Traceability of beef has been a point of discussion in the cattle industry for many years. A report looking at the issue was released on Jan. 30 during the 2018 National Cattlemen’s Beef Association (NCBA) Annual Convention in Phoenix, AZ.
The “Comprehensive feasibility study: U.S. beef cattle identification and traceability systems,” was commissioned by NCBA in response to one of the core strategic initiatives identified in the 2016-2020 Beef Industry Long Range Plan (LRP). That initiative is:
“Adopt Animal I.D. Traceability Systems — Secure the broad adoption of individual animal ID traceability system(s) across the beef community to equip the industry to effectively manage a disease outbreak while enhancing both domestic and global trust in U.S. beef and ensuring greater access to export markets. Critical and immediate: Conduct a feasibility study to understand the economic opportunity of opening new and expanding markets…and the lost opportunity in the event of an animal disease outbreak.”
The report was developed by World Perspectives, Inc. (WPI), a U.S.-based agricultural market analysis and consulting firm. The 87-page document provides an evaluation of opportunities, obstacles and incentives across the U.S. beef industry value chain.
Results of the study were based on the following methodologies:
• 600-plus-respondent quantitative survey;
• 90-plus interviews with industry participants (all sectors);
• 23 discussions with state cattle and beef associations;
• 20 previous academic/government studies reviewed/analyzed;
• 15 years of data analyzed for demand modeling and economic projections; and
• Nine global systems reviewed via direct interviews with foreign industry association and government officials.
The study acknowledged that a number of traceability systems already exist and are being used on a voluntary basis. It looked at mandatory versus voluntary systems and provided these definitions of each:
• Mandatory systems can be administered by multiple stakeholders and have specific requirements, but compliance is stipulated via government legislation/regulation.
• Voluntary systems can be administered by multiple stakeholders and have specific requirements, but compliance is not stipulated via government legislation/regulation.
Key to the definitions, the study said is the difference between the compliance and participation. Under mandatory systems government legislation/regulation dictates that industry stakeholders must comply with requirements. Contrastingly, under voluntary systems the industry stakeholders can elect to participate.
Producers can use animal identification and traceability systems, in some cases, to gain a premium price for cattle, and to gain access to foreign markets. But the study also pointed out that the ability of traceability systems to reduce disease impact, including animal depopulations, should be an important motivator.
The study referenced the December 2003 BSE case in the U.S., noting that it took until 2010 before beef exports’ contribution to overall fed cattle prices was restored to normal levels. Researchers wrote that robust animal identification and traceability systems likely would not have completely prevented the closure of international markets that led to the reduction in export values. However, they could have mitigated the impact by speeding the recovery time for export market reopening. If all the closed markets were recovered in half the time, total losses and opportunity costs would have been $6.3 billion, or in other words, total fed cattle value potentially would have been a cumulative $4.4 billion greater over the years 2007, 2008 and 2009, researchers said.
The study concluded that moving forward, the basic tenets of beef cattle ID and traceability system(s) should be that a system(s):
• Is industry driven.
• Is managed and overseen by an entity that includes both private and government interests.
• Maintains data privacy.
• Is equitable to all industry sectors.
• Is compatible with common industry practices.
• Operates at the speed of commerce.
• Is credible in domestic and international markets.
The cost of implementing identification/traceability programs was also discussed and identified the primary concern of most industry stakeholders. Researchers pointed out that the report “did not presume to develop, emphasize nor prescribe a single traceability system. Thus, without the details of a specific system, no analysis of direct cost can be produced.”
WPI’s interviews and literature review found evidence of added value from domestic programs as well as evidence of an enhanced “willingness to pay” for ID’d and traceable beef in export markets. Further, U.S. beef exports must compete with beef originating from countries with animal identification and traceability systems. WPI’s analysis concluded that relatively modest gains in domestic and/or export demand for beef can offset the costs for adoption of a nationally significant traceability system(s) amortized over a period as short as 10 years. — Rae Price, WLJ editor
