufficient time to implement the required changes under the 
proposed rule. One trade association supported the Agency's plan, as 
explained in the proposed rule, to use the predetermined uniform 
compliance date schedule for implementation of the regulatory 
requirements (88 FR 15290, 15297). One foreign country requested that, 
if the final rule is finalized, FSIS delay the timeline for 
implementation to allow producers to better prepare for the 
requirements.
    Response: As explained in the proposed rule, FSIS generally uses a 
uniform compliance date for new labeling regulations (88 FR 15290, 
15297). The uniform compliance date is intended to minimize the 
economic impact of labeling changes by providing for an orderly 
industry adjustment to new labeling requirements that occur between the 
designated dates.\34\ Per the uniform compliance date schedule, 
establishments will need to comply with the new regulatory requirements 
on January 1, 2026 (87 FR 77707, December 20, 2022). On that date, FSIS 
will consider as compliant only labels bearing the voluntary claims 
``Product of USA,'' ``Made in the USA,'' and other U.S.-origin claims 
for FSIS-regulated products that meet the codified requirements for the 
use of such claims. Establishments may choose to voluntarily change 
their labels to comply with the final rule before January 1, 2026. This 
compliance date will provide sufficient time to implement the voluntary 
labeling requirements for official establishments and facilities that 
choose to include U.S.-origin claims on labels of FSIS-regulated 
products.
---------------------------------------------------------------------------

    \34\ 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 (as amended by E.O. 14094) 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 final rule has been reviewed 
by the Office of Management and Budget under E.O. 12866 although it has 
not been designated a ``significant'' regulatory action by the Office 
of Information and Regulatory Affairs under section 3(f)(1) of E.O. 
12866.
    FSIS updated the estimated costs for the final rule from those 
published in the proposed rule from 2021 dollars to 2022 dollars. These 
changes include: updating the relabeling costs to businesses by 
updating the 2014 FDA Label Cost Model (FDA Label Cost Model) \35\ to 
2022 dollars; updating the recordkeeping costs using wage rates for 
operations managers to 2022 dollars; and updating market testing costs 
for inflation to 2022 dollars. In response to concerns from commenters 
on the impact to small businesses, FSIS updated the Regulatory 
Flexibility Act Assessment with an analysis comparing the final rule's 
estimated cost for small businesses using U.S.-origin claims to the 
average revenue for small businesses in the industry. The final rule is 
expected to result in quantified industry relabeling, recordkeeping, 
and market testing costs, which combined are estimated to be $3.2 
million, annualized at a 7 percent discount rate over 10 years. For 
comparison, the proposed rule had an estimated cost of $3 million, 
annualized at a 7 percent discount rate over 10 years.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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.\36\ For instance, 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.
---------------------------------------------------------------------------

    \36\ 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.
---------------------------------------------------------------------------

    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 FSIS 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 the RTI survey to gather information on the 
American consumers' understanding of the meaning of the ``Product of 
USA'' claim.
    In addition, most of the public comments to the proposed rule were 
in support of the proposed changes.

[[Page 19487]]

Specifically, over 3,000 consumers, and most domestic producers and 
organizations, supported the proposed rule, with many citing the need 
for accurate labeling to ensure that FSIS-regulated products labeled as 
``Product of USA'' or ``Made in the USA'' are derived from animals 
born, raised, slaughtered, and processed in the United States.
    Based on the information reviewed by FSIS, the Agency has concluded 
that the current ``Product of USA'' labeling policy guidance does not 
reflect consumers' common understanding of what ``Product of USA'' 
claims mean on FSIS-regulated products. Therefore, the Agency is 
finalizing 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.
Baseline for Evaluation of Costs and Benefits
    The final rule 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 used Label Insight \37\ 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.\38\
---------------------------------------------------------------------------

    \37\ 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.
    \38\ 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.
---------------------------------------------------------------------------

    This analysis identified two types of U.S.-origin claims: (1) 
Authorized claims, i.e., ``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.\39\ 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.
---------------------------------------------------------------------------

    \39\  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.\40\
---------------------------------------------------------------------------

