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Learn from past cattle cycles

The key to surviving the price roller coaster of the cattle cycle is to increase economic efficiency and build a financial reserve in the good years to carry you through the bad years. Given where beef prices are today, the time to build that financial reserve is now.

The typical cattle cycle is 9-11 years. It's what causes the beef price cycle, and we can count on these two cycles repeating about every 10 years. For example, the beef price cycles of the 1980s and 1990s were very similar, and the beef price cycle for the decade of 2000 will be much the same.

Fig. 1 depicts the impact that the 1990s cattle cycle, and its resulting beef price cycle, had on profits in North Dakota beef cowherds. Beef cow operators started out the 1990s with high profits/cow as the 1990-1993 period completed a seven-year period (1987-1993) of favorable beef prices and a record seven-year period of high beef cow profits.

Profits then went down for three years, beginning with a dramatic 74% drop in profit in 1994. In 1995, profits dropped to -$29/cow, then dropped to -$51/cow in 1996.

Fig. 2 depicts profitability in the last downturn. In 1993, 72% of herds were profitable. Profits fell in 1994-1995 to where only 21% were profitable in 1995. The price bottom year was 1996 (not shown in Fig. 2) when less than 15% of all beef cowherds were profitable.

Profit is “earned returns to unpaid family and operator labor, management and equity capital.” Average profits turned up dramatically in 1997, averaging +$30/cow. This rapid upturn in calf prices didn't last, and profits fell slightly in 1998 (+$14/cow.)

North Dakota's beef cow producers earned a $97 average return/beef cow in 1999. Year 2000 profits/cow are not yet available but are projected in the +$140 to +$165 area.

Expect profits to trend up through 2003, providing six of seven years of upward trending beef prices during the 1997-2003 period. Current projections are for three years of down prices in 2004-2007, with the decade low expected in 2007.

In the last cattle cycle, calf prices were strong for seven years (1987-1993) before turning down three years. The downturn was delayed by the 1988-1989 droughts in cow country, a severe 1992 snowstorm in Central Plains feeding country and frosted food grains in the Northern U.S. and Canada in 1993.

My Northern Plains Integrated Resource Management (IRM) cooperator database indicates profits in the last decade dropped the fastest in high-cost herds. Herds that survived the last downturn the best were those with high economic efficiency and a financial reserve. Current projections suggest a similar economic performance for both these groups in the 2004-2007 time period.

The current beef price cycle high is projected to last into 2003 — suggesting three more favorable calf crops. The projected price peak (2003) is again seven years after the last low (1996). It now appears the 2000 Western drought delayed this decade's downturn from 2003 to 2004.

As the current beef price cycle continues its projected seven-year high, beef cow operators should have several years of high profits. This should be enough time to increase economic efficiency and build a substantial financial reserve.

Make The Move Now

Now's the time to be proactive and implement a management action plan to take advantage of the cattle cycle. This isn't the time to continue things as usual.

When calf prices are high, improvements in economic efficiency can lead to huge increases in profits. The economic rewards from increased economic efficiency is reaped during the good times — much more so than during the tough times.

In good times, many producers drop their guard and economic efficiency slips. When prices again drop, they increase economic efficiency. By that time, however, there typically isn't enough time. Gaining economic efficiency is not a one-year phenomenon.

My final year in North Dakota's IRM Program, I worked only with IRM cooperators with at least one year (and as many as seven years) of work toward improving economic efficiency. This group managed to generate the lowest average annual unit cost of production (UCOP)/cwt. of calf for any year in this Northern Plains IRM cooperator database. Even so, 33% of the herds still had considerable room to improve economic efficiency.

When ranked by the UCOP/cwt. of calf, the low-cost ⅓ of these Northern Plains IRM herds netted $145/cow with their 1999 calves. This is $84 more than the high-cost ⅓ of the herds, which averaged only $61 profit/cow. Economic efficiency makes a difference in the high-priced years — even on intensively managed herds.

Fig. 2. Cow/calf producer profitability
1993 1994 1995
Profitable 72% 46% 21%
Near breakeven 22% 39% 43%
Not profitable 6% 15% 36%
Source: Cattle-Fax

The first step in your action plan should be to conduct an IRM standardized performance analysis of your herd. Give me a call.

Harlan Hughes is a Professor Emeritus at North Dakota State University. Retired last spring, he is currently based in Mankato, MN. He can be reached at 701/238-9607 or [email protected] .

Evaluating Market Alternatives For 2000 Calves

These planning price projections (Table 1) are based on both the futures market price and Western North Dakota sale barn prices for the current week. The price projections in Table 1 were used to evaluate five marketing alternatives for year 2000 calves shown in Table 2.

The “buy/sell margin” in Table 2 is the buying price of animals going into a lot subtracted from the selling price of animals coming out of the lot. Since selling price is normally less than purchase price, the buy/sell margin is normally negative. The negative buy/sell margin represents the marketing loss/cwt. on the purchase weight of the animals. The cost of gain (COG) represents the cost of the added weight while in the lot. Profit/head represents the combined marketing losses and profits from gain.

Table 1. Suggested planning prices
Lbs. Fall 00 Wk Feb 28 Mar 01* Spring 01* Fall 01*
400 $119 $123 $126 $127 $128
500 $105 $109 $112 $112 $113
600 $96 $97 $100 $101 $101
700 $90 $88 $91 $91 $92
800 $88 $81 $85 $85 $86
900 $89 $78 $81 $81 $82
Slaughter $72 $83 $82 $77 $75
Table 2. Traditional marketing alternatives
Marketing strategy Buy/Sell COG Profit/Hd
1. Sell at weaning N/A $0.70 $148
2. Bck high ADG -$17 $0.49 -$15
3. Fin bckg. steer -$15 $0.46 $47
4. Grow and finish -$9 $0.42 $84
5. Steers on grass -$12 $0.45 -$4
6. Fin grass steer -$9.08 $0.46 $65
The five marketing alternatives evaluated here are: 1) selling 565 lb. calves at weaning, 2) backgrounding 565 to 800 lbs. sold after first of the year, 3) finishing backgrounded steers 800 to 1,200 lbs., 4) growing and finishing 565 to 1,175 lbs., 5) steers on grass 625-800 lbs., and 6) finishing grass steers 800-1,250 lbs.

Double Trouble

Parasites can also suppress cattle's immune response.

Parasites in cattle can do more than just nip at a producer's feed dollar. They can also take a big bite out of the effectiveness of a herd health program.

That's why producers should consider delaying vaccination for two to four weeks after parasite control is administered on moderate to heavily parasitized calves and yearlings, says a USDA researcher.

A moderate to heavy parasite load can suppress an animal's immune system, leaving it less able to fight off infection or fully respond to vaccination. That's on top of the usual, more well-known effects of parasites — appetite suppression, reduced production and lowered weight gain, says Lou Gasbarre, an Agricultural Research Service immunologist in Beltsville, MD, who studies nematode infections of cattle.

