Texas 1st

Texas First, a project designed to clear obstacles to a two-way communications system between beef producers and retailers, had huge hills to climb in maintaining an animal's identification through packing and processing.Identity had to be maintained in three key areas:* After hide removal when the electronic ID (EID) tag no longer was attached.* As the carcass was broken down on the fabrication table.*

Texas First, a project designed to clear obstacles to a two-way communications system between beef producers and retailers, had huge hills to climb in maintaining an animal's identification through packing and processing.

Identity had to be maintained in three key areas:

* After hide removal when the electronic ID (EID) tag no longer was attached.

* As the carcass was broken down on the fabrication table.

* As the cuts were vacuum-packaged for shipment.

Texas First didn't answer every question about how the process could work. But, it proved that cuts could be sourced back to the animal with effectiveness (see sidebar).

Taking It Commercial Now, two Texas companies involved in the process - Friona Industries L.P., Amarillo; and Jordan Cattle Auctions, San Saba - are making a verified process system a component of their commercial business activities.

Friona Industries, a diversified agricultural corporation, includes the nation's eighth largest feeding company with a one-time capacity of 230,000 head. Jordan Cattle Auctions' in San Saba, Brownwood and Mason market 170,000 cattle, mostly from small- and medium-sized beef operations.

The rapid turnaround between the research and applying it commercially shows the beef industry needs an information exchange system, says Ken Jordan, Jordan Cattle Auctions president. Although much industry attention is focused on whether such a system will allow consumers to source back product to the producer, the real benefit is its immediate information return to the industry. Jordan agrees.

"There's a lot happening in the beef industry," Jordan says. "We hear from many feedyards that are interested in EID from a management standpoint. They not only want to know carcass performance, but more about the protocol of vaccination programs."

James Herring, CEO of Friona Industries, says the system will allow Friona's customers to generate a more predictable supply that has consistency and uniformity. The result will be fewer financial losses in the cattle merchandising cycle.

"As more producers discover what cattle really are, and align themselves with what the consumer wants, it will send a strong signal that will eliminate averages," Herring says. "Economic premiums and discounts will happen." A Competitive Edge

Neither Jordan nor Herring are going forward solely because of the Texas First project. In fact, Friona Industries already had tested some applications of EID in earlier projects.

Herring believed EID would make his feeding corporation more competitive. Friona tried EID on 28,000 head in partnership with the McDonald's Corp., Excel and Capitol Land and Livestock of Schwertner, TX. The project helped identify production efficiencies and product enhancements resulting from an integrated production system that uses beef animals with standardized specifications.

In early April, the same companies formed a partnership under the name of Beef Advantage Project (BAP) L.P. Its objective is to apply that integrated production system commercially. Electronically assisted source and process verification is a key element.

Herring, who also serves as BAP president, believes the data resulting from an efficient EID system will change the industry.

"The producer will be the recipient of valuable information on his cattle," Herring says. "But the barcode that starts with the product from the producer end will provide us with much more information. Through the retailer, we'll find out those gray areas: what sells, when it sells, who buys it."

Jordan wanted to hasten that day by involving more cow/calf producers, regardless of their size. He held a special sale in November that offered 5,300 head of weaned calves, all carrying EID tags, to a standing-room-only crowd.

Consignors were required to wean calves at least 45 days prior to the sale, and administer an approved vaccination and withdrawal protocol. With each consignment, the calves' data was uploaded in the Jordan Cattle Auctions' computer. When the calves were weighed at the Jordans' San Saba facility, the data was updated. Over the next 21/2 days, Jordan's employees sorted and resorted the cattle as to weights, breeds, conformation and quality.

The cattle were sold in a live auction setting, although call-in bids would have been accepted.

"We thought this process would add value to the calves because buyers could purchase cattle with known health histories sorted for similarities for the feedlot buyer," Jordan says. "Our aim was to greatly reduce that 250-pound variation between the best and worst cattle in any pen."

Under Jordan's plan, the feedyard will continue inputting the information about the cattle through the feeding phase. And the packer will provide it on the carcass value. In time, the retailer will feed back the data as well.

Objectives Achieved By all accounts, the sale achieved its objectives as prices ranged from $8 to $12/cwt. higher than the market for unweaned cattle.

"It was easily $2 to $4/cwt. better than any sale offering normal backgrounded cattle. In my opinion, it showed that the industry is ready to support this kind of sale," says Leslie Callahan of eMerge Interctive, Sebastian, FL, one of the volume buyers.

Mark Hohenberger, a buyer with Kendrick & McMahan Order Buying of Austin, TX, says the theory holds that weaned cattle, even when commingled from several different ranchers, should perform better as a group. He believes that theory drove the sale to an 8- to 12- cents/lb. higher average than other sales. Following the cattle's feedlot performance will show if the theory holds true.