    \40\ 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 Final Action
    The final rule is expected to result in quantified industry 
relabeling, recordkeeping, and market testing costs, which combined are 
estimated to cost $3.2 million, annualized at a 7 percent discount rate 
over 10 years. Details of these cost estimates are provided below.
Relabeling Costs
    Under this final rule, FSIS-regulated single ingredient and multi-
ingredient products that are not derived from animals born, raised, 
slaughtered, and processed in the United States will no longer be able 
to bear the authorized claims of ``Product of USA'' or ``Made in the 
USA.'' These products will have to be relabeled by either removing the 
authorized voluntary claim or by using a qualified claim that would 
describe the production or processing steps that occurred in the United 
States. For example, a FSIS-regulated 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 will 
no longer meet the requirements for using their existing labels, this 
analysis utilized the FDA Label Cost Model \41\ 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).
---------------------------------------------------------------------------

    \41\ 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 
will modify or remove the claim in response to this final rule as some 
labels already meet the final and current labeling criteria. However, 
it is difficult to estimate the number of claims that will change in 
response to

[[Page 19488]]

the final rule 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.

                              Table 2--Number of FSIS Labels That Will 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
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 the final rule. For the purpose of this analysis, FSIS 
anticipates the compliance period will be somewhere between 22 and 26 
months. Assuming a 24-month compliance period, 100 percent of branded 
products label updates will be coordinated with a planned label change 
by that date. However, for private (store brand) labels, only 26 
percent will have a coordinated label change, and 74 percent will be 
uncoordinated.\42\ 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.\43\ 
Therefore, an estimated 81.5 percent of the labels requiring an update 
as a result of the rule will have a coordinated change and 18.5 percent 
will have an uncoordinated change.\44\ Based on the FDA Label Cost 
Model, the label changes that will result from the rule are considered 
minor. 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.\45\
---------------------------------------------------------------------------

    \42\ 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.
    \43\ 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.
    \44\ 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.
    \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 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 Will 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 2022 producer price indices for the material and 
consultation costs and 2022 wage rates \46\ for the labor hours. The 
cost estimates in 2022 U.S. dollars are: $874 per label for a minor 
coordinated change (with a range of $203 \47\ to $1,802), and $5,043 
per label for a minor uncoordinated change (with a range of $2,222 to 
$8,968). Combined, the mean estimated relabeling cost is $1.3 million, 
annualized at a 7 percent discount rate over 10 years, table 4.
---------------------------------------------------------------------------

    \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. Table 4-7. Hourly Wage Rates for 
Activities Conducted in Changing Product Labels, 2014.
    \47\ Please note that in comparison to the proposed rule, this 
number decreased from $205 to $203 because the national wage rate 
for advertising and promotions managers at the 10th percentile level 
decreased from $29.45 in 2021 dollars to $29.03 in 2022 dollars. 
This wage is an input in the FDA Label Cost Model. Estimates 
obtained from the Bureau of Labor Statistics, May 2022, National 
Industry-Specific Occupational Employment and Wage Estimates, for 
advertising and promotions managers (10th percentile)(Occupational 
Code 11-2011). Advertising and promotion managers (bls.gov)

                Table 4--Labeling Costs With a 24-Month Compliance Period in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                                         Type                 Lower         Mean        Upper
----------------------------------------------------------------------------------------------------------------
Coordinated...............................  Minor........................         $0.4         $4.1        $13.9
                                                                          --------------------------------------
Uncoordinated.............................  Minor........................          1.1          5.4         15.7
                                                                          --------------------------------------
    Total Cost.\1\........................  .............................          1.5          9.4         29.6
Annualized Cost (3% DR, 10 Year)..........  .............................          0.2          1.1          3.4
Annualized Cost (7% DR, 10 Year)..........  .............................          0.2          1.3          3.9
----------------------------------------------------------------------------------------------------------------
\1\ Totals may not sum due to rounding.