“If really interested in maintaining good herd health, producers have to keep their herd's parasite populations under control,” Gasbarre says. He advocates timing animal vaccinations to coincide with when the animal's immune system is most able to capitalize and build immunity to the target diseases.

“The two keys to an effective vaccination program are a good nutrition program and effective parasite control,” Gasbarre says. As a general recommendation, he says health vaccination of calves and yearlings should be delayed two to four weeks after treatment with a broad-spectrum anthelmintic.

This, he says, allows the animal's immune system sufficient time to recover from the effects of moderate to heavy parasite infection. The drawback, of course, is that calves must be physically handled twice, Gasberre points out.

“Right now, we don't have enough evidence that a light load of parasites would have the same effect on an animal's immune system,” he adds. But, the delayed vaccination appears to make sense for calves and yearlings with moderate or higher parasite loads.

He says a “moderate” infection level exists in birth-to-weaning-age calves if just one calf in a 20-calf sample of the herd is found to have a fecal egg count of 200 or more eggs/gram of manure. In yearlings, that threshold is 50 eggs or more/gram in a 20-yearling sample.

Bert Stromberg, University of Minnesota professor of parasitology, agrees with Gasbarre's recommendation to delay vaccination. While handling cattle a second time is a drawback, he says research shows the benefit of the practice.

Stromberg says he's promoted the concept in Minnesota producer meetings this past winter. “The reaction was good for the most part. Some producers felt they probably had enough contact with cattle in the spring that the practice was feasible. Others felt it wasn't,” he says. “In a perfect world, this is what I'd do.”

Ostertagia Plays Its Tricks

The most problematic parasite, Gasbarre says, is Ostertagia ostertagi, also known as the brown stomach worm. It's particularly adept in causing immunosuppression in cattle. It works like this.

As an animal develops, a fine balance is struck in the immune system between antibody responses and those based on responses by cells of the immune system. The first responds to extra-cellular challenges such as bacteria and parasites. The latter is designed to fight intracellular challenges such as viruses, malignant tumors and some protozoal parasites, Gasbarre says. It's the balance between the two that provides the animal with a broad spectrum of immunity.

Parasites, particularly Ostertagia ostertagi, upset this balance at moderate to heavy infestation levels, Gasbarre says.

Typically, when an immune cell comes in contact with a tumor or virus, it releases communicators called cytokines to the other cells of the body. These cytokines determine the animal's exact immune response, Gasbarre says.

“Parasites, and particularly Ostertagia, invoke very strong responses of special cytokines from cells called Th2 cells. These cytokines are very good at making an antibody response,” Gasbarre says. “But those Th2 cells turn off the response against viral agents which are stimulated Th1 cells.”

The result is that the animal can be left susceptible to viral challenge. But, Gasbarre points out, the effect depends on the total parasite load. Even then, the effect may be masked.

“If you were to vaccinate an animal with a moderate to heavy parasite load, you would still get an antibody response, which would lead you to believe that everything was fine. But, in actuality, moderate to heavy parasite loads have compromised the cellular response,” he says.

The equation is further clouded by the fact that that the effect across the herd won't be all the same.

“Parasites can interfere in the immune system response of some animals, while others suffer minimal effect, and some may have absolutely no effect,” Gasbarre says. “It's like cigarette smoking in humans. If you smoke, your chances of contracting cancer are greater, but you won't necessarily get it. In this same way, parasites raise the odds of animals being susceptible to infections and/or not responding to vaccination.”

Gasbarre stresses that a lightly parasitized herd on a good nutritional plane is not at risk.

“But, in areas of heavy parasite loads, producers should watch vaccination times to ensure they make use of their herd's immunity. They should manage to minimize the number of parasites. The idea isn't to completely get rid of them but to keep them well below the threshold for any kind of potential effect.”

To ID, Or Not To ID?

That is the question – as the U.S. beef industry measures the potentials and pitfalls of a national individual animal identification system.

So far, the beef industry's start and stop and start again approach to standardized national individual animal identification (ID) reads like an adventure in the life of the Keystone Cops.

First, comes a villain most everyone can at least agree to dislike. Uncle Sam assumed that role a year ago when USDA's Animal and Plant Health Inspection Service said that if the industry didn't develop a voluntary ID system within three years, then the government would mandate one.

At the time, USDA said a system had to be developed quickly due to the success of its brucellosis eradication program. The end of brucellosis in the U.S. meant that the nation's de facto ID system, which provided the only system to efficiently track the nation's cowherd in the advent of a disease outbreak, would disappear.

USDA registered 9 million head in that program in 1992, compared to just 4 million last year. Though USDA backed off using the word “mandatory” late last year, Uncle Sam's part in the drama was cast.

Next, any worthwhile yarn demands champions of truth and justice intent on besting the bad guys. Arguably, the most visible players for this role have been producer groups such as the National Cattlemen's Beef Association (NCBA), producer-based groups such as the National Institute for Animal Agriculture (NIAA), coordinated production and marketing systems, individual producers and even vendors of ID and ID-related technology.

Finally, the victim presumably in need of protection is every cow/calf producer, stocker operator, feedlot, auction market and packer in the land.

Here's the plot: the entire industry finds itself jammed firmly between a rock and Uncle Sam's sizable fist. These are the two sides of the quandary:

  • Adopt a national system, even a voluntary one, and what does that do to liability risk, business privacy and the cost of production?

  • Ignore the issue, even if the government never mandates a national system. What does that bode for future herd health monitoring and disease surveillance, increased management opportunities and expanded international trade with trading partners already calling for such a system in the U.S.?

Here's an extra element of confusion: different folks define the dilemma, as well as the proposed solutions to it, quite differently.

Untangling The Plot

“What is it that we want? I think lots of people have answered that question, but no one has agreed on the answer. Until we do, it's like building a cow by committee,” says Burke Healey, Oklahoma state veterinarian and four-year chairman of NCBA's animal health and well being committee.

“What is animal ID? Are we talking about a numbering system, the type of ID or an information system?” wonders Healey. “It's such a big thing, it's tough to get your arms wrapped around.”

Indeed. Even if you pretend everybody wants a national system (NCBA members adopted a resolution in favor of developing a voluntary national system at its 2001 annual business meeting — the second resolution in three years), the system needed depends on its goals.

For instance, crafting a system that merely tracks an animal to the operation of origin is one thing. But, it's vastly different from trying to construct a system that tracks cattle through each stage of their production lives with multiple owners adding performance data every step of the way.

Just ask Neil Hammerschmidt, director of dairy herd services for the Holstein Association USA (HAUSA). That association is at least midstream in its innovative Farm Animal and ID Records (FAIR) project, which seeks to define a workable system for the needs of that industry.

HAUSA adopted the American ID Numbering (AIN) system in 1998. This is a 12-digit, alpha-numeric numbering system also being offered by USDA as a standardized numbering system all species could utilize.

Think in terms of your own Social Security number. If you're going to identify anything over time, there is obviously benefit to using unique numbers — one to an individual — so that the number is never repeated.

