Chokepoint Or Checkpoint?

While hogs and poultry generally travel their entire life paths in a common group, beef animals often change hands multiple times. Often, those changes of ownership come via auction markets where thousands of animals from many different locations are congregated, sorted, sold, regrouped, put on trucks and shipped out again all at a fairly lively speed of commerce. Some 35-40 million cattle and calves

While hogs and poultry generally travel their entire life paths in a common group, beef animals often change hands multiple times. Often, those changes of ownership come via auction markets where thousands of animals from many different locations are congregated, sorted, sold, regrouped, put on trucks and shipped out again — all at a fairly lively speed of commerce.

Some 35-40 million cattle and calves trade through U.S. livestock markets annually. Government and industry are in the process of developing and implementing a national livestock ID and traceback program, and that means America's auction markets will be a critical control point in that tracking effort.

“Collection points like sale barns have the greatest need for tracking animals because that's where they are potentially commingled. Auction markets are the pinch points where animals are brought together, sorted around and then sent in all different directions,” says Dale Blasi. He's a Kansas State University Extension beef specialist and a leader in beef cattle electronic identification (EID).

So, how do auction businesses that churn tens of thousands, perhaps hundreds of thousands, of cattle each year through each of their facilities accurately and cost-effectively track all that individual animal movement, without slowing down the speed of commerce?

That's what the Joplin Regional Stockyards (JRS) in Carthage, MO, set out to learn June 24 when the family-owned firm offered 6,000 preconditioned calves in a special Value-Added Calf (VAC) sale. The difference between this and the other VAC sales JRS has conducted regularly since 1997 was that these calves were source-verified, and each was outfitted with both a radio-frequency ID (RFID) ear tag and a visual tag as backup.

During the process from unloading at JRS to load-out after sale, the calves were moved in single-file chutes past electronic reader panels at three locations — as they exited vehicles at arrival, as they exited the sale ring, and as they entered vehicles at load-out. As the calves passed by each reader, a beep sounded to signal that the information transmitted from each RFID tag had been received.

A learning process

“I thought the sale went really well,” says Jackie Moore, who along with Steve Owens is a JRS co-owner of this family business.

Owens adds: “We wanted to implement and test-run an animal ID system to learn more about how to make it work for our customers and for our operation.”

Since that initial sale, JRS has conducted others in October and November. Three more VAC source-verified sales are set for December, with the largest selling 10,000 head, scheduled for Dec. 2. Another three VAC sales are planned for January, all in the neighborhood of 7,000 to 10,000 head each. Over a 12-month period that will end next spring, Owens estimates JRS will market about 150,000 head of source-verified, RFID-fitted cattle.

“We learn a little more from each sale,” Owens says, “and this is still very much a learning process for us. As a result, we don't have any overall recommendations to make just yet.”

But one thing that is certain, says Owens, who serves as vice-chair of the National Cattlemen's Association (NCBA) Livestock Marketing Council, the demand for source-verified cattle is sure to grow. He believes it's a certainty, even if there were no push underway for a national system of individual animal ID and traceback.

“Niche markets will require it,” Owens says. “And, when source verification becomes mandatory, there won't be any premiums. Therefore, we feel it's best to participate early and figure out for ourselves and our customers how it will be done.”

That demand has been borne out in the JPS source-verified sales held thus far. Owens says sellers in the special June sale realized premiums of $5-$8/cwt. over the prices brought by commodity feeder calves sold earlier that week. In the October EID sale, premiums were $4-$7 over the commodity calf sale JRS conducted earlier that week.

“That's a total of anywhere from $25-$40/head for a protocol that included certain health and management practices and source verification,” Owens says.

A longer marketing process

Mark Harmon, in charge of marketing and public relations for JRS, says the use of EID in their June and October sales added about 1½ hours to the day's selling process.

“The speed will improve in future EID sales,” Harmon says, “but it does slow the sale down.”