[[Page 19489]]

Recordkeeping Costs
    Currently, businesses using labels to designate the U.S.-origin of 
an FSIS-regulated product, or a component of a product's processing and 
preparation, must maintain records to support the U.S.-origin 
claim.\48\ 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.\49\ FSIS estimated that the provisions in this final rule will 
require businesses to spend an additional 20 minutes (for a combined 
total of 35 minutes) to gather their records, 20 times per year, per 
respondent. FSIS acknowledges that it will 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 can elect to either remove the 
U.S.-origin claim from the label or make an alternative claim. 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 will have additional recordkeeping 
costs under the final rule. This analysis assumed this recordkeeping 
will be completed by an operations manager with an hourly estimated 
cost of $103.24 at the median and a range of wages from ($72.46 to 
$157.42).\50\ As such, the estimated annual cost per business is 
approximately $688. The estimated annual cost to all 1,575 businesses 
is approximately $1.1 million, table 5.
---------------------------------------------------------------------------

    \48\ Businesses with complicated supply lines are not expected 
to use an authorized claim.
    \49\ Generic proposed rule: 85 FR 56544, September 14, 2020.
    \50\ The hourly cost includes a wage rate of $51.62 and a 
benefits and overhead factor of 2. Estimates obtained from the 
Bureau of Labor Statistics May 2022, 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         $1.1         $1.7
Annualized Cost (3% DR, 10 Year).........  ..............             0.8          1.1          1.7
Annualized Cost (7% DR, 10 Year).........  ..............             0.8          1.1          1.7
----------------------------------------------------------------------------------------------------------------

Market Testing
    To assess the marketability of potential label changes, the FDA 
Label Cost Model includes information on five types of market tests: 
\51\ focus group, discrimination test, central location test, 
descriptive test, and in-home test. The mean cost for these market 
tests ranges from $7,788 to $39,497 per formula.\52\ The FDA Label Cost 
Model reports that minor label changes are unlikely to incur any market 
testing costs.\53\ However, some businesses may still want to conduct 
market testing to assess how consumers will respond to a label change. 
FSIS estimates that 25 to 75 percent of businesses that have products 
with U.S.-origin claims will conduct a focus group test on one product 
formula. FSIS assumed that not every brand will conduct market testing 
because not every brand will 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 $8,035 per formula (with a 
range of $7,613 to $8,458) in 2022 dollars.\54\ Combined, the mean 
estimated market testing cost is $0.8 million, annualized at a 7 
percent discount rate over 10 years, table 6.
---------------------------------------------------------------------------

    \51\ Mean estimates from the 2014 FDA Label Cost Model were 
updated to 2022 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)
    \52\ 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.
    \53\ 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.
    \54\ 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\...........................................................         $3.0         $6.3        $10.0
Annualized Cost (3% DR, 10 Year).........................................          0.3          0.7          1.1
Annualized Cost (7% DR, 10 Year).........................................          0.4          0.8          1.3
----------------------------------------------------------------------------------------------------------------

Cost Summary
    Under the provisions in this final rule, industry will likely incur 
a one-time relabeling cost, market testing cost, and annual 
recordkeeping costs. Combined and annualized assuming a 7 percent 
discount rate over 10 years, total industry cost is $3.2 million, table 
7.

[[Page 19490]]



                                   Table 7--Total Costs in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                Cost type                                     Lower         Mean        Upper
----------------------------------------------------------------------------------------------------------------
Relabeling...............................................................         $1.5         $9.4        $29.6
Recordkeeping............................................................          0.8          1.1          1.7
Market Testing...........................................................          3.0          6.3         10.0
Annualized Cost (3% DR, 10 Year).........................................          1.3          2.9          6.2
Annualized Cost (7% DR, 10 Year).........................................          1.4          3.2          6.9
----------------------------------------------------------------------------------------------------------------

Expected Benefit of the Final 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 suggest that 
the current ``Product of USA'' label claim is misleading to a majority 
of consumers. This final rule will adopt a requirement for the 
``Product of USA'' claim that will 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
------------------------------------------------------------------------
Note: Totals 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' MWTP 
for different U.S.-origin claims using two 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 MWTP 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 
MWTP for products that were born, raised, slaughtered, and processed in 
the United States, table 9. Specifically, results show a MWTP 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 19491]]