HAUSA uses the AIN for its organization's registration numbers. The idea is that this same number can be used by health regulatory agencies, milk recording organizations, etc., to identify that one particular animal.

Hammerschmidt says the system works well and already has saved the expense and hassle of multiple-numbering a fair percentage of Holstein cattle. As part of the FAIR project, however, HAUSA also is exploring the feasibility of building an information service robust enough to track individual animals through each step of production. They're already three years into the project.

Time, Money And Manpower

Healey says Oklahoma tested 600,000 head in its brucellosis program last year. Recording tag numbers, describing animals and maintaining the database required a full-time staff of eight people.

“I don't think most people have any idea of the amount of computer and manpower a national system like that would require,” says Healey.

Incidentally, part of the confusion in these discussions stems from the fact that when some people hear the term “individual animal ID,” they assume the talk is about electronic ID (EID). For the sake of clarity, EID is a method of ID. It's not a numbering system, nor is it an ID system in and of itself.

“Whether or not we have a national ID system is an issue that needs to be addressed after we develop standards,” says John Todd. Ranch administrator of Florida-based Rollins Ranches — one of the 10 largest cow/calf operations in the nation — Todd also serves as chairman of NCBA's subcommittee on animal ID standardization.

“It (a national ID system) is pretty nebulous at this point. Until we can tack down the basics, we can't look further down the road,” he adds.

Less vague, however, is the task of Todd's committee. He explains, “We are to establish standards that can be utilized by producers and vendors across the industry to enhance the profitability of individual cattle operations, thus improving the profitability of the industry as a whole… Let's standardize the information for the purpose of profitability. Whether that is something USDA can then use, I don't know.”

What's needed first, however, is a consensus on why such a system is needed. So far, the two primary reasons for a national individual ID system are:

  • Increased marketing and management potential, and

  • Enhanced herd health monitoring and disease surveillance.

As for increased efficiency and market opportunity via individual animal management, Todd has to look no further than his own Rollins operation.

“Because of individual ID, we netted $36/head last year. If you look at the bottom 13 percent of the herd that wasn't performing at least at breakeven level, our profit goes up to $115/head,” Todd says.

That's the result of Rollins' commitment in 1998 to tag every cow, bull and calf on their ranches with EID. Since they first began tracking cattle through the feedlot in 1996, Rollins has followed tens of thousands of its own animals from conception forward.

Todd explains the economic goody — enough to more than pay for the requisite tags, electronic scales, computers, etc., the first year they went to total ID — stems from the newfound ability to sort and manage cattle.

“If we can eliminate the bottom percentage of the cattle, we're doing (the industry) a service. But you can't do it if you can't identify them,” says Todd.

Lemmy Wilson, who owns backgrounding and cattle marketing enterprises in Tennessee and is also chairman of NCBA's live cattle marketing committee, feels likewise.

“Economics will drive it simply because there is so much variation. And, the only way we think we can make a change in a positive way is if we can manage cattle individually. That will require individual ID,” he says.

Healey does offer a word of caution. Although he appreciates the concerns of producers who want to build a system that allows them to collect and share information along the way, he says, “I don't think the marketing benefits of animal ID might be as great as what some people perceive them.”

As an example, Healey says some people illustrate the economic possibilities by foisting up a growing number of special auction sales. Several of these feature calves that have been weaned and pre-conditioned. Then, with the use of EID, they're commingled and sorted into uniform load lots.

Healey admits these calves are earning documented premiums at the sale barn. “But, those things in and of themselves without ID bring value to cattle. Sometimes, I don't think we put the whole picture out there for people to make a judgment.”

Glenn Slack, NIAA executive director, is convinced national herd health is a sufficient reason for developing a standardized national ID system.

“If we are going to trade with countries around the globe, we have to accept that the ability to identify a hazard and trace it back to its origin will likely be a prerequisite,” Slack says. “Think of it this way: If we were buying animals or animal products from a foreign country, what would we expect of them?”

Lynn Heinze, vice president of information services for the U.S. Meat Export Federation, explains, “Just in the last few weeks, we've had several trading partners indicate they are looking at some sort of certification or ID system (for the beef they import).”

For instance, Heinze points out that in January Korea asked USDA to certify that any beef they imported from the U.S. be in the U.S. for at least six months prior to harvest. Negotiations continue.

“We may get swept into a situation where we may have to verify with some type of system where the cattle originated,” Heinze says.

While there may never be a government-mandated ID or certification system, he adds, “What it boils down to is that ID will be a competitive advantage for the U.S. producer, processor or alliance who can step into a market and say, ‘Not only do we have a product that tastes good and is affordably priced, but we can tell you where it comes from.’”

Already, exports of beef and variety meats account for 12% of all U.S. beef production, Heinze points out.

Moreover, Slack says that when it comes to trade, ID is less an issue than traceability. He explains, “Many of our trading partners and trade competitors have an elaborate, trustworthy trace-back system in place. So, when our trade officials and export groups carry an archaic ID system to the table, it puts them at an immediate disadvantage when they could have had the upper hand. This can be addressed with a national, coordinated system for ID.”

Gary Wilson, current chairman of NCBA's animal health and well being committee, doesn't totally agree.

“Some say we need a national system to enhance food safety and animal health. Well, just because you put a tag in their ears doesn't make them healthy or safe,” he says. He adds that France had a fortress of an ID program in place, yet it did nothing to protect its market from the ravages of BSE.

“Quite frankly, from a health and food safety standpoint, if an animal disease problem like BSE or foot-and-mouth disease were to crop up, it won't occur just in that individual animal. Cattle other than the individual in question will have been exposed to the same management or pathogen,” says Wilson.

That Liability Thing

That begs the same question from system advocates and nay sayers alike. If there's a national ID system and an animal is identified with a safety or health problem, who is liable and how can anyone be sure the animal identified is in fact the right animal to begin with?

“Bottom line, from an animal health standpoint, we (the committee) support a voluntary ID system,” says Gary Wilson. “And, we appreciate USDA's concern that they are going to lose the individual ID program they've had relative to the monitoring and surveillance of tuberculosis and brucellosis.”

But, Wilson adds his committee has asked USDA — so far without an answer they find acceptable — who will be responsible for the accuracy of a database used for national herd health surveillance. Moreover, Wilson wonders, “Who is going to be responsible for making sure every time an animal changes hands that the new owner is identified. I'll be responsible for identifying the buyer I sell to, but after that, as a producer, I don't know how I track it.”

On the point of database accuracy, Healey points out, “It's not unusual today that if we are trying to locate an animal with a certain tag number, when we find that animal it's not the right one.” A number may have been transposed on one end, a tag lost and replaced on the other or a host of other manmade problems.

Suppose you either had an animal with a problem or an animal mistakenly identified as having a problem. Or, maybe a cow comes up with a problem and she's changed hands three times since you sold her, but you're still the only owner on record.

“What do we do when a tag doesn't work, a computer doesn't work or a spreadsheet within a system gets messed up?” Wilson asks. “And when we identify a problem, what's the time frame for correcting it and the status of the rest of my herd in the meantime?”

