Justin Sexten: The How And What Of Traceability
Spring-calf weaning in full swing and yearlings coming off grass translate to cattle movements. It is a timely opportunity to address traceability. Before reading on, I challenge you write down your definition of traceability in the context of the beef industry.
Our view or definition of traceability and the process involved shapes our perspective of the premium and implementation cost. Back to our exercise, if we use the Wikipedia definition, traceability is the ability to trace or verify the history or location of an item by documented records.
Going through the exercise myself I quickly began thinking about the infrastructure to implement traceability: electronic tags, cattle handling, affidavits, regulations, readers and fees. We should first consider what traceability seeks to accomplish before jumping to what is required to achieve the goal.
Let’s consider the goal in the most simplistic form. Traceability can be achieved without technology, government and few if any records: Simply direct sell the cattle you feed at home to the consumer. This freezer beef model is implemented across the country today and in most cases the beef trades at a reasonable premium.
Of course, there are more traditional sources of traceable product in the market today. We just don’t think about this beef in the context of traceability. Process verified products such as organic, naturally raised or non-hormone treated cattle are accompanied with a certain level of traceability to verify the product claims.
This raises the question, are consumers paying premiums for product claims, traceability or both? I submit the consumer is more interested in the methods used to manage cattle rather than knowing the geography the calf traveled to get to the retail store or restaurant. Or another way to think about it is the how and what are more important than the who and where.
The CattleTrace pilot project is an example where the who and where are the primary focus. This project demonstrates what private infrastructure is needed to achieve traceability for animal disease control using four pieces of data: electronic ID, GPS location, date and time.
A recent paper presented by James Mitchell and his K-State co-workers at the Agriculture and Applied Economics Annual meeting suggests privately run traceability programs, like CattleTrace, are the clear preference of cow-calf and feedlot producers compared to government managed programs..
The K-State group also reported several key producer attitudes toward traceability. Traceability was defined as above, source verification only. Interestingly they reported no premiums for traceability in fed cattle, further supporting my suggestion that consumers are interested in the how and what rather than who and where.
Not surprisingly with no economic incentive in finished cattle related to traceability, Mitchell reported cost reduction of traceability implementing as the key driver to increased participation by feeders and cow-calf operations.
They expanded on this finding to make comments on future policy, suggesting cost-share or cost reduction programs as the more effective path to increasing participation. If visual traceability is the standard, then policies that incentivize electronic systems would be more effective than discounts on non-traceable cattle.
In the K-State paper they reported cow-calf producers and feeders have a preference toward traceability, seemingly counterintuitive, since we supposedly don’t have traceability in the beef supply chain. But the data suggest the discount to move away from traceability ranged from $2.53 to $118.52 per head with cow calf producers citing a $11.30 per head discount before they would share health records and a $12.65 per head premium need to participate in a program tracking cattle origin.
What’s unique about the current beef supply chain’s traceability model is we focus on sharing records documenting practices at the point of sale. Unfortunately our communication often doesn’t extend beyond this transaction. As a seller you give your name and all the management information you have to drive value but after they leave the scales there is little chance the feedyard processing crew has any knowledge of this information to modify their management. This is likely why feedyard operators cited no preference for traceability information in the K-State paper.
Traceability to track cattle movement for disease control is indeed a cost, much like insurance, one you hope to never need. While the definition of traceability is limited to who and where, for many operations you built a management system around the how and what. Look for emerging technologies and programs to simplify this system while enhancing management at your operation as well as the next by digitally sharing documented records to capture value.