The obstacles and opportunities to animal identification (ID) and traceability systems are many. The findings of a study on the subject were discussed on April 4 during a webinar. A key takeaway was that implementing these animal IDs can be thought of as insurance in the case of animal disease, as well as an opportunity to add value.
The session was led by David Gregg, senior analyst at World Perspectives, Inc. (WPI), to review the study that was released during the National Cattlemen’s Beef Association (NCBA) annual convention in January. WPI was commissioned to conduct the “comprehensive feasibility study: U.S. Beef Cattle Identification and Traceability Systems” in response to core initiatives identified in NCBA’s 2016-2020 Beef Industry Long-Range Plan.
Gregg explained that some reasons to adopt animal ID and traceability is to better manage potential animal disease outbreaks and to enhance domestic and global trust, both of which impact economics of the cattle business.
In conducting the study, which involved a survey and interviews with cattle producers in all sectors, Gregg said the goal was to avoid assumptions and address some of the misperceptions about animal ID and traceability.
“We hope with the study the industry can take a look and see where we are right now with animal ID and traceability and where could we go from here,” Gregg said. He said his team was careful in developing questions in order to correctly frame the discussion. “It is important to understand that animal ID and traceability is a complicated issue to the point that we wanted to start from definitions. What does traceability mean? Then building on that, what are other shared definitions that will help us create common ground to enable productive discussion?”
The full report contains longer explanations, but Gregg offered these simple definitions:
• Traceability—an information trail that documents a product’s physical trail.
• National significance—is related to the number of cattle represented in system(s).
• Mandatory vs. voluntary—the key issue is compliance and who or what entities stipulate compliance.
In terms of actually identifying animals, there are three main areas:
• Premise ID;
• Individual animal ID; or
• Group or lot ID.
Economically, traceability and animal ID can be important for foreign as well as domestic markets. Gregg noted that nine foreign countries have some level of nationally significant animal ID programs. He said that ranges from Ireland with 6.6 million head of cattle to Brazil with more than 280 million cattle. These countries use a mix of identifying methods and have varying levels of participation.
He said that approximately 61 percent of beef comes from countries with ID systems already in place. He went on to say that the largest percentage of nontraceable beef is from the U.S.
“What’s the point?” he asked, continuing, “The point is foreign countries have done this and it’s becoming a global norm. We look at the global beef industry. Traceability and animal ID is becoming the norm across the world.”
Animal ID and traceability is an evolving issue, Gregg said. He explained that even among people who initially appeared skeptical during the interviews, there was a recognition that the issue needs to be addressed in some fashion and industry should take the lead role.
The survey found that of those interviewed, about 22 percent are participating in some form of animal ID program. Gregg pointed out that it appears there is greater participation by producers with larger herd sizes.
Questioned why they participated in a voluntary system, just over 30 percent said it was to add value or a premium return on marketed cattle. In another question, 20 percent said they view ID systems as a way to mitigate or respond to animal disease outbreaks.
Respondents in the survey were asked their support or willingness to participate in a larger nationally-significant system. The largest response on a 1-5 scale fell in the middle, which Gregg said is an opportunity for education and further the discussions.
“It was interesting to see that there certainly is a core group of folks out there who see this as something that they are ‘on the fence’ about—neither against or for—but ‘let’s talk.’ That tone flowed throughout our findings,” Gregg said.
But who controls the data is also a consideration. The majority of respondents said they would support the information being made available to the government only in the event of an animal disease outbreak.
That leads to the cost-benefit discussion. Gregg said looking at previous studies, investor support and profits, their study found that for 100 percent implementation for a ranch-of-origin traceability system the cost would be $386 million. That amount, he said, would be largely born by the cow-calf sector.
Talking about such a large amount, Gregg said looking at it in terms of direct cost is an inaccurate way to view it. He noted that some things are over-emphasized and explained that foreign market access is one opportunity, but it can’t be said with certainty that exports are the No. 1 reason for animal ID and traceability. He explained that this study points to opportunity costs as the key way to understand animal ID and traceability in terms of a cost-benefit analysis.
“The opportunity cost inherent in not adopting an expanded U.S. approach outweigh any general cost projections of direct costs that would be inherent in adopting a new system. So that $386 million figure—the opportunity cost of not adopting a system—outweigh the general cost projection for an expanded system,” Gregg said.
Obstacles to adoption of animal ID and traceability vary among each sector—cow-calf, feeder, packer— but common to each is the need for cooperation among them.
Technology is also part of the discussion, but Gregg said this should not be a limiting factor. There are a number of animal ID options available.
Gregg spent some time discussing the bovine spongiform encephalopathy outbreak in 2003 that halted U.S. beef exports. He noted that in discussions with representatives of foreign countries they emphasized that an ID or traceability system could help mitigate the impact of an animal disease outbreak.
In negotiating global beef trade, Gregg said, “All of the key competitors in the global beef industry to the U.S. have animal ID and traceability systems in their negotiating tool kit. In negotiating they can pull that out of their tool kit—the U.S. cannot. We are at a competitive disadvantage at the overseas negotiating table.”
And, beyond foreign markets, Gregg said, “We cannot forget the domestic market opportunities as consumer dynamics evolve. The farm-to-fork mentality is real. And that is moving quickly and identification and animal ID fits in that area.”
Widespread producer participation will likely take more time. Although WPI did not recommend any single approach, Gregg said the continued distribution of information from this report will help drive discussion. “Hopefully some momentum builds to the point where an industry leader—be that a single organization, or a coalition of organizations organized into a collaborative board — establishes a firm resolution to move forward on an industry-led, nationally significant approach to animal identification and traceability.” — Rae Price, WLJ editor