Healey says the level of liability in the event of a problem must be identified. If a hamburger from a fast-food joint makes a consumer sick with food poisoning, who's liable? Is it just the segment closest to where the problem cropped up, or is it everyone who had ownership of the cattle at some stage?

“Some claim having an ID and records system reduces liability and others claim that traceability increases it,” Healey says.

On the other side of the coin, producers who think that — in the absence of a widespread ID system — they can now hide from Uncle Sam are fooling themselves. Of the beef carcasses tracked down by USDA last year due to residue concerns, there were only 16% they couldn't find.

Incidentally, NCBA's live cattle marketing committee also has been charged with exploring the notion of liability risk management, which might include product liability insurance for producers.

Where To From Here?

Of course, all of this is just the tip of the iceberg. The industry must first agree on the type of system needed. After that come the sticky issues of developing standards for numbering systems, methods of ID, information systems, information accessibility and so on.

As mentioned earlier, even though NCBA adopted a resolution in favor of a voluntary system in 1999, it's fair to say the organization's more aggressive stance this year, following an NCBA-hosted ID symposium, was considered a dramatic shift by some. Todd says his committee plans to have standardization recommendations ready for industry consideration by next year's annual NCBA meeting or the summer session following it.

In the meantime, NCBA isn't the only group looking to help establish standards. Hammerschmidt, chairman of the NIAA animal ID and information systems, explains:

“Our strategy for the next six to nine months is to appoint an industry task force or working group on ID so we can at least identify that we collectively (across all species) support a national ID system and what segment of the industry should be established as the priority, and then develop a strategic plan.

“If we all agree that we need to have a certain level of ID, then let's identify the steps in getting there,” Hammerschmidt says.

For its part, NIAA has a decades-old record of advocating animal ID and helping the livestock industry ferret out what makes practical sense.

Both Todd and Hammerschmidt also mention the need to include a broad representation of producer, processor and vendor input to discussions. Furthermore, one would suspect that Uncle Sam himself might want to help facilitate these types of discussions.

At press time, however, presumably because President Bush's transition team isn't quite through transitioning, Uncle Sam's lips were snapped tighter than a jar of grandma's aged peach preserves.

However it evolves, even the skeptics grudgingly admit that some sort of national, voluntary system is likely to become part of the industry landscape sooner than later. As for the proponents, they're pressing hard for sooner.

“We can't wait to build this tremendously elaborate program; we don't know the practicality of it. But it's important to start with the nuts and bolts so we can build upon it,” says Hammerschmidt. “I think all the species groups have accepted the need for individual ID. Certainly, sheep is moving forward, and swine has moved quite well as far as premise ID.”

Within the dairy industry where producers are used to exploiting individual ID for day-to-day management, Hammerschmidt figures half of the ID providers have already adopted the AIN numbering system.

“I think from a broad perspective, the U.S. livestock industry needs to acknowledge what's happening in the rest of the world. Our products are competing in a global market. If we want to compete, we need to be involved in meeting the needs of international trade,” says Hammerschmidt.

Closer to home, based on his own experience, Todd believes producers are forfeiting net opportunity if they don't begin utilizing individual ID for management, with or without a standard national system in place.

“I can't wait for the next calf crop to get the next set of data,” he explains. “Every moment that passes by without individual ID, you miss the opportunity to know information about your cattle that you could never know before.

Let’s Do Country Of Origin First

Rancher Mary Burke of Cle Elum, WA, believes a national program of individual animal ID is a good idea in theory, but not unless it's done right. To Burke, that means total-life documentation of ownership, management and feeding practices, with that information being shared and accessible to everyone who had ownership of that animal during its life.

“We don't have any vehicle to do that at this time. Right now, most identification programs document just the initial owner of the calf and the processor who turned it into beef,” says the commercial cow/calf operator who serves as chairperson of the U.S./Canada border issues subcommittee to the National Cattlemen's Beef Association's animal health and cattle well being committee. “Until the industry figures out how to collect all that data accurately and get it to everyone along the chain, why should any rancher assume the liability on that calf?”

Burke feels country of origin labeling is a more immediate need for U.S. producers than individual animal ID.

“Given the fact that our health protocols are so good in the U.S., we should be more concerned about the imports than the in-country use,” she says.

Customers Demand It

The U.S. will have an individual animal ID system, says Joe Gordon. The decision has already been made by the end-users of U.S. beef products. “Customers will continue to go to their suppliers and want guarantees,” he says.

The vice president of Sparks Companies, an agricultural and commodity market research, analysis and consulting firm, says perceived value is the issue.

“Export markets are already requiring it. They want assurances, not just our word on it,” he says.

Such leverage came into play recently when packers began asking their fed cattle suppliers to certify that animal proteins had not been fed. “That type of pressure will be passed down the production chain,” he says. “Eventually, it will touch everyone.”

But, Gordon says the call for individual ID goes beyond food safety aspects. He anticipates that by 2005, 50% of all U.S. beef marketed will be sold based on some type of a consumer-driven specification.

“We need to identify the value drivers in the industry and the features and benefits of those drivers in order to better market that product at the retail and food service level,” he says.

Without such a system, Gordon feels the U.S. beef industry's competitive chances will be greatly hampered. “The size of an industry doesn't determine its sustainability. We'll get smaller, if we don't do it.”

The cost, he allows, will be high. “But cost isn't a good excuse not to do it. Other industries faced similar challenges and they've been able to do it,” he says.

Do We Have A Choice?

Marcine Moldenhauer believes the long-term viability of the beef industry hinges on having an individual animal ID system. Moldenhauer oversees value-added procurement for Excel, a wholly owned subsidiary of Cargill.

That said, she advocates such a system be voluntary.

Like other proponents of ID, Moldenhauer sees individual animal ID as an avenue to share information to improve beef, instead of being viewed by producers as traceback.

“If producers are abiding by best management practices that are endorsed by the industry, they should be proud of what they have produced and willing to stand behind it,” she says.

Another benefit: a national ID system is a way to keep the doors open on market access both at home and abroad, Moldenhauer points out.

“National animal ID would give the U.S. beef industry a united front toward food safety, herd health and being pro-active toward improving,” Moldenhauer says.

But from a packer perspective, can every animal be followed from conception to consumer? She says, “We may not have a choice.”

“We already have the ability to read electronic ID tags. Now the challenge is to marry the information all together at the packer, feeder and producer levels.”

“It's going to cost everybody,” she adds. “Especially in the beginning until there's adequate volume and it is a daily routine — instead of a once-a-week occurrence that's disruptive to business.

“I think producers should expect to pay $6-15/head depending on the data they want collected, the services provided by feedyards and packer, and any data analysis they want,” Moldenhauer says. “For now, producers can decide for themselves the cost versus benefit of collecting and using all of this data.”

The Liability Question

By Jane Easter Bahls

A national cattle ID system is more likely to decrease your liability than increase it.

