It seems so simple. A buyer wants you to verify the age and source of the calves you're selling, even says they're worth more money if you do. They're all wearing your brand and you've got calving records going back to Noah's foundation stock; no problem.
But the buyer shakes his head and asks which Quality System Assessment (QSA) or Process Verified Program (PVP) your calves are enrolled in. Huh?
Welcome to the complicated limbo of documenting and qualifying cattle characteristics in a way that can withstand the scrutiny of domestic and international beef customers.
At their simplest, QSAs and PVPs are audit and verification programs through which your calves can get the government stamp of approval required by current USDA Beef Export Verification programs. Japan requires such documentation for U.S. beef imports in order to verify that no beef comes from cattle older than 20 months. The EU requires it for U.S. beef imports to verify compliance with the standards of Non-Hormone Treated Cattle (NHTC). This same kind of USDA-approved, third-party verification is also finding favor with domestic customers wanting verification of age, source, animal-welfare practices and natural-beef standards.
Unfortunately, QSA and PVP — which require animal ID — have come along at the same time USDA is trying to implement its National Animal Identification System (NAIS).
“The biggest misunderstanding in the country, and one that's slowed adoption of source- and age-verification, is some mistakenly think QSA and PVP are steps in a national animal ID program,” explains Bill Mies, vice president of national accounts for eMerge Interactive. “They're amazed to discover QSA and PVP are private-industry programs aimed at getting them more money for their cattle.” eMerge offers source- and age-verification through its own PVP program.
Mark Spire, bovine technical services manager for Schering-Plough Animal Health, emphasizes there are lots of folks, including government officials, who continue to wrap NAIS — and its purpose for national animal disease surveillance and animal health monitoring — with animal ID needed for market-driven programs such as QSA and PVP.
“This confusion has delayed the widespread adoption of both types of USDA programs,” says Spire. His group offers age- and source-verification through a PVP provided by its Global Animal Management company.
Even when producers understand this basic difference, the picture gets cloudy because QSAs and PVPs are two similar but different routes to a common destination. For the purposes of this article, both are routes to age-verification for government export programs.
QSAs and PVPs are alike
Both QSA and PVP are supported by quality-management systems that document specific processes in such a way that auditable claims can be made about cattle in accordance with specific, internationally recognized standards. For age-verification, both provide USDA-approved corroboration that the system used for verifying age is accurate enough to withstand periodic audits by a third-party source.
Consequently both programs require records documenting age. Leann Saunders, vice president of IMI Global (IMI), explains these can be calving records for a defined calving season, including when the first and last calf was born, and how you know that. IMI helps others build and maintain QSA programs and also offers its own PVP.
“You also have to be willing to share records that support the number you want qualified, such as cow-inventory and bull-turnout records. Any supporting records you can provide make the process simpler,” Saunders says.
In other words, both programs require audits by the company providing QSA or PVP services. “Both programs will receive intense scrutiny and auditing,” says Glenn Smith, U.S. manager for AgInfoLink, which offers a PVP for source and age.
“If you're verifying a claim for age and source, for example, if it's done correctly, record requirements should be similar between QSA and PVP,” Saunders says. She emphasizes, “The validity of the claim is the same for cattle coming through QSA and PVP.”
How they're different
“The PVP requires more detail and covers a larger scope of activities than a QSA, such as source and age, in addition to other requirements like feeding management and genetics (Table 1),” explains Cara Gerken, IMI's vice president of quality-control services. “Conversely, the scope of a QSA program is very specific and defined.”
More specifically, Saunders explains, “The QSA is a limited-scope PVP where the company that maintains the program has fewer documented procedures and fewer records that must be maintained. For example, a PVP company must control all promotional materials and have those materials approved by USDA, whereas, a QSA does not have to meet that requirement. Also, a PVP-approved company can use the “USDA Process Verified” shield in marketing material, while a QSA program can't.
“But, keep in mind the validity of the claim is the same for cattle coming through QSA and PVP programs.”
Generally speaking, USDA officials say program-compliant ID tags installed at the ranch of origin are key to achieving and maintaining the greatest flexibility in marketing age and source claims with either QSA or PVP. According to program standards, these tags are single-use, tamper-evident tags with a unique, non-repeatable ID number. The tags can be visual, electronic or a combination.