                           Table 9--MWTP 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 MWTP 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 \55\ 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 \56\ 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 will 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.
---------------------------------------------------------------------------

    \55\ 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.
    \56\ 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 consumers have a different understanding of what a 
``Product of USA'' claim means when they purchase FSIS-regulated 
products, compared to the current definition. Consumers expect these 
labels to convey accurate information about the U.S. origin of the 
production and preparation of the labeled product based on their 
understanding of the claim. 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 final ``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 final changes to the ``Product of 
USA'' voluntary labeling policy are necessary to reduce false or 
misleading U.S.-origin labeling (See 9 CFR 317.8(a), 381.129(b), and 
590.411(f)(1)).\57\ This will reduce the market failures associated 
with incorrect and imperfect information. The final changes will 
benefit consumers by matching the voluntary authorized ``Product of 
USA'' and ``Made in the USA'' label claims with the definition that 
consumers likely expected, e.g., as product being derived from animals 
born, raised, slaughtered, and processed in the United States.
---------------------------------------------------------------------------

    \57\ 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 final rule have not been quantified due to 
data limitations, and the limitations (some of which are discussed in 
appendix A) associated with the surveys, LTE experiments, DCEs, and 
hedonic price modeling. However, the final rule will allow consumers to 
make informed purchasing decisions, resulting in an increase in 
consumer benefit and preventing market distortions.
Alternative Regulatory Approaches
    We considered the following three alternatives in the analysis for 
this final rule:
     Alternative 1: Taking no regulatory action by continuing 
with the existing labeling requirements.
     Alternative 2: The final rule.
     Alternative 3: The final rule, extended compliance period.

                               Table 10--Comparison of the Considered Alternatives
----------------------------------------------------------------------------------------------------------------
                Alternative                               Benefits                            Cost
----------------------------------------------------------------------------------------------------------------
1--No Action...............................  No benefit. Misinformation         No relabeling costs or increase
                                              remains.                           in recordkeeping costs.

[[Page 19492]]

 
2--The Final Rule..........................  More accurate information          $3.2 million total costs.
                                              conveyed more quickly on labels    Relabeling cost $1.3 million.
                                              with U.S.-origin claims.           Recordkeeping cost $1.1
                                                                                 million. Market testing cost
                                                                                 $0.8 million.
3--Extended Compliance Period..............  Reduced benefits because labels    $2.6 million total costs.
                                              with U.S.-origin claims will       Relabeling cost $0.7 million.
                                              change at a slower rate and        Recordkeeping cost $1.1
                                              potentially include information    million. Market testing cost
                                              that may mislead consumers for     $0.8 million.
                                              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 would be worse off absent the final action. While 
``no action'' means the manufacturers currently labeling their products 
with U.S.-origin claims do not have to relabel or increase 
recordkeeping 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 Final Rule
    Under this final 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 of the preparation and processing steps that occurred in 
the United States upon which the claim is made (as described above). 
Consumers would benefit from the final 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 Final 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 $0.6 
million, as compared to assuming a 24-month compliance period. 
Recordkeeping and market testing costs would remain the same as 
alternative 2. The resulting costs would total $2.6 million with 
relabeling costs of $0.7 million, recordkeeping costs of $1.1 million, 
and market testing cost of $0.8 million.
    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 final 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.
    After the 42-month compliance period, consumers would benefit from 
the final changes to the regulations to address the false impression 
and asymmetric information associated with current U.S.-origin claims. 
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            $5.0           $17.1
Recordkeeping, Recurring........................................             0.8             1.1             1.7
Market Testing, One-time........................................             3.0             6.3            10.0
Annualized Cost (3% DR, 10 Year)................................             1.1             2.4             4.7
Annualized Cost (7% DR, 10 Year)................................             1.2             2.6             5.2
----------------------------------------------------------------------------------------------------------------

