...for ID Systems
You've heard why; here's how it might work.
By Sharla Ishmael

You want to raise the best beef possible and get paid for it. Your consumer wants source verification to address lingering, post-BSE food safety anxiety. Your competition in the export market is already two steps ahead in developing it.

"It" is an individual animal identification system. Electronic ID has been in the press for 20 or 30 years, but EID is only part of a much larger picture ­ a system. It could be a closed-loop system that only operates within the boundaries of your ranch or stocker operation to track cattle performance and allow you to find the outliers dragging down an otherwise healthy net profit.

Or, it could be a statewide or nationwide system that takes in fragmented information from each link in the entire production chain and spits out performance- and process-verified animal histories from calf to carcass.

It's an idea that has folks from all segments of the business asking themselves ­ where do I fit in?

The players

On the playing field, you have the National Cattlemen's Beef Association prudently wading into the deep end of the pool through the newly incorporated USA Cattle Information Service. It's a voluntary program marketed as an umbrella entity for states, breeds, alliances and the like to set national standards for data collection, maintain a central database through its subcontractor, AgInfoLink, and provide feedback to producers.

At the state level, you see organizations like Iowa Cattlemen's Association and Montana Stockgrowers Association that have amassed millions of dollars in outside grants and other funds -- that's millions -- to start aggressive programs for their membership using individual ID as one component to reach different goals.

And there are at least 25 feedlots, another 25 or so alliances, half a dozen packing facilities, three auction markets, a couple of stocker-types and an unknown number of ranches currently equipped with some form of electronic ID -- evidence that the building blocks to support a larger system are emerging.

Electronic ID, in the form of EID tags, seems to be a common denominator in most of today's fledgling systems. However, these systems have built-in flexibility to leave future doors open for alternative ID methods, such as iris scanning, retinal imaging and other sci-fi sounding technology (See Methods of individual ID).

In fact, technology is one facet of individual ID systems that could initially overwhelm anyone wanting to learn more about it. However, as explained by AgInfoLink's Courtney Oldham, a producer doesn't even have to know how to turn on a computer to participate in today's technology.

AgInfoLink systems

"We've tried to go about making data collection at the ranch level easier and to get it into a format that people can use," she explains. "What we're trying to do is take the information that stays on the stenopad in the front pocket of somebody's shirt, add to it and make it usable on your own operation and for the people that own the animal before or after you."

The company actually works with all segments of the industry, altering their technology to fit the needs of each different entity. At the feedyard and packer level, for instance, AgInfoLink uses more advanced methods of information collection. However, at the ranch level, Oldham says they have simply "thrown the computer away."

For example, in one system, for a fee of about $5, depending on volume, AgInfoLink sends the owner an EID tag with a corresponding postcard of sorts that is barcoded with the same number as the tag. The producer places the tag in the animal's ear and checks off appropriate information about the animal on the postcard. That could be as detailed as the injection site and brand of medicine or as simple as the ranch name.

It's up to the producer to decide not only what information he or she wants to track, but which pieces of that information will be shared with the animal's future owners. Each piece of information has a security code that sorts out shared data from private information.

If the producer administers any shots, for example, that are exactly the same for each animal in the group, he can check that off once on a group envelope, rather than checking it off on every postcard for each animal. Mail the card(s) back to AgInfoLink. If the calves go through a stocker facility, feedyard or packing plant that can and will collect information and feed it back into the system, the rancher will eventually be able to find out how each calf gained or graded.

"Basically, we are the collection piece," Oldham explains. "We provide the database, or electronic trail, if you will, that follows the animal wherever it goes. We are not an analyst; we won't tell you which bull to shoot and which heifer to keep. That's not our goal.

"We will go to somebody that is a larger entity with their own staff to provide that kind of service," she says. "We are just the mail truck. You send everything to us, and we'll get it to who needs it."

Auction market participation

In a different set up, this global company with a 45-member staff is working with Jordan Cattle Auction in Central Texas to launch a new program for "premium" stocker and feeder calves based on verified health management, combined with sorted, load lots and the potential for information feedback.

"We started seeing last fall that buyers were finally recognizing that weaned calves are worth more," says Ken Jordan. "But you have to have a credible program that buyers can have confidence in."

That's one reason Jordan says they went the EID route. "The biggest advantage of EID is the process verification," he explains. "Anyone up the chain can verify how these cattle were processed, what vaccines (which are limited) they used, where they put them, what wormer they used, that's all in the database. It's different when you see on paper or on the screen what animals were given vs. just saying the calves have had their shots."

Add to that the potential for producers to get carcass and feedlot data back. As well, Jordan says the EID system they have implemented makes running the auction more efficient. Producers who consign to these special sales are sent pre-scanned EID tags at a significantly reduced cost and only one sheet of paper to check off the health products administered to their calves.

