Will You Be Ready To Play?

As it stands, mandatory country-of-orgin labeling will likely force some stocker operators and other beef producers to take recordkeeping a lot more seriously, or pay the price.

Describing what stocker operators and other beef producers must do to comply with the current country-of-origin — labeling (COOL) law — to become mandatory on Sept. 30, 2004 — is a lot like trying to tack Jell-O to the wall with a 10-penny nail. Nothing sticks.

In fact, the same law making COOL mandatory also prohibits USDA — which must administer the law — from creating a common, required identification system that would make sharing and tracking COOL information easier. Never mind that producers are being asked to be prepared to comply with a mandatory law before they even know the specifics of that law.

The mandatory COOL rules will be crafted following a review of the voluntary COOL rules. Problem is, compliance to ranch origin means stockers and cattle feeders need to have their COOL system together, to make sure their cattle will be COOL compliant, if they don't want to limit buyers for their cattle once the law becomes mandatory.

“If it stands as outlined in the letters we've received from packers, we'll have to do quite a bit [to bring cattle into COOL compliance],” explains Scott Anderson, manager of Texas County Feeders, Guymon, OK, part of the Brookover cattle feeding organization.

The letters he refers to have so far come from IBP and Swift. While the language varies, the basic instruction is the same: “Since our customers [retailers — COOL doesn't require restaurants or food service to label for origin] are demanding we have an auditable trail all the way back to the ranch of origin for all of the carcasses we procure and market, we must ask you to provide this information.”

The inference is that providing the information is a condition of sale. The letters also specify that if a packer gets hung with a carcass that's untraceable to its ranch of origin, that packer will fine the feedlot that sent the carcass, presumably because the retailer will have fined the packer.

In turn, if the law and packers' demands remain the same, Anderson believes cattle feeders will have no choice but to pass the demand on to their cattle suppliers. After all, it's not uncommon these days for loads of calves headed to stockers and feedlots to represent 15-20 different ranches of origin, often anonymous to the buyer.

Plus, in a do-it-or-else chain of industry command, feedlots are the ones that apparently assume the majority of liability for COOL. That's because retailers have very few packers to keep track of, and packers have relatively few feedlot suppliers to monitor. Ahead of the feedlot, even a convoy of multiple-source loads of calves destined for the stocker pasture represents relatively few sources of origin, compared to what feedlots must track.

However, if feedlots are forced to pass the COOL demands on to their suppliers, the economics demand that stocker operators will make the same demand of their suppliers. That's if they'll even buy cattle without COOL verification.

“As a stocker buyer I'm going to have to be careful,” says Bob Dixon of the Flat Creek Ranch, Black Rock, AR, a cow-calf and stocker operation. “I don't want to buy any COOL-ineligible cattle.”

Because he's identified and tracked his own calves individually for years, Dixon says mandatory COOL won't be a problem on most of his animals. But, when it comes to purchased stocker cattle, he says sellers will have to provide him with COOL verification.

“To be in compliance I'm going to have to be able to tell my buyers that everyone I bought cattle from signed an affidavit verifying the cattle are COOL-eligible,” he explains. Or, that the sellers provided some other form of documentation.

Better Safe Than Sorry

Dale Blasi, Kansas State University (KSU) Extension beef specialist, says his recommendation to stocker operators and other beef producers is to be prepared to provide buyers with COOL documentation.

“Until the day comes that the law changes — if it ever does — our thought is you need to take advantage of this time prior to mandatory COOL to collect and maintain the information that can place you in compliance with the current law,” he says.

At the risk of coming off as a Chicken Little, or as either a supporter or detractor of the COOL law, Blasi says, “If my role in the beef industry is assembling and adding value to groups of cattle, I need to do everything in my power to identify where they come from. I'd ask someone to sign an affidavit verifying the country of origin. As a buyer, I have a right to know specifically where they come from.”

As it is, Anderson says, other than infrequent vaccination histories, Texas County Feeders isn't receiving any more information than they ever did about cattle coming into their yard. That means they don't know the cattle's ranch of origin unless their order buyers collect and pass the information along.

Whether sale barns and order buyers will make such verification a condition of sale, or someone else will, is anyone's guess at this stage as the industry scrambles to make sense of the law. One thing is sure though, the clock is ticking.

“At present, we haven't been forced to do anything,” Anderson says. “All the cattle we'll see [coming into the yard] between now and September will be harvested prior to when COOL becomes mandatory.”

By this fall, though, he believes feedyards must know how they'll verify country of origin from that point forward. In the meantime, he'd like to see folks running Mexican or Canadian cattle to identify them distinctly so they would be easier to track through the system.

Blasi points out that if he were buying stocker cattle today, a percentage of them could come under the COOL law. As a result, he suggests that stockers start collecting origin verification information, be it processing orders, sale tickets, back tags, signed affidavits or anything else that helps prove where the cattle are from. “Document the inventory you have; where it comes from specifically and where it goes,” he says.

Tools Of The Trade

Likewise, John Lawrence, director of Iowa State University's Iowa Beef Center, says it's better to err on the side of caution and begin implementing a record-keeping system as soon as possible to avoid problems later.

“Creating a paper trail leading from birth to the feedlot will ultimately save producers time and effort if and when country-of-origin documentation becomes mandatory,” Lawrence says.

In simple terms, suppliers will likely be asked to provide documentation of their ownership prior to marketing the cattle, as well as verification of where the cattle are from and where they originated. Documenting ownership can be as easy as keeping purchase receipts, sale bills, business records, weigh records and stocker close-outs. It can be as elaborate as tagging every head individually and maintaining verifiable records for each individual.

Origin information is where it could get stickier. As a stocker operator, do you make country-of-origin documentation and verification a condition of the buy? Do you discount unverified calves enough that it doesn't matter if potentially the cattle can only be sold for food service trade?

“No one knows today exactly what records will be required or how they will be verified,” Blasi says. “But, if you document the fact that you did everything you could to be in compliance with the law — document your due diligence to comply — I find it hard to believe that USDA will fine you.”

On the bright side, Blasi says, “Any assignment of individuality opens up opportunities to manage at a higher level.” In other words, even if producers get red-faced, fighting mad about having to comply with COOL, they could use it to their management advantage.

“The key to my total operation is knowing individually what each calf is doing, thereby allowing me to know what the group is doing,” Dixon says.

Plus, Anderson interjects, “We're all talking about how the price-discovery system needs to evolve to keep up with things in the industry. Maybe COOL and the records it will require will be a catalyst to that.”

Dixon says COOL represents “the tip of the iceberg” of what's coming. “And that's industry coordination from the time the calf is born to the time it's served to the consumer in the meat case, and to do that I think we need a flow of information,” he says.

“Maybe I'm selfish,” Dixon adds, “but I sell halfblood English x Continental cattle that I believe are above average. I want my buyer to know that [with information]. I want them to know my cattle are quality and performance assured.” He thinks that will become more possible as the market demands that producers provide more information.

At the very least, Dixon explains, “If there's a problem with my cattle, I want the buyer to tell me about it so I can correct the problem. But, they can't do that if they don't know where they're from.”

However it plays out, and what steps, if any, producers take in the meantime, Anderson says, “It looks to me like we will all need to get in the habit of keeping better records.”

For more on stocker cattle information topics, visit www.beefstockerusa.org.