V. Regulatory Flexibility Act Assessment

    The FSIS Administrator certifies that, for the purposes of the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.), this final rule will 
not have a significant economic impact on a substantial number of small 
entities in the U.S. Establishments subject to this final rule are 
classified under the North American Industry Classification System 
(NAICS) codes 311611-Animal (except Poultry) Slaughter, 311612-Meat 
Processed from Carcasses, 311615-Poultry Processing, and 311710-Seafood 
Product Preparation and Packaging.\58\ However, not every business 
under these codes make U.S.-origin claims. To more accurately identify 
the businesses impacted by this final rule, this analysis used Label 
Insight Data. 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. While Label Insight does not provide 
information on establishment size or employee counts, FSIS was able to 
use UPCs and associated brands to estimate the

[[Page 19493]]

number of small businesses impacted by the rule. Based on a review of 
Label Insight data, large brands consistently had over 50 UPCs, while 
smaller brands consistently had 50 or fewer UPCs. Consequently, FSIS 
assumed a brand with 50 or fewer UPCs was a small business for the 
purpose of this analysis.
---------------------------------------------------------------------------

    \58\ The Small Business Administration 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. The 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 small business standard.
    Small Business Administration (SBA), Table of Small Business 
Standards, effective March 17, 2023, https://www.sba.gov/document/support-table-size-standards.
---------------------------------------------------------------------------

    FSIS estimated that the final rule will impact 1,349 small 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 estimated that between 1,000 and 3,000 labels from small 
business may need changes for the final rule assuming 25, 50, and 75 
percent of labels will need to be changed. The average one-time cost 
estimate for minor label changes is between $874 and $5,043 per label. 
The expected one-time relabeling cost for 81.5 percent of labels are 
for minor coordinated changes and are approximately $874 per label. The 
expected one-time relabeling cost for 18.5 percent of labels are for 
minor uncoordinated changes, at approximately $5,043 per label.\59\
---------------------------------------------------------------------------

    \59\ Mean estimates from the 2014 FDA Label Cost Model were 
updated to 2022 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.
---------------------------------------------------------------------------

    In addition, businesses will have increased recordkeeping costs. 
This analysis assumed this recordkeeping will be completed by an 
operations manager with an estimated hourly cost of $103.24 at the 
median and a range of wages from $72.46 to $157.427 for 20 minutes, 20 
times per year, as described in the Recordkeeping Costs 
section.60 61
---------------------------------------------------------------------------

    \60\ The time estimates for recordkeeping per business of 20 
minutes, 20 times per year is in addition to the current time 
estimates for record keeping for U.S.-origin claims, under the 
generic label approval system. Under the generic label 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. Consequently, in total, the estimated 
time for record keeping for businesses that make products with a 
U.S.-origin claim would amount to 35 minutes, 20 times per year.
    \61\ The hourly cost includes a wage rate of $51.62 and a 
benefits and overhead factor of 2. U.S. Bureau of Labor Statistics 
(BLS) published May 2022, Occupational Employment and Wage 
Estimates, 11-0000 Management Occupations, 50th (25th-75th 
percentile).
---------------------------------------------------------------------------

    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, assuming 25, 50, and 75 percent of the 
1,349 small businesses conduct market testing. The expected mid-point 
one-time market testing cost for those small businesses that choose to 
conduct market testing is $8,035 in 2022 dollars.
    The total mid-point cost estimate is $2 million, which is roughly 
$1,483 per small business ($2 million/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. FSIS does not 
have access to proprietary data reflecting the sales volume, including 
for small businesses voluntarily using U.S.-origin claims, to calculate 
business profit margins or revenue. However, using data from the U.S. 
Census Bureau Statistics of U.S. Businesses, FSIS identified small 
businesses by NAICS codes, which includes the industries affected by 
the final rule.\62\ These small businesses have an average range of 
revenue of approximately $13 million to $28 million in 2022 dollars 
based on 2017 receipts adjusted for inflation.\63\ The final rule's 
estimated cost per small business of $1,483 represents 0.005 percent to 
0.01 percent of a small business' average revenue.
---------------------------------------------------------------------------