Regarding the accuracy of the electronic readers in collecting data from the RFID tags worn by calves, Harmon says that, of the first 700 head sold the morning of June 24, the readers missed only six or seven tags.

“And those misses could have been due to bunching by the cattle, or it might have been due to missing tags. EID can be difficult at times because you can't always control what some animals will do. But, because each calf in the sale also had a visual tag, we were able to match them up to the spreadsheet anyway,” he says.

Harmon says his past year has been largely consumed by the EID source-verified concept. The effort began last March with testing at JRS of different reader and tag components.

“Then, we put together a pilot group of people, consisting of representatives from ear tag suppliers, pharmaceutical companies, feed companies and data management folks,” Harmon says.

Working off what they learned, JRS made some modifications to the existing operation in order to facilitate smoother cattle flow and EID equipment. In addition, the auction's computer system was redone and the business's software customized to streamline handling of all the extra information.

Rethink and tweak

Following each source-verified sale, Harmon says JRS has studied the experience then made modifications to streamline the next sale.

Harmon says the impetus for JRS's EID trailblazing effort is simply customer service.

“We try to be progressive, but if a practice doesn't make our customers money, then there's no sense in doing it,” Harmon says. “We're seeing some great competition for these calves, and we'll continue to source-verify cattle as long as it puts money in our producers' pockets.”

Harmon believes JRS's foray into EID will prove helpful to other auction businesses down the road.

“Over time, we hope we can work out a lot of the bugs and make it easier and more economical for smaller yards that join this effort later,” he says. “We're learning more every time, but it's still too early to make recommendations.”

Owens hopes the mandatory aspect of such a traceback program is at least 3-5 years off.

“All the members of NCBA's Livestock Marketing Council realize an animal ID and traceback system is needed and that it's coming,” Owens says. “But, most would agree that we're not prepared to have any kind of mandatory system in the next year. We really need another three to five years to figure this out.”

KSU's Blasi agrees. “A lot of market facilities in the U.S. are old. Attempting to read the animal at some of the critical points needed to maintain inventory information with EID will require some cutting-torch and welding work in order to retrofit a low-frequency ID system to accommodate the speed of commerce,” Blasi says.

Anxious auctions

As is every segment to some extent, Blasi feels the auction segment is particularly anxious about the ramifications of a national ID system, including concerns of added costs and potential loss of business.

“If you're a sale barn selling only 500-1,000 head/week, a big concern would be just the cost of installing equipment,” Blasi says. “When it can cost several thousand dollars for a stationary electronic reader, how do you recoup that cost? And, if they pass it on to their customers, will there be a backlash?”

In fact, in January comments regarding the U.S. Animal Identification Plan, the Livestock Marketing Association's Billy Perrin said the cost of refitting the markets to accommodate the movement of animals through the market and past the readers will likely be much greater than the cost of the readers themselves.

“Also, we anticipate that the cost of setting up and maintaining the computer infrastructure and hiring technical staff to run and maintain these systems in the markets will be equally enormous,” Perrin added.

Blasi says larger sale barn firms, those perhaps marketing 5,000-6,000 head each week, worry that sellers with larger drafts of cattle might go direct to the buyer to bypass the potential for added stress and shrink on cattle. But, having said that, Blasi says all one has to do is look at JRS to see an entirely different perspective.

“Jackie Moore and Steve Owens are going at that change loaded for bear because they see the opportunities there. They aren't afraid of change,” Blasi says. “To survive, sale barns need to spread their wings and take their services to their customers.

“There will be an incredible need for educational programs with the national ID traceback program,” Blasi says. “There's an awful lot of rumor that circulates out in the country and there will be a high demand for education.”

He says firms could offer EID tagging services to their customers, help them obtain their premises ID, assist them in recordkeeping or take the lead in scheduling the marketing of their livestock.

“If you're a progressive auction market, EID won't be a problem,” Harmon says.

You can learn more about JRS at