A trade war may be brewing between the Canadian and U.S. governments over meat packaging regulations, and it could have an impact on your wallet.

The Manitoba government issued a press release on Friday saying it supports the possible use of retaliatory measures by the federal government in response to new regulations around country of origin labelling (COOL) published by the U.S. Department of Agriculture on Thursday.

The USDA announced more regulations for the mandatory labelling system that was put in place in 2008.

It tracks beef and hogs from the farm to the store by forcing producers and processors to account where all meat comes from.

“It's costly to producers on this side of the border,” said cattle producer John Troyan.

Industry advocates said processors in the U.S. don't want to pay for these additional requirements, so that has cut down on the amount of Canadian beef and hogs being exported to the United States.

"U.S. processors say, ‘We can't afford to take Canadian cattle,'" said Cam Dahl of Manitoba Beef Producers.

The Manitoba Beef Producers claims thousands of their members have gone out of business in part because of the U.S. measure. They say fewer producers means less selection on the meat counter at the store and higher prices for consumers.

Slaughter hog exports dropped 77 per cent, feeder pig exports dropped 28 per cent, and slaughter cattle dropped 74 per cent in 2012, compared to 2007 pre-COOL numbers, the province said.

The United States Department of Agriculture had until Friday to comply with World Trade Organization rules around COOL, which the WTO ruled last June discriminates against exports of Canadian livestock.

Agriculture, Food and Rural Initiatives Minister Ron Kostyshyn said the changes fail to bring COOL in line with WTO rules and will worsen barriers facing Canadian livestock.

U.S. officials said the program helps consumers make informed choices about their food. Ottawa said the forced labelling violates the WTO ruling and it is contemplating retaliatory measures.

"I'm disappointed that we have this reoccurring argument which in my opinion runs counter to, if not the letter, the spirit of the free trade agreement," said Public Safety Minister Vic Toews.

Toews wouldn’t comment on what kind of retaliatory measures the government might take. Industry officials say they would likely take the form of tariffs on products shipped to Canada.

Beef producers claim the country of origin labelling costs the Canadian economy more than $600 million and they fear that number could double with the added measures.

- With a report by Jeff Keele