The recent case of BSE in the U.S. has brought close attention to the proposed US Animal Identification Plan.  It also brings into focus just how important this plan is and the need for timely implementation.

What is the US Animal ID Plan?

The USDA’s goal for the plan is to develop a system that will identify individual animals and allow trace back of all livestock to their farm of origin within 48 hours.  It is positioned to be an animal disease control tool that will help to ensure the health of the US livestock population and protect the income of animal producers.

The National Institute is creating the plan guidelines jointly for Animal Agriculture and the US Animal Health Association.  At this time, the program is set up to be voluntary, but in order for the plan to be successful, participation will eventually need to be mandatory.

In October, the Beef Information Exchange  (BIE) was formed to create a platform in the beef industry to exchange information.  Five companies involved in animal identification and information networking comprise the BIE:  AgInfoLink, APEIS, eMerge Interactive, IMI Global, and Micro Beef Technology.  Each of these companies also participate in the USDA’s National ID Developmental team.

How will it work?

The current plan proposes the use of Radio Frequency Identification (RFID), which uses a computer chip and a visible imprint containing a unique 12-character number.  The chip can be attached to animals either by ear tag or a bolus.  This method of identifying animals is proposed because it is the most efficient and cost effective method available at this time.  Because of the large number of animals and their wide geographic distribution across the U.S., RFID would be most efficient.  It reduces the chance for human error by eliminating the need for hand entry, and also reduces labor costs.  Currently, RFID is the most commonly used method of electronic ID in the U.S., and is most often used via ear tags.  The cost of RFID tags starts at a little over $2 per tag.

What is the cost and who pays?

Estimates to put the plan into place are around $500 million for the first 6 years.  This figure covers communication, infra structure, administration, and start-up.  At this point, the “who” of funding has not been determined, but the livestock industry is responsible for providing a plan for funding.  Other countries that have national identification systems in place have some form of a government and industry partnership in place to cover costs, and it looks like that is the way the U.S. plan may go.  Efforts will be made requiring federal and state financial support to make the plan successful.

What is the timeline for implementation?

Implementation will be in three phases:  Phase I involves premises identification by state veterinarians by July 2004; Phase II involves individual or group/lot identification for interstate (July 2005) and intrastate (2006) commerce, and Phase III involves retrofitting remaining processing plants and markets and other industry segments with appropriate technology that will enhance the ability to track animals throughout the livestock marketing chain. 

Initial implementation will focus on the cattle, swine, and small ruminant industries.  The plan proposes that individual or group/lot numbers be available for issuance by February 2005.

Producer liability and privacy

One of the main concerns of producers with the national id system is their privacy and potential liability.  As proposed, producer liability should not change.  In fact, the system may help protect producers who elect to collect additional data like management practices, animal health programs, other inputs, etc. that would help provide more background information on the cattle that they market.  As is the case now, producers would however still be liable for knowingly marketing an animal that is unfit for human consumption. 

The other key concern of producers is privacy.  The plan puts forth that all data collected is solely for the use of animal health officials in the event of a disease outbreak and the need for a trace back.  Work is still being done on this section to address producers’ concerns.

What other countries have national ID systems?

Canada, New Zealand, the European Union, and Great Britain currently have mandatory identification programs in place.  Australia has a voluntary program and Japan is currently expanding its mandatory program.  Countries that have begun implementing a national ID system include Argentina, Brazil, and Uruguay.  Mexico is also working towards implementing a program as well.

Current status

The National Animal Identification Development Team has extended, through January 31, 2004, the opportunity for all interested individuals or groups within the animal agriculture industry and government to provide needed input to the on-going development of the U.S. Animal Identification Plan (USAIP).

Currently, USAIP Species Working Groups are being formed to provide needed detail to the Plan including, but not limited to, infrastructure needs, preferred identification devices, and suggestions as to how current identification systems may be integrated into the Plan. Recognizing there are many details that need to be addressed within the various species, it is essential the Working Groups hear from industry stakeholders in order to best incorporate the suggestions and observations offered.

What can you do?

As a beef producer, you can take an active role by becoming educated about the plan and providing your comments and suggestions to the USDA regulation writers.  To learn more about the proposal and provide your input, visit www.usaip.info.  By learning more about the proposed plan, you will also be better able to implement and benefit from it once it comes into action.

Current Markets and Profit Potential

Current Markets

The beef market did react to the news of the BSE case in Washington state, and the resulting 30 countries that banned U.S. beef.  However, even though markets took a dip, prices are now holding steady at levels higher than a year ago.  These prices allow plenty of room for profit potential on Tend-R-Leen steers, even if the price of corn rises.  Here is a sampling of current auction market prices for finished Holstein steers for mid-January.

Equity Coop, Barron, WI:                              $63-67

Equity Coop, Richland Center, WI:               $68-70

Equity Coop, Lomira, WI:                              $63-67

Central Livestock, Albany, MN:                     $67-71

Central Livestock, Zumbrota, MN:                $73-76

For current packer pricing, contact Packerland directly at 1-800-753-7724.

Profit Potential

Birth to market

Starting weight:  100 lbs.    Cost:  $140

Market weight:  1270 lbs.   Price:  $0.70/lb.

Corn price:  $2.25/bu.

Expected income:  $889/hd.

Expected profit:  $223.32/hd.

Break even:  $0.52/lb.

If the corn price is $2.50/bu. the expected profit is $199.25 with a break even of $0.54/lb.

Feeder to market

Starting weight:  350 lbs.    Cost:  $315

Market weight:  1270 lbs.   Price:  $0.70/lb.

Corn price:  $2.25/bu.

Expected income:  $889/hd.

Expected profit:  $176.11/hd.

Break even:  $0.56/lb.

If the corn price is $2.50/bu. the expected profit is $154.56 with a break even of $0.58/lb.