Audio Transcript:

The beef you buy at grocery stores must now be labeled with the country where it's from. Proponents of the new rule argue it gives Americans more information about the beef they're buying. But some say the labels are hurting business.

er Goule at the National Farmers Union in Washington.

CHANDLER GOULE: When you go to other countries, Canada has country of origin labeling laws on other products. When you go to Japan, you can literally take the beef up to a barcode scanner and it shows you the picture of the producer himself and where he lived. So this isn't a new idea or anything along those lines.

MARGOLIS: Goule, and many others, argue that American consumers have a right to know as much as possible about what they're eating.

GOULE: Especially with a lot of the food safety concerns that we have with the food that's imported. Everyday you see more and more reports out about where your food is coming from, or what's happened in this country and I think it gives our consumers an assurance when they pick this product up and they know it was made, slaughtered, and processed, here in the United States.

MARGOLIS: But the US Department of Agriculture says country of origin labeling is not about food safety. And Chandler Goule concedes that labeling hasn't made US beef any safer. So what exactly does country of origin labeling offer the beef consumer? Not much, says ag economist Ted Schroeder at Kansas State University.

TED SCHROEDER: It's purely a label change because the product itself, the eating experience, the desirability, the freshness, everything else about the product has remained unchanged here.

MARGOLIS: And since beef is effectively unchanged, Schroeder says it's hard for American ranchers who import cattle to charge higher prices to offset their higher costs. Rancher Bill Haw says he had no choice. Last year, he had to stop importing Mexican cattle. He argues that country of origin labeling is setting back his industry and the flow of trade between Canada, the United States and Mexico.

HAW: The sole motivation to have country of origin labeling is demand for a protectionist tariff by small beef producers, who fear the competition of the other cattle coming in.

MARGOLIS: When Haw found the Nebraska slaughterhouse that would take his Mexican-born cattle, he began importing again, but less than in years past. He'd like to import more and Canada and Mexico would like American cattle ranchers to do that. Those countries are suing the United States at the World Trade Organization. They argue that the new American labeling rule amounts to a trade barrier, discriminating against their beef and livestock. If Mexico and Canada win their suit, it could change the rules yet again for the way your beef is labeled. For The World, I'm Jason Margolis, Kansas City, Kansas.