A national cattle ID system is making sense to more producers as they learn about the management value of individual data, the likelihood of better prices for those who offer trace-back and the potential value in world trade. Yet, there's this nagging suspicion about liability. What if children start getting sick from tainted beef, and they can trace it back to my operation?

“This is a real key issue for a lot of people — probably determinative,” says attorney Clark Willingham of Mosely & Standerfer LLP in Dallas, TX, and a former president of the National Cattlemen's Beef Association (NCBA). “With accountability comes trace-back, and that scares a lot of people.”

But a look at the legal principles involved shows that the system is more likely to get producers off the liability hook, especially those who are conscientious in their management practices.

“The point of cattle ID is that for those who are careful, their liability will go down,” Willingham says. “If you aren't careful, if you're doing poor management, your liability will go up — and it should. It's a matter of consumer protection.”

Perry Glantz, an attorney with Holland & Hart in Denver, CO, who researched the issue for NCBA, explains that the basic legal principle is product liability. When people sell defective products, they're subject to liability if people are harmed by the defect.

In the food industry, a defective product means an ingredient was in the food that a reasonable consumer would not expect it to contain. So a restaurant or packing plant might be held liable if a customer gets deathly ill from E. coli bacteria in beef, but not if the problem was that the customer happened to be allergic to beef.

“The key element of this legal doctrine is the requirement that the plaintiff establish that the defendant caused the harm at issue in the case,” Glantz says. If so, then the people responsible can be held liable whether or not they intended to cause the harm and whether or not they were negligent in some way. This doctrine is called “strict liability.”

But, if a third party alters the product in between the defendant and the plaintiff and caused the harm, then the defendant would be off the hook. In the case of meat contaminated with E.coli bacteria during the grinding process, even if the meat can be traced back to the ranch, the producer would not be liable because the animal was sold without E. coli in the muscle.

Glantz says the most likely scenario involving liability over cattle would be drug residues in meat caused by improper withdrawal periods. If harm results, the court might rule that the producer is liable. That's when a cattle ID system would enable the plaintiff's attorney to figure out exactly who mismanaged those cattle.

“At the same time, the ability to identify the particular animal would shield all other producers who sent their animals to the same lot from being unnecessarily included in a lawsuit,” Glantz says. A cattle ID system would enable those producers to prove their animals didn't cause the problem.

“The point is that good identification, rather than being a hook for liability, is actually a defense against liability,” says attorney and rancher Wythe Willey in Cedar Rapids, IA, and NCBA's president-elect.

Willey recalls a time in his youth when tuberculosis (TB) turned up at a Chicago stockyard where his father had sent cattle. “We spent the better part of a month testing cattle for TB,” he says. An individual ID system would have quickly reassured them that it wasn't their problem.

Don't expect to see a rash of lawsuits against ranchers and feedlot owners over bad meat. In fact, a review of bad meat cases didn't turn up even one where the rancher was dragged into the lawsuit.

“While it's possible for a plaintiff to attempt to bring everyone in the stream of commerce into the action, as a practical matter, it's not worth it,” Glantz says. “The plaintiffs can recover for all their injuries from the store or restaurant that they dealt with directly.”

But should there ever be such a lawsuit, producers who follow the right procedures and can identify their own cattle will have a strong defense.

“If they can find a bad actor,” Willingham says, “that takes the taint off the rest of us and puts the blame where it ought to be.”

Jane Easter Bahls is a writer on agricultural legal issues and is based in Bexley, OH.

BEEF Taste Test

The BEEF Taste Test panel moves into a new genre of convenient beef products this month. Previous taste tests have critiqued microwaveable beef entrées. This month, it's snack foods, and the first one was a real hit.

Ortega Fiesta Dips is a four-product line of chip dips that blend seasoned beef or chicken, cheese or salsa and spices. We tried the “Nacho Beef” product. Other products in the line include the “4-Layer Dip,” “Nacho Chicken” and the “Chunky Salsa & Beef.”

The Nacho Beef Dip product combines seasoned ground beef with two cheeses, green peppers, tomatoes and traditional seasonings. It's designed as a topper for nacho chips, but it also works great on baked potatoes, finger food snacks or on taco shells.

Our 13-member taste panel this month consisted of the board of directors of the Minnesota Beef Council (MBC) and MBC staff. Overall, they rated the product an 8.77 (10-point scale), making it the highest-rated product ever in our BEEF Taste Test series.

The previous champs were Red Oak Farms Beef Pot Roast (August 2000, page 6), which scored an 8.75; and Schwan's Ground Chuck Beef Burgers (December 2000, page 14), which rated an 8.72.

Ortega Nacho Beef dip is an 11-oz. package with a retail price of $2.73. The dip is packaged in a film-covered, serveable tray that can be prepared in a microwave or conventional oven.

The product drew high scores across the board, garnering no less than a 4.4 (5-point scale) in every category of packaging, convenience and sensory factors.

Panelists lauded the product's packaging for its simplicity of design, selection of color and attractiveness. They also highly rated its ease of preparation, preparation time and serving size.

The product drew its highest scores for the sensory factors of visual presentation, flavor and texture.

“Almost as good as mother's homemade dip,” one said, “although there's more beef in hers.”

“Great taste, plus this product fits into a non-traditional market for beef,” said another.

The use of seasonings, of course, is a personal taste. One panelist alluded to that saying, “the product leaves a little afterburn.” Yet, that panelist gave the dip an overall score of 8 (10-point scale).

Ortega Fiesta Dips

Does the package clearly identify the entree? 4.5
Complete preparation instructions 4.5 Packaging
Nutrition information 4.4
Easy to prepare 4.4
Preparation time 4.6 Convenience
0-5point scale
Serving size 4.4
Does it visually present well? 4.5
Flavor 4.6
Tenderness 4.7 Sensory Factors
0-5 point scale
Palatability 4.6
Is it juicy? 4.7
Overall value
10-point scale

FEEDER NOTES - Right Up Your Alley

Got Spuds?

From time to time the subject of feeding potatoes to cattle comes up.

“Whole potatoes have about the nutrient equivalent of barley grain,” says Chuck Hurst, ruminant nutritionist, Nutritech Inc., Carmen, ID. Nutritionally, 5 lbs. of potatoes equals 1 lb. of barley.

“But, you will severely decrease the digestion of fiber, making what hay you're feeding less valuable by about 20%,” adds Hurst. He gives some other bits of advice for ranchers or feeders who want to try this unique feed source.

  • Because of the water content of potatoes (78-82%), processing of any kind is not affordable.

  • Young stock should not be fed whole potatoes because of choking.

“You should start feeding the whole potatoes at only 1-2 lbs. per head per day until they get used to them; then increase to 20-30 lbs. per day,” explains Hurst.

Potatoes can cause bloat if fed too much too fast.

“All in all, you would probably be best to buy a little more hay and add Rumensin or Bovatec to your supplement.”
Nevada Extension Coffee Shop [email protected]

Imports And Exports

Even with the increase in beef exports, the U.S. increased the net import of beef last year because imports of beef were up 5.5%.