Again, that's from a general standpoint because no two QSA or PVP programs are exactly alike.
“Cattle can lose their conforming status moving through a QSA or PVP, and cattle can retain their conforming status from the ranch to the packer in a QSA or a PVP,” emphasizes Saunders. “It all depends on the specific program.”
(You can find the mountain of detail contained in that single statement at http://www.ams.usda.gov/lsg/arc/audit.htm.)
Now, throw in the fact that purveyors of programs market information differently in the name of competition, and you should feel no shame in being plumb flummoxed.
Marketing opportunity is the key
Choosing to participate in any QSA or PVP should begin with deciding whether you want the added responsibility.
As Saunders points out, “At the end of the day, you're responsible for claims you make about your cattle through these programs.” That, and the need to show necessary records to any outsider, is more than some producers want to consider.
If participating in one of these programs fits your needs though, start the selection process based on how you currently market your cattle and how you could market them.
“Do you sell on the open market or to the same buyers each year?” Mies asks. If you sell into a single branded program, a QSA could be the perfect answer.
“How many value-added programs will your cattle qualify for?” Mies wonders. Maybe they're already 51% black-hided (CAB® eligible). Perhaps you precondition but don't document and market them as such. Maybe they're eligible for natural programs. If so, then the breadth of a PVP may win the race.
“If you already have a relationship with a program offering premiums for specific verified attributes, I wouldn't burn any bridges,” Saunders says. “If you're not in one, look at whether you have a relationship with the marketer of your cattle; if so, do they have a program? If not, go to USDA's Web site and call the programs listed. Is the company doing the right thing? Do I feel comfortable with them?”
Smith concurs. “It's important you partner with companies with a high level of integrity; I think most do. Also look at other value-added services they provide and the level of customer service. Who's going to be there for the long haul?”
Next, Spire says, “What's the total cost of participation? It varies with each program based on annual service fees, audit costs, animal fees based on certificates generated, tag costs and cost of required products to meet program specifications. Producers need to do their homework to assure a program meets their needs and expectations.”
Whatever the pricing model, most estimates put the cost of qualifying cattle for age-verification through a PVP or QSA at less than $5/head, including the tag; many at $1.50-$2.50 without the tag.
In return, premiums are being paid for age — sometimes.
According to Mies, age premiums are running $3-4/cwt. on feeders and calves, $2-3/cwt. on fed cattle. That doesn't mean there's always money to be had, though.
Spire believes the sources for age premiums are dwindling, as packers are typically able to meet still-paltry Japanese demand by pulling from their regular purchases.
More than anything, before signing up with a program, Mies recommends, “Ask them to tell you the rest of the story. The requirements to participate are fairly easy to understand, but what are the consequences? Does it limit my marketing? Do I have to buy a tag or other products or services from the company? Do I have to document and report deads? Don't wait until you order the trucks. In a rush and a panic trying to get cattle qualified for this program or that one, is when bad decisions get made.”
|Process Verified Program (PVP)||Quality System Assessment (QSA)|
|Eligibility — Age and/or Source PVP or QSA verified cattle are eligible for export verification programs||YES||YES|
|Marketing claims are chosen by each company||YES||YES|
|Marketing claims can include:||•Age |
•Additional claims, as approved by USDA, AMS (such as conforming to NHTC requirements)
•Non-hormone treated cattle (NHTC)
|Marketing the approved PVP or QSA||Approval is posted on USDA's Web site — can use the “USDA Process Verified” shield in company written marketing materials||Approval is posted on USDA's Web site — ONLY|
|Program-Compliant Tags — cattle can be marketed through unapproved and approved locations||YES||YES|
|Quality manual required||YES||YES|
|Requirements — ISO9001:2000||Requires specific information on all major elements and sub elements of the ISO9001||Does not require all elements of ISO9001|
|Requirements — USDA specific||YES||YES|
|Scope||Large scope requires more detail and covers a large range of marketing claims||Limited scope and very specific marketing claims|
|Supplier Evaluations — Do PVP and QSA require supplier evaluations and re-evaluations?||YES||YES|
|USDA Program Began||mid 1990s||2004 (modified version of PVP)|
|Source: IMI Global, Inc., based on USDA, Audit, Review and Compliance Branch's Q&A site: http://www.ams.usda.gov/lsg/arc/arcQA.htm|