Efficiency

So the cattle are already tagged and identified on the ranch. When they are delivered to JCA, the calves are weighed and right after they get off the scale, the alley narrows forcing the cattle to walk through a panel reader (like a metal detector at the airport) that captures each calf's eartag and matches it to its weight.

As the calves are sorted into uniform lots, the EID system also helps Jordan keep track of where they went and who they belong to.

"The extra work is the day or two prior to the sale in grouping and sorting all the cattle as they arrive," Jordan explains. "The sale then can move rather rapidly because you've already got all these drafts put together and you know what they weigh. All the producer has to do is vaccinate the cattle, put an ear tag in them and fill out a very simple form."

State-level players

On a bigger scale, two state cattle associations are using a similar process to help their members position themselves as producers of reputation cattle. The Iowa Cattlemen's Association, for instance, made some hard decisions about the focus of their organization two years ago and created an entirely new division called Iowa Quality Beef.

Iowa's ultimate goal is to attract a packer to their state. The only remaining beef plant in Iowa is strictly a kill facility.

"We were at a crossroads," explains Mark Williams, director of Iowa Quality Beef. "Our state has matured and is at the apex of vertical integration in agriculture through the advent of the hog situation. We had to make some conscious decisions as to where we were headed as an association.

"Could we survive with a declining membership? How many years could we sell $40 memberships and survive as an association and then maintain a viable beef industry in Iowa that adds about $5 million of net income to our state?" Williams asks. "Our members and leadership said, 'We've got to re-invent the Iowa Cattlemen's Association.' We've done an outstanding job from the legislative and regulatory standpoint, but that only goes so far.

"Even though we have all these legislative and regulatory wins, it doesn't necessitate a $40 membership to do that," he adds. "So, we felt we needed to become a more value-added membership services organization."

For numbers sake, Iowa Cattlemen's Association has about 12,000 members and reports the state cow herd around 800,000. When they started courting packers back in '96-'97, Williams says the main question that came from the packers was whether they were feeders first or farmers first.

"They said, 'You guys say you've got quality cattle -- can you prove it?"' he explains. "These are valid questions."

Surveys of their membership showed that close to 70 percent of the fed supply was being marketed in the second and third quarters -- a problem for a packing facility that runs year-round.

"How do you bring cattle to that facility to maintain a workforce?" Williams adds. "Do you create the network first or do you put in the packing plant first? What we are doing is helping in our negotiations to bring a packer to Iowa. We are building a database to quantify the genetic and management protocols of a known supply of cattle that could be fed into a system on a 12-month basis.

"We're getting cows in there as well as out-of-state cattle. And we're getting producers attuned to the system and more comfortable selling into a value-based system."

Tagged 16,000 head

Iowa Quality Beef has officially been in operation for one year as of this August and has tagged 16,000 head of cattle and harvested 5,000. The association had four fieldmen out in the country selling memberships, whose time was split 50-50 between ICA and IQB. These fieldmen now help producers get their cattle tagged one of three ways.

They can actually tag the cattle for the producer and input the data. They can also supply the software to producers (comfortable with Windows^®-based operating systems) with a lap top and tag reader who want to do it themselves. By the way, Iowa Quality Beef has secured cost-share funding, to the tune of $750,000, through the state's Economic Development Board to help producers purchase lap tops and readers.

Or, they can send out the tags with the postcards (AgInfoLink's system) for producers to mail in.

"When the information comes back in, there is as little hand-entry of the data as possible," Williams explains. "The only thing we have to do is scan the animal's barcode number and then scan the production information that goes with it."

How they did it

The organization only hired two additional staff members and funded the new division, for the first three years anyway, completely through outside sources. This start-up funding came from partnerships with groups like the Iowa Farm Bureau Federation and the Iowa Corn Growers Association.

As well, they have access to a $25 million revolving loan that can be used to help attract a new beef harvesting facility.

"After that three years, we have to be up and running with the amount of cattle necessary to run a division of the Iowa Cattlemen's Association at close to breakeven or a profit level," Williams says. "That means 100,000 to 150,000 head by the year 2002."

On top of maintaining a central database for their members to document the quality of their cattle and facilitate the flow of information, Iowa Quality Beef also helps members market their cattle. One of the extra staff hired was formerly Monfort's assistant head buyer and another was hired to be the feedlot coordinator.

"Today that service is free; tomorrow it might not be. It takes a lot of time," Williams says. "What we do is consult. I can tell you on those cattle that our staff has gone out and helped market, we're picking up $30 to $35 a head premium above the Iowa-Nebraska base price.

"That's nothing more than taking the information, using good visual appraisal of the cattle and putting those square genetic pegs in the square holes and the round genetic pegs in the round holes," he explains.

"It's nothing more than a carcass-based advantage right now. The beauty of the system is that the producer wins in the form of better-than-average prices, the packer wins a more uniform product they can put in their system easier, and less variation in the product hopefully makes the consumer happier."

Montana

Montana Stockgrowers Association, on the other hand, does not help members market cattle. Their goal in creating the Montana Beef Network is simply to bring more value back to the producer level through supply development.