Australia — our largest supplier of beef imports — showed an 18% increase in its exports to the U.S., while New Zealand increased its beef shipments to the U.S. by 14% in 2000 compared to 1999.

Mexico increased its feeder cattle exports to U.S. by 27% last year compared to 12 months earlier.

Total live cattle imports were up 12%, but the number of cattle from Canada weighing more than 700 lbs. — which are probably fed cattle — were down a couple of percent.

U.S. exports of live cattle to Canada and Mexico were up 46% in 2000 compared to 1999 and amounted to more than 481,000 head. U.S. shipments of live cattle to Mexico were up 26%, and to Canada the gains were more than 57%. Most U.S. exports to these two countries were probably feeder cattle as well as breeding stock.
Livestock Marketing Information Center

Texas Feedyard Facts

The average capacity of a Texas feedyard is about 27,500 head. This size feedyard will produce about 55,000 fed cattle annually, worth more that $42.4 million.

  • A 27,500-head feedyard will buy around 105,000 tons of corn and grain sorghum each year. It takes nearly 34,300 acres of farmland to produce the grain required by this feedyard.

  • To haul grain and cattle, a typical feedyard will require nearly 6,900 semi trucks a year. That means about 19 trucks a day roll in and out of a single feedyard.

  • The average-size feedyard will employ 27 people with an annual payroll of more than $550,000.

  • The 55,000 fed cattle produced in an average feedyard equate to 32.7 million lbs. of beef. At average consumption, this feedyard produces enough beef to feed 474,165 people for a year.
    Texas Cattle Feeders Association

Compiled by Clint Peck, BEEF Associate Editor. Contributions welcome: 406/896-9068, 406/896-9068 (fax), [email protected].

Individual ID is coming

At press time, Britain's total of foot- and -mouth disease (FMD) cases stood at 251, and France had just announced its first confirmed case. Cases had also been found in Argentina, Northern Ireland and the Middle East.

A total of 90 countries, including the U.S., Canada and Australia, had banned live animal imports, meat and dairy products from the European Union (EU) after the disease spread to mainland Europe.

Four thoughts struck me as I mulled the doings in Europe.

  • Thank God for the plate tectonics that put an ocean between the U.S. and Europe.

  • The U.S. programs of disease surveillance and preparedness have thus far proven very effective.

  • The European experience with FMD and bovine spongiform encephalopathy (BSE) has underscored to domestic and foreign U.S. beef consumers the effectiveness of U.S. protocols and the quality and safety of U.S. products.

  • Yet, despite that sterling record of safety, the FMD situation will increase the call from those same customers for a national system of individual animal identification and trace-back in the U.S.

They're Already Asking For It

Beef importing countries are already asking for such documentation from beef exporting countries, and most are complying in one form or another (see page 20). That competitive pressure will soon make a national system of individual animal identification simply a part of the cost of doing export business.

England's Passport system, which tracks ownership throughout an animal's life and maintains that information in a central data bank, is regarded by some as a model for the U.S. to adopt. Yet, it didn't prevent either the BSE or FMD outbreaks.

The French system, which can even provide beef shoppers with a photo of the family that produced the animal the cut came from, didn't prevent a French animal health crisis, either.

What they both do, however, is provide an avenue through which trace-back can be easily accomplished. That's a huge factor in boosting perceived value to beef consumers.

This isn't a new issue for the U.S. beef industry. It's taken on renewed life, however, after USDA began hinting a couple of years ago that the agency would consider mandating a national ID system if the industry didn't act on its own.

Developing such a system in the U.S. won't be easy. The U.S. beef industry has no clear-cut understanding of what a system should encompass and how it could and would be administered. That doesn't mean, however, that the industry shouldn't be working on those issues.

Beginning on page 8, BEEF editorial staff has laid out more than eight pages of coverage on the individual animal ID issue. We summarize the issue, the concerns and the costs, and outline the programs in place or under development in other countries. We've also sought out various industry segment leaders for their thoughts on the ID issue.

ID is more than just putting a tag in an animal's ear at birth. There are tremendous logistic and accuracy issues to be addressed in administering a program to almost 100 million head of cattle. There are serious privacy and liability issues for producers, as well.

The fact is the system will come, with or without the blessing of every U.S. beef producer. Such a system, designed with performance data gathering and analysis as its central purpose, could be a valuable tool in further building U.S. genetic efficiency and end-product quality.

Cattle producers need to take a lead role in devising a system that will not only assure consumers of U.S. beef as to its safety, but serve the needs of U.S. beef producers as well.

I'm saddened to announce the departure of Wayne Bollum as publisher of BEEF. Over his 11-year tenure, Wayne built a stellar record of accomplishment, both in the business ledger and in service to the beef industry. He will be missed as a professional and a friend. We wish him all the best.

Replacing Wayne is a familiar face, however. Ron Sorensen, a South Dakota native with more than 20 years in agricultural publishing, also will serve as publisher of BEEF sister publications Hay & Forage Grower, National Hog Farmer, Farm Industry News and Soybean Digest. Welcome aboard, Ron.

Screwworm Update

A new diagnostic kit may help reinforce screwworm eradication efforts in the U.S. and beyond.

What has orange eyes, bluish-green body and might try to invade the U.S.?

The culprit is no alien from outer space. It's the screwworm fly and its larvae — the screwworm. This parasite nearly devastated the livestock industry in the southern U.S. in the 1900s.

The USDA has eradicated screwworm from the U.S., but trade and travel to and from screwworm-infested regions like South America make re-infestation a concern for U.S. livestock producers.

The screwworm enters open wounds and feeds on the flesh of livestock and other warm-blooded animals. If left untreated, a screwworm-infested wound is deadly. Multiple infestations can kill a grown steer in five to seven days, according to the USDA's Animal and Plant Health Inspection Service.

Identifying and containing screwworm flies trying to sneak back into the U.S. isn't easy. Differentiating screwworm fly maggots from similar fly species currently requires visual examination in a lab and takes several days.

But, a new diagnostic field kit may speed up the identification and containment of these pests, says Steve Skoda, Agricultural Research Service (ARS) Midwest Livestock Insects Research Unit, Lincoln, NE. Developed by Skoda and other ARS scientists, the test allows a veterinarian to confirm a suspected screwworm in just six hours.

Because response to a suspected screwworm outbreak could include coordinating costly sterile fly releases, speed and accuracy are critical to choosing and applying the appropriate responses, Skoda says.

The kit is 99.9% accurate, and the test area turns blue when a specimen is a screwworm. Its accuracy hinges on an antibody that binds with a protein antigen in screwworm tissue samples. Skoda's lab and University of Nebraska graduate James Lester Figarola discovered the protein.

Agdia Inc., Elkhart, IN, is collaborating with ARS to commercialize the technology and says a commercial test kit could be available to U.S. veterinarians within two years.

The company estimates it will cost $5-20/sample, depending on the number of tests performed at one time, says Willye Bryan, insect diagnostics manager for AgDia. The kit will be available for purchase through the AgDia product catalog.

