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Still Rollin'

California livestock auction moves its marketing approach toward traceability.

Jim Warren tossed his hat into the electronic identification (EID) ring more than two years ago. The principal owner of 101 Livestock Market, Inc., Aromas, CA admits there were wrinkles in the EID systems he and his crew incorporated into the facility that stands a stone's throw from the Pacific Ocean.

But traceability functions opened by EID allow a whole new world of marketing possibilities for 101 Livestock's consignors.

“This is the first development in my 30 years in the cattle-marketing business that's returning the producer significant and honest value for quality cattle,” Warren said when we last visited 101 Livestock.

Since mid-2005 (see “Full Steam Ahead,” p. 32, July 2005 BEEF), the crew at 101 Livestock has been steadily fine-tuning its traceability system — and installing some new customer-service elements that are adding value in this new era of cattle marketing.

“We knew two years ago that we were stepping out of our marketing comfort zone,” Warren says today. “It's gotten steadily better though, as we've ironed out the wrinkles and added new incentives to track cattle and use EID as a tool in adding value to the consignments that come through this facility.”

A cornerstone of the efforts to EID cattle sold through 101 Livestock is the recent approval of a USDA Quality System Assessment (QSA) program. This allows 101 Livestock to meet the requirements of the Export Verification Program for Japan that requires beef come from cattle verified to be less than 20 months of age.

In fact, last August, 101 Livestock became the first livestock sale barn in the West to install a USDA-approved QSA marketing program that verifies the cattle's source and age through animal ID and birth records.

It begins at home

In order to sell their cattle through the 101 Livestock QSA program, producers must ID the animals before they leave the ranch.

“Then we can register customers under our QSA umbrella,” Warren explains. “Beef that's shipped to Japan needs to come from animals that have been through a QSA program and they need to be properly ID'd.”

101 Livestock issues EID tags to ranchers who apply the tags at branding or weaning — or “whenever it works out for them.” The feeder cattle sold through the 101 Livestock's QSA program can then be fed in a QSA feedyard that markets to packers with an Export Verification permit.

To facilitate the process, Warren or one of the 101 crew members visits the ranch to verify the cattle were raised on that ranch — and how the rancher determines the age of the cattle.

“We're out talking to those people anyway,” Warren explains. “So it's easy to get the paperwork taken care of and help keep those producers QSA-qualified.”

Warren estimates 85% of the cattle sold through 101 Livestock next year will be source-verified. Of that 85%, another 80% will qualify for the QSA program.

A common playing field

“This is a big deal for producers because they're seeing a value to the concept of EID,” he says. “We're seeing premiums that make it very worthwhile to go through these steps — which really don't amount to all that much once you've developed the mindset to get it done and incorporate ID into your management routine.”

Warren says ranchers need to quit listening to naysayers trying to convince the industry that ID efforts — and the programs they facilitate — are part of a devious scheme by government and large meatpackers to control producers and squeeze out the little guy.

In fact, Warren says QSA-approval using EID is allowing large and small producers alike to market on the same playing field.

“Herd size isn't relevant — 10 head or 3,000 head of quality cattle fit the program. As a QSA supplier, we can put calves from several owners on a truck, and the feedlot only needs one sheet of paper,” he explains.

Warren says higher prices in the future will revolve around source-verified cattle that are QSA-approved.

Because it's too expensive for each producer to get QSA-approval, businesses like 101 Livestock will be listing customers' ranches under their QSA “umbrella.” He says California ranchers are in the driver's seat to fill orders for source- and age-verified cattle.

“A lot of these cattle destined for exports are sold on forward contracts, so the price is already set,” Warren explains. “Demand for these cattle continues to exceed supply.”

101 Livestock has invested a lot of time, money and effort on this program, in part because California is the only state that produces a 700-lb. steer, calf or yearling under 14 months of age, from May 1 to August 15. Add an additional 120-150 days in the feedlot, and you have a fed steer under 20 months of age, Warren adds.

He sees the mid-fall market break as a signal to his customers to get registered under 101 Livestock's QSA umbrella for 2007. “I don't expect calves and yearlings sold to QSA lots to experience the swings in price that we'll see for ordinary cattle,” he says.

Formidable competition

Warren doesn't think the source- and age-verification movement is a fad or short-lived cattle-marketing phenomenon. He also challenges skeptics who say EID isn't practical in a sales yard. It's simply a matter of changing with the times, he says.

“In fact, we could not do all this verification without an EID system,” he adds. “We're reading tags with 100% accuracy at normal sale barn speeds. What more can you ask for?”

Warren says EID technology and the various management systems ID allows go beyond QSA. There are all kinds of management functions that not only add value but help producers do a better job at the ranch.

He's bought into the evolving movement to identify cow herds that have been screened for persistent infection (PI) of the bovine viral diarrhea (BVD) virus. Warren's encouraging 101 Livestock rancher/consignors to develop systems that will help them manage BVD and eliminate PIs from their herds. He feels it's a great way to couple EID systems and health management (see sidebar) to improve the quality of the cattle marketed through his facility.

Warren sums up the ID efforts at 101 Livestock by explaining it's all part of responsible supply chain management and getting the right product to the consumer.

“The benefits,” he says, “will be felt all up and down the beef chain.”

What's On The Block

These are the classes of cattle to be sold this year at 101 Livestock:

  • Commercial Cattle: These cattle come to market not individually ID'd. And although they may be on a vaccination program, its not verifiable.

  • Source-Verified: These cattle come with age, premise, and EID number. They also have a minimum vaccination program.

  • Certified Natural: These cattle are source-verified and have at least the minimum vaccination program and are without antibiotics or implants.

  • QSA-Approved: These cattle are source- and age-verified with at least the minimum vaccination program and will be under 20 months of age at time of harvest. They are EID tagged.

101 Vaccination Programs

  • Program #1 — At branding: 8-way; 4-way + Lepto; Pasturella with bacterin and toxoid.

  • Program #2 — At branding: 8-way; 4-way + Lepto 5 modified live virus.

    Prior to shipping (30 days to 2 weeks): 8-way, 4-way + Lepto 5 modified live virus. Though not required, Pasturella is recommended.

  • Program #3 — (the best program) Same as Program #2 but calves weaned with nasal-weaning device to reduce stress. Calves can be shipped after two weeks or standard 30-day wean off cow.

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