    \62\ Census tabulated data by geography, industry, and 
enterprise employment or receipts size for most U.S. business 
establishments by 6-digit NAICS. U.S. Census Bureau, 2017 SUSB 
Annual Datasets by Establishment Industry, March 2020, https://www.census.gov/data/datasets/2017/econ/susb/2017-susb.html.
    \63\ Estimated small business revenue range based on NAICS 
codes: 311611-Animal (except Poultry) Slaughter (average revenue of 
$13 million), 311612-Meat Processed from Carcasses (average revenue 
of $20 million), 311615--Poultry Processing (average revenue of $28 
million), and 311710--Seafood Product Preparation and Packaging 
(average revenue of $22 million). U.S. Census Bureau, 2017 SUSB 
Annual Datasets by Establishment Industry, March 2020, https://www.census.gov/data/datasets/2017/econ/susb/2017-susb.html. Updated 
for inflation using BLS Consumer Price Index (CPI), All items in 
U.S. city average, all urban consumers, not seasonally adjusted 
(CUUR0000SA0 Not Seasonally Adjusted).

                                      Table 12--Total Small Business Costs
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                            Cost type                                  Lower           Mean            Upper
----------------------------------------------------------------------------------------------------------------
Relabeling, One-time............................................            $0.6            $3.3            $9.4
Recordkeeping, Recurring........................................             0.7             0.9             1.4
Market Testing, One-time........................................             2.6             5.4             8.6
Annualized Cost (3% DR, 10 Year)................................             1.1             1.9             3.5
Annualized Cost (7% DR, 10 Year)................................             1.1             2.0             3.7
----------------------------------------------------------------------------------------------------------------

VI. Paperwork Reduction Act

    In accordance with section 3507(d) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the information collection and 
recordkeeping requirements included in this final rule have been 
submitted by the Agency to the Office of Management and Budget (OMB) 
for approval. FSIS will collect no information associated with this 
rule until the information collection is approved by OMB.

VII. 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.

VIII. Executive Order 12988, Civil Justice Reform

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

IX. Executive Order 13175

    This 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

[[Page 19494]]

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 rule on Indian tribes and 
determined that this 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.

X. 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.

XI. 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 final rule, which will 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(6) of the U.S. Department of Agriculture 
regulations.

XII. 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.

List of Subjects

9 CFR Part 317

    Food labeling, Food packaging, Meat inspection, Nutrition, 
Reporting and recordkeeping requirements.

9 CFR Part 381

    Poultry inspection, Poultry and poultry products, Reporting and 
recordkeeping requirements.

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 amending 9 CFR 
chapter III as follows:

PART 317--LABELING, MARKING DEVICES, AND CONTAINERS

0
1. The authority citation for part 317 continues to read as follows:

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


0
2. Amend Sec.  317.8 by revising paragraph (b)(1) to read as follows:


Sec.  317.8   False or misleading labeling or practices generally; 
specific prohibitions and requirements for labels and containers.

* * * * *
    (b) * * *
    (1) Establishments may only use statements, words, pictures, 
designs, or devices on the label having geographical significance with 
reference to a locality other than where the animal from which the 
product was derived was born, raised, slaughtered, and processed if the 
statements, words, pictures, designs, or devices are qualified by the 
word ``style,'' ``type,'' or ``brand,'' as the case may be, in the same 
size and style of lettering as in the geographical statement, word, 
picture, design, or device, and accompanied with a prominent qualifying 
statement identifying the country, State, Territory, or locality, using 
terms appropriate to effect the qualification. When the word ``style'' 
or ``type'' is used, there must be a recognized style or type of 
product

[[Page 19495]]

identified with and peculiar to the area represented by the 
geographical statement, word, picture, design, or device and the 
product must possess the characteristics of such style or type, and the 
word ``brand'' shall not be used in such a way as to be false or 
misleading: Provided, That a geographical statement, word, picture, 
design, or device which has come into general usage as a trade name and 
which has been approved by the Administrator as being a generic 
statement, word, picture, design, or device may be used without the 
qualifications provided for in this paragraph. The terms 
``frankfurter,'' ``vienna,'' ``bologna,'' ``lebanon bologna,'' 
``braunschweiger,'' ``thuringer,'' ``genoa,'' ``leona,'' ``berliner,'' 
``holstein,'' ``goteborg,'' ``milan,'' ``polish,'' ``italian,'' and 
their modifications, as applied to sausages, the terms ``brunswick'' 
and ``irish'' as applied to stews and the term ``boston'' as applied to 
pork shoulder butts need not be accompanied with the word ``style,'' 
``type,'' or ``brand,'' or a statement identifying the locality in 
which the product is prepared.
* * * * *

PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS

0
3. The authority citation for part 381 continues to read as follows:

    Authority: 7 U.S.C. 1633, 1901-1906; 21 U.S.C. 451-472; 7 CFR 
2.7, 2.18, 2.53.


0
4. Amend Sec.  381.129 by revising paragraph (b)(2) to read as follows:


Sec.  381.129   False or misleading labeling or containers.

* * * * *
    (b) * * *
    (2) Statements, words, pictures, designs, or devices having 
geographical significance with reference to a particular locality must 
be made in accordance with Sec.  317.8(b)(1) of this chapter.
* * * * *

PART 412--LABEL APPROVAL

0
5. 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
6. Section 412.3 is added to read as follows:


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

    (a) The 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)(1) The claims ``Product of USA'' and ``Made in the USA'' may be 
used under generic approval on labels to designate multi-ingredient 
products if:
    (i) All ingredients that are produced under FSIS mandatory 
inspection or voluntary inspection services in the product are derived 
from animals born, raised, slaughtered, and processed in the United 
States;
    (ii) All other ingredients in the product are of domestic origin; 
and
    (iii) The preparation and processing steps for the multi-ingredient 
product have occurred in the United States.
    (2) 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' 
preparation and processing only if the claim includes a description of 
the 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.
    (d) Claims may be used under generic approval on labels to 
designate the U.S. State, Territory, or locality-origin of single 
ingredient and multi-ingredient products or components of a product's 
preparation and processing, only if the claim meets the requirements 
for use of U.S.-origin claims under paragraphs (a) through (c) of this 
section with regards to the U.S. State, territory, or locality origin.
    (e) Display of the U.S. flag, or a U.S. State or territory flag, 
may be used under generic approval on labels to designate the United 
States, U.S. State, or U.S. territory origin of single and multi-
ingredient products or components of a product's preparation and 
processing, only if the display of the flag meets the requirements for 
use of U.S.-origin claims under paragraphs (a) through (d) of this 
section. For the purposes of the display of a flag that meets the 
requirements for use of U.S.-origin claims other than ``Product of 
USA'' and ``Made in the USA'' under paragraph (c) or (d) of this 
section, the display must be accompanied by a description of the 
preparation and processing steps that occurred in the United States, or 
in the U.S. State or territory, upon which the claim is being made.
    (f) In addition to the requirements in Sec.  412.2, official 
establishments using and facilities choosing to use labels that bear 
the 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 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 eggs, 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, as 
necessary, segregate, from the time of birth through packaging and 
wholesale or retail distribution, source animals and eggs, all 
additional ingredients other than spices and flavorings, and resulting 
products that comply with paragraphs (a) and (b) of this section.
    (3) A signed and dated document describing how the product is 
prepared and processed to support that the claim is not false or 
misleading.
    (g) In addition to the requirements in Sec.  412.2, official 
establishments using and facilities choosing to use a U.S.-origin label 
claim other than ``Product of USA'' or ``Made in the USA'' to designate 
the U.S.-origin preparation and processing steps 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 and eggs, all 
additional ingredients other than spices and flavorings, and resulting 
products to demonstrate that the qualified U.S.-origin claim complies 
with paragraph (c) or (d) of this section. The described controls may 
include those used to trace and, as necessary, segregate, during each 
applicable step, source animals and eggs, 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.

[[Page 19496]]

    (2) A signed and dated document describing how the qualified U.S.-
origin claim regarding the preparation and processing steps is not 
false or misleading.

    Done in Washington, DC.
Theresa Nintemann,
Deputy Administrator.
[FR Doc. 2024-05479 Filed 3-15-24; 8:45 am]
BILLING CODE 3410-DM-P