In the U.S., Skoda says, the kit will be used primarily as a tool to prevent the reintroduction of screwworms on live animals at ports of entry.

Besides providing a way to quickly identify cases that need treatment, use of the kit in other countries will help export officials detect early cases of screwworm in animals intended for export. It will also assist in case identification in trouble spots of the eradication program, Skoda says.

Screwworm also has been eradicated in Mexico and as far south as the Costa Rica/Panama border in Central America. Eradication efforts are underway in Panama and the Caribbean, but South America currently has no plans to begin eradication.

Screwworm eradication — including regulation of cattle movement, wound treatment and the release of sterile flies — benefits the U.S. livestock industry more than $900 million a year, according to USDA.

Calf health creates lifetime value

Get off on the wrong foot with calf health, and you can spend a lifetime trying to catch up to the lost opportunity.

“A health program at the ranch has two benefits: maintaining the health of the herd and adding value to the calf,” says Ken Odde, vice president of veterinary operations for AgSpan.

There is no comprehensive study documenting the value that calf health contributes to a lifetime of production. Abundant evidence, however, suggests it pays to take more than a nonchalant approach.

On the pre-weaning side of the fence, Odde explains, “There are studies indicating that calves that have scours have reduced weaning weights of 15-20 pounds. I think most people view scours as increased death loss, treatment cost and labor, but the biggest loss is probably in lower productivity and foregone revenue.”

Even before a calf hits the ground, Odde explains, other research points to the value of healthy mother cows. After all, lower passive transfer levels in calves — antibodies passed to the calf via colostrum — equate to increased risk that the calf will become sick later in life, especially once it enters the feedyard.

Next, a growing body of evidence suggests there is net economic benefit to preconditioning calves. This includes vaccinating calves prior to weaning, then boostering the vaccinations at or near weaning and/or applying an effective nutritional program for 45 days prior to shipping.

For instance, Dave Lalman, Oklahoma State University Extension beef cattle specialist, points to a 1996 study that compared the performance of 380 heifer calves preconditioned and weaned 45 days to another 1,600 heifer calves from the same ranch that were simply weaned and shipped (Table 1). The preconditioned calves were vaccinated and dewormed at weaning time, then boostered with modified-live vaccinations 10-14 days later. These calves were turned out on grass traps during preconditioning where they received a concentrate pellet and free-choice hay.

When all was said and done, the preconditioned calves earned a net $60.72/head more than the cost of preconditioning through harvest. And, that's on a live-weight basis. Potentially, the net return, based on differences in carcass traits and value, was even higher.

In each of these examples, Odde emphasizes, “A herd health program and a good vaccination program are not synonymous. A good health program includes a good vaccination program… An organism contributes to disease, it doesn't cause it. It takes the organism plus other variables to make the animal sick.”

Lots Of Lost Potential

As obvious as this might seem, the majority of U.S. producers are leaving a stack of economic health cards on the table. According to the Beef ’97 study from the National Animal Health Monitoring Service (the most recent available), only 25% of cow/calf producers vaccinate their calves with IBR-BVD-PI3-BRSV between 22 days of age and weaning time.

Moreover, a full 42% of operations weaned their calves on the highway. Only 17.5% kept them for 1-31 days, and another 8.3% kept their calves for 32-61 days. This study was designed to account for 85.7% of all cattle and 77.6% of all operations with beef cows at the beginning of 1996.

Table 1: Effects of 45-day preconditioning on feedlot performance and profitability
Non-preconditioned Preconditioned
Feedlot in-weight (lbs.) 550 640
Feedlot gain (lbs.) 616 540
Days on feed 220 180
Average daily gain (lbs.) 2.80 3.0
Feed conversion 6.60 6.02
Medicine ($/head) 34.00 4.33
Death loss (%) 4.44 1.30
Feedlot cost of gain ($/cwt.) 62.80 54.75
Preconditioning cost ($/head) 0 40
Feedlot cost of gain ($/head) 386.85 295.65
Fed heifer value ($/head) 795.33 804.88
Value minus total costs ($/head) 404.48 469.23
Difference in net value ($/head) 0 60.72
Source: Oklahoma State University via Cravey, Southwest Nutrition and Management Conference.

Although the percentages have likely changed since then, the dearth of basic weaning vaccinations at that time make it a safe bet that the opportunity to exploit is still gargantuan.

When it comes to preconditioning specifically, Lalman says research indicates that procurement premiums of $5-10/cwt. may be justified for cattle that have undergone management protocols similar to the one mentioned above. In fact, premiums two and three times that much have been documented at auction sales that combine a documented health program with sorting, commingling and specific genetics.

But, premiums are never free.

“When calves are vaccinated, weaned and retained at least 45 days prior to shipment, preconditioning costs in our region realistically range from $35 to $60/head,” says Lalman. “And, cattle producers often ignore indirect costs such as interest, their own labor and equipment depreciation.”

He says the nutritional program for a 45-day weaning program typically makes up 45-60% of the preconditioning cost, so that aspect alone deserves careful consideration.

“Producers who have the luxury of grazing calves on high-quality forage after the weaning period have a much greater chance of being successful from a cost standpoint,” Lalman adds.

On the other hand, Lalman says preconditioning alone can conservatively capture an additional $50-75/head between weaning and harvest. Tack that on top of the added performance that comes from healthy calves prior to weaning, especially subclinical animals that are never detected, and you could be talking major jingle.

Or, in the case of the more cynical among us, these types of documented health programs may be at least worth a bid in the future.

Bye-Bye To Bangs

Brucellosis eradication is now focused on Yellowstone National Park.

The battle is nearly won. There is now no known brucellosis infection in commercial cattle or bison in the U.S.

“We reached an apparent zero infection in late December when Florida lifted a quarantine on a previously infected herd that had been cleaned up,” says Bob Hillman, Idaho state veterinarian and president of the U.S. Animal Health Association (USAHA). In addition, the last known brucellosis-infected herd in Texas has been depopulated, according to Hillman.

No newly infected herds have been found in the U.S. since last July when infection was disclosed in a cattle herd in Navarro County, TX. But, Hillman says, while this is all good news, the cattle and bison industries can't relax surveillance efforts. “This is an insidious disease whose signs are not always easily seen,” he says.

The only remaining focus of brucellosis in the U.S. is in the Greater Yellowstone Area. This includes Yellowstone National Park areas located within Idaho, Montana and Wyoming, where free-ranging bison and elk are infected.

“These animals pose a disease threat to cattle in surrounding brucellosis-free states and serve as the only known source for reintroduction of the disease into domestic cattle and bison herds,” explains Hillman.

State and federal officials are working to develop and implement plans to control and eventually eliminate brucellosis from bison and elk in the Greater Yellowstone Area, he says.

Currently, 46 states, Puerto Rico and the U.S. Virgin Islands are classified as brucellosis-free. This means they have had no infected cattle or domestic bison herds for at least one year and have active surveillance programs in place.

Four states — Florida, Missouri, Oklahoma and Texas — are in the final stage of eradication. With no known infection at this time, these states are now in the final one-year countdown phase.