Under Jordan's plan, that and much more information will be available through these kinds of premium feeder sales. The feedyards will continue inputting the information about the cattle through the feeding phase. And, a growing number of packers will have the capacity to maintain the animal's individual identification through slaughter and processing in order to supply data on the carcass value. In time, the retailer will feed back the data as well.

The information exchange will provide the cow/calf producer with vital information to help make critical breeding decisions. The purebred breeder will benefit by gaining data on whole herds from his sires' progeny, allowing him to eliminate undesirable bloodlines more quickly from his breed.

"This sale is the wave of the future," says volume buyer Jim Schwertner, president of Capital Land & Livestock Co., one of the nation's largest cattle dealers. "Buying cattle backgrounds verified by the Jordans or any other auction is very important to us. It makes them easier to sell because we can tell our buyers the story of the cattle. Plus, the fact that they are offered in truckloads makes it a much more efficient sale."

Jordan believes such sales are a logical service for an auction market to provide. They reward producers who improve their herds, regardless of size. And the sales retrofit traditional auction markets into full-service providers to their communities of producers. That's why Jordan has scheduled another premium sale for January 20 for 3,000 head, with more sales planned for early summer.

As Callahan says, "The success of this industry relies on finding these kinds of sale barns that are willing to change how they service their customers."

Some producer groups have concerns that EID places unwanted jeopardy on producers should source-verified beef be compromised from a food safety standpoint.

Jordan points out that beef products in many cases already can be traced back to their producer, particularly ground beef from cull cows. Plus, the nature of a process verification program should enhance quality assurance measures. That added effort should greatly diminish any food safety problems at the production level, he says.

Herring also believes the anxiety is overblown. The industry's emphasis, he says, should be on information exchange to supply products that consumers want. "We've got to quit being fearful of what effect consumer validation has on us personally," Herring says. "Instead, we've got to focus on providing the kind of beef products that consumers desire and want."

Texas First is a pilot project begun in 1997 by a consortium including Texas A&M University; Texas Beef Council; Allflex Inc., Dallas; Professional Cattle Consultants, Weatherford, OK; H.E.B. Grocery Co., San Antonio; Friona Industries L.P., Amarillo; Jordan Cattle Auctions, San Saba; Shiner Ranch, Pearsall; and Excel Corp.

To replicate the real world as close as possible, the project looked at three of the most common marketing avenues for the beef industry:

* A broad genetic mix of cattle with known health backgrounds through the Ranch-to-Rail program;

* Similar breed types from a single owner through Shiner Ranch;

* An auction market's put-together group of cattle, sorted for similarities in hide color and frame size, from Jordan Cattle Auctions.

The cattle were fed at Friona Industries' feedyards and Great Plains Feedyard, Hereford, TX, under a typical feeding regimen.

At the feeder calf level, the calves in each group received an EID tag developed by Allflex Inc., that contains a unique animal ID number and a radio-frequency transponder. Participating producers provided health and genetic information when available, which was archived in the computer.

As the animal entered the feedyard, the feedyard operator used the same eartag to match the producer's records with the feedyard's data on implants, vaccinations, days on feed, feed ration and average daily gain.

A big challenge was to identify an individual animal's cuts in the packing plant after hide removal. Excel selected its Friona, TX, plant to participate in this test.

Allflex developed a process where the EID tag was removed from the ear on the kill floor and placed in a bag secured to the carcass. Just after slaughter and before the carcass went into a cooler for a 36- to 48-hour chill, the EID tag was scanned and removed. In its place, the carcass received a carcass ID number and a corresponding plastic bar code tag, allowing researchers to identify the carcass both visually and with a bar code scanner.

After quality and yield grades, researchers segregated carcasses by rail in a different area of the cooler. An employee then used a bar-code reader to correlate the carcass ID number to a plastic bar-coded paper tag approved by FDA and FSIS.

To maintain identity after the fabrication table, the bar code had to go from cut to vacuum packaging. The solution was to remove the paper ID from the cut and place it inside the plastic sleeve. Once the package had been sealed, the tag and bar code could be scanned at any point. The products were then boxed and shipped to H.E.B. for retail sale.

This process received a 98% success rate in keeping the tag with its assigned cut.

A host of questions remain, some of which hopefully will be answered by a national research project about a performance data exchange system. Among those questions are:

* How to refine the equipment in the study to withstand packing plant environments and chain speeds of more than 4,000 head/day?

* Where to place the paper ID bar-coded tag on the carcass so that it is secured? This will allow the tag to stay on the appropriate cut of beef throughout the fabrication and vacuum-packing processes.

* What will the consumer pay for this process?

Texas First proved that EID will provide producers with information and that it's possible to detail this information from conception to consumption if a producer desires it. That's not to say everyone will.

"A data performance system is not for every producer," says Bill Mies, Texas A&M animal science professor and a principal researcher in the study. "Texas First simply validated the process as a tool that may make some producers more competitive if they want to try it."