By cooperating with Montana State University, Stockgrowers Inc., an affiliate formed by the association to engage in this new program, won a $500,000 grant to fund their activities. The Montana Beef Network has a three-step approach.

"First, we decided we were going to have to focus on beef quality assurance and get our product to the level it should be in order to receive extra value," explains Jenny Stickley, membership and special services coordinator. "The next step is cattle certification to meet certain protocol. One is a pre-weaning program, the other is backgrounding.

"The third phase is information feedback, analysis and data interpretation," she says. That feedback is made possible through the same type of system used by Iowa Quality Beef. Approximately 16,500 head of cattle have been enrolled in the first six months.

Again, like Iowa, all of this has been accomplished without using any association money. The USDA grant, combined with other grant funding, foots the bill. MSU conducts the education and BQA training, while Stockgrowers Inc. has responsibility for cattle certification, tagging and information feedback.

Participation in the Montana Beef Network requires BQA certification every two years, cattle must be individually identified with a MBN-supplied tag -- either EID or traditional panel tag -- and meet certain health and management requirements.

Supply development

"We're not trying to compete as an alliance," Stickley explains. "What we're trying to do is be a supply development entity for those alliances that already exist. Certified Hereford or U.S. Premium Beef can come to us and source the type of cattle they need. We don't want to engage in any kind of marketing, we're just trying to get a database and know what we're producing so our producers can target market."

Not to leave any segment out, Montana Stockgrowers included auction markets and order buyers in their advisory committees and planning. At some point, the auctions could use the program as a source for special feeder calf sales. Stickley says some markets have expressed interest, but none have done it yet.

And, she says, they tried to keep from burdening marketing channels with extra paperwork. MBN has a cattle passport that goes with the cattle, but that's all.

"The general membership was excited," she says. "The market has been so difficult, they were looking for something. Some people were hesitant because they have gone through programs and not gotten data back. We made it clear up front that we can't guarantee they'll get data back, but in order to get where we want to be in five to 10 years, this is the route we had to take.

"And, we are matching funds," Stickley adds. "The cost is $5 per head on EID tags, but with our grants, we're offering it for $2. The panel tags cost the producer only $1 with the grant funding. You can afford to take a chance at that level. What we're hoping is that more states do this so we can get the volume up and the costs to go down."

USA Cattle Information Service

On a national level, USA Cattle Information Service would work very much the same way, but on a much larger scale. CIS could possibly collect information from groups like Montana Stockgrowers, breed associations or alliances, facilitate the flow of data up and down the chain and set some standards in data collection.

"For example, maybe the Limousin breed could serve as a 'hub' or service provider to users of Limousin genetics," explains Kent Andersen of the North American Limousin Foundation and a CIS governing board member. "We could have an allotment of tags with the numbers and forms and encourage users of Limousin genetics to enroll their cattle in this whole animal information network.

"We would sign them up and help perform some of the administrative functions for the central agency," Andersen adds. "We would then be provided access to all the cattle that are signed up through our hub."

He also explains why some sort of a national system is important to future export markets. "Down the road, if some of our existing export customers would like a source-verified product, we anticipate they would want to look to one national verifier. This agency would serve that function."

Getting packers on board

Jimme Wilson, Montana rancher and head of the USA-CIS governing board, says a widespread buy in would also give packers incentive to invest in the technology needed to get information back to the producer.

"What we're trying to do is encourage everybody to sign up for this program so that we're looking at large numbers. Then the packers would have incentive to put in the readers and trolley tracking and whatever is necessary in their plants to read an electronic tag," Wilson explains.

"You see a lot of companies merging to help each other out so everybody doesn't have to reinvent the wheel," he adds. "Hopefully, through USA-CIS, we can provide the umbrella and grease the wheel for these guys to make it easier for them. The main thing we're trying to do is bring the packers into the system.

"That way, TSCRA, for example, can tell a producer, 'Alright, if you want to follow your cattle through -- they may be fed in Hereford and killed in Kansas -- we can get that channel formed for you. So, if you go to all the trouble to identify your cattle, you can be assured you'll get information on the other end.'"

With animal health and genetic specifications required in most value-added marketing channels, some think the cost of implementing an individual ID system will be market driven and underwritten by those folks with a vested interest. But for now, will the cow-calf producer end up bearing the brunt of the cost for tags or information access?

Cost of doing business

"That may be true," Wilson says. "But I think to assure yourself of a market, you are going to have to do this. It's the cost of doing business. Right now, there are some people participating in alliances that are getting $80 per head premium on their carcasses. If you want to get in the upper 70 percent and get a premium, it's going to cost you a few dollars.

"If you want to sit back and not do this, you can sell generic beef," he adds. "We can no longer run our business the way we have been. It's trial and error; it's haphazard. And for the amount of money that it costs on the producer's end, I don't know of anybody that runs a business like that, do you?"*