USDA's Animal and Plant Health Inspection Service carries out the brucellosis eradication program in cooperation with the cattle industry and animal health agencies in the various states. Efforts to combat brucellosis began as part of a cattle reduction program in July 1934 because of extreme drought conditions.

The program lapsed during World War II but was accelerated in 1954 as an eradication effort with additional funds. At that time, an estimated 124,000 cattle herds were infected with the disease.

A major program boost came in 1978 when a special commission's two-year study concluded that “control leading to eradication is biologically feasible.”

By August 1990, the number of quarantined herds had dropped below 1,000. Five years later, that figure was fewer than 100. In 1997, the Brucellosis Emergency Action Plan, which provided additional funds and procedures, was implemented.

It's been estimated that if brucellosis were allowed to spread, beef and dairy production costs would increase by an estimated $80 million within 10 years.

USAHA is composed of state and federal veterinarians, laboratory diagnosticians, researchers, academics and livestock producers. It's been instrumental in developing and recommending implementation of standards for the cooperative state-federal brucellosis eradication program.

Brucellosis is a contagious disease caused by the bacteria Brucella abortus. It causes abortions in cattle and can cause undulant fever in humans who consume milk from brucellosis-infected cows.

A Global Look At ID Programs

The debut in January 2001 of the Canadian ID system was fortuitous, in light of recent world outbreaks of bovine spongiform encephalopathy (BSE) and foot-and-mouth disease (FMD).

The impetus for the system was Canada's brush with BSE in 1993 when Canada's only case of BSE was diagnosed in a purebred cow imported from the UK, where it had been exposed to the disease.

“Suddenly, Canada faced a very serious situation,” says feeder Ben Thorlakson, Airdrie, AB, a former president of the Canadian Cattlemen's Association (CCA). “We found ourselves in the position of having to act quickly to eradicate not only that animal, but all cattle with the slightest connection to that animal.”

Before Agriculture Canada and Agri-Food Canada got through with its damage control, Taiwan had halted imports of all bovine products from Canada, and Japan was threatening to do the same. All cattle in Canada that had been imported from the UK were destroyed, along with all the offspring and herdmates of the one infected cow.

“We were able to continue exporting beef, cattle and genetics to the world,” explains Thorlakson.

Because the infected cow was a purebred, it was relatively easy to trace her offspring and herdmates. Thorlakson says the incident showed Canadian producers just how big the problem could have been if BSE was diagnosed in a commercial animal.

“We hadn't had a program for individually identifying commercial cattle in Canada since 1985 when brucellosis was eradicated,” says Thorlakson. “That close call (with BSE) inspired cattle industry organizations to begin lobbying for a national ID program.”

Canada's national cattle ID system relies on official eartags purchased by cattle producers and used only once. At purchase, producers are asked to provide basic information such as name, mailing address and telephone number.

The tag numbers and corresponding producer information are stored in the Canadian Cattle Identification Agency's (CCIA) database until CCIA is notified (usually by a packing plant) of the final disposition of that animal. The number is then retired. Access to the stored information is not shared beyond CCIA, says general manager Julie Stitt.

“This information, along with the individual numbers off the tags, is transmitted to the CCIA database by the tag manufacturer or distributor,” explains Stitt.

If a health or safety issue is identified with a particular animal, the Canadian Food Inspection Agency (CFIA) requests the herd of origin information from CCIA. CFIA uses the information and the location at which the problem was identified to begin tracing that animal's movements.

Stitt says CFIA can and does trace cattle health and beef safety problems found at packing plants without individual animal ID, but it's time-consuming and costly. “With this ID system we have two points from which to begin the search. This means less testing, less quarantining and less market disruption,” she says.

Start-up money for the CCIA came through grants from Canada's Beef Industry Development Fund and the federal government. The program will be self-sustainable through sources such as a small surcharge on tags sold and industry services, Stitt says.

Producer acceptance of the program is growing, Stitt adds. “Recent international events such as the foot-and-mouth outbreaks and BSE have quieted a lot of the grumbling.”


In France, one sector of private industry has taken cattle ID and meat tracing into its own hands. Soviba Group's 4,500 cattle, 1,200 pig and 400 sheep producers have developed a computerized, farm-to-consumer traceback system. Soviba is the third largest consumer meats company in France and is recognized as the leader in “quality” initiatives.

In line with a mandatory national ID program, Soviba farmers receive a passport containing herd number, breed, date of birth, etc., issued by the cooperative within eight days after a calf is born. This stays with the calf throughout its lifetime.

In Soviba's packing plant, the cattle passport is recorded and a batch number is allocated to each carcass. This information is updated throughout the disposition of the meat. Thus, each tray of meat, even ground beef, can be traced back to its original farm.

“We can guarantee the origin of the products bought by the consumer — breed, farmer, place of birth and fattening methods,” says d'Olivier Kriegk, Soviba's scientific director. “This traceability also makes it possible to monitor farming and feeding conditions.”

A unique traceback protocol allows shoppers to scan a label on a package of meat and access information about the producer who raised the animal. In addition, consumers can visit the Soviba Web site ( and learn such information as an animal's ID number, breed, sex and age. They also can access a photo, name, address and map pinpointing the producer's farm.

Northern Ireland

Until the FMD outbreak in February, Northern Ireland credits its computerized cattle ID system for allowing it to export beef months ahead of the rest of the UK. The system was developed by the Department of Agriculture for Northern Ireland (DANI) in the late 1980s to help eradicate tuberculosis and brucellosis.

Each animal is tagged at birth. Within 10 days, information about the calf and its tag number goes into DANI's central cattle computer system.

“Northern Ireland was prepared for this kind of doomsday situation,” says William Waugh, a cattle buyer from Belfast. “Northern Ireland was in the key position to bring British Isles beef back into Europe.”


The national cattlemen's association of Mexico — Confederación Nacional Ganadera (CNG) — is currently looking at a system of individually identifying cattle, then labeling the beef products derived from them.

CNG plans to develop the technology for a system that will both provide carcass quality data to producers and protect and enhance its national and international markets. CNG would ultimately like to implement a system that would see a barcode on a package of beef identifying the animal from which it came.

New Zealand

Monitoring of sales of spring weaner cattle in New Zealand showed a near 80% compliance with New Zealand's new compulsory ID program for cattle and deer. This was the first sale of a major group of stock affected by the program since it was implemented in July 1999.

New Zealand's Animal Health Board reports it is pleased with the acceptance of the program so far. The primary purpose of the New Zealand program is to trace sources of bovine tuberculosis when infected animals are found at slaughter.


Officials in Australia are questioning whether their proposed voluntary livestock ID program will be adequate to meet international marketplace demands. The country is looking at the mandatory programs coming into force in Canada, New Zealand and the EU, says AgForce president Keith Adams.

“If there is widespread adoption of the program by Australian cattle producers, then we may gain a significant advantage over our main global competitor, the U.S.,” says Adams. “We will be at a great disadvantage in the international market if we haven't had a major take-up of the program within the next three to four years.”