A pair of agricultural economists at Kansas State University, who reported on the findings of an animal traceability study during K-State's recent annual Risk and Profit Conference, say the industry is still searching for the sweet spot between tracking animals and making sure it is worthwhile for producers.
"When we think about traceability, program designers with the U.S. Department of Agriculture are concerned about decreasing our response time to diseases and preventing losses, but those in the cattle industry are concerned about making money," said James Mitchell, a doctoral student in K-State's Department of Agricultural Economics. "So you have this conflicting story of trying to make an effective traceability program, but also trying to incentivize people to use this program, because for animal traceability to be effective, you need high enrollment of animals and producers."
Mitchell, along with K-State agricultural economist Glynn Tonsor and Lee Schulz, of Iowa State University, surveyed producers to further understand what it would take to increase their participation in public or private traceability programs.
"We looked at what kind of premium a cow-calf producer is going to need to adopt this kind of program," Mitchell said. "And is that premium even feasible for a feedlot to pay to receive cattle with that same form of traceability?"
Other studies have already established that cost is central to the success of a traceability program. Something harder to pin down is what the benefits to the producer are actually worth, Tonsor said.
"For some producers, there are some clear managerial or marketing benefits," he said. "There is some probability that we will have an animal health event (at some point) that we will need that info for, but in general, the benefit of these systems are less known and certain than the costs. Therefore it shouldn't be surprising that the cost of participating has a bigger marginal impact on participating than what we present as the benefits, which are higher cattle prices."
Mitchell said sellers will be more sensitive to the cost of implementing a system, while livestock buyers are more sensitive to how much more they will have to pay to receive animals with some form of traceability.
"That's not entirely surprising because the cost of implementing a traceability program is more than the physical cost of purchasing a tag and implementing a tag," he said. "That could include changes in how you manage animals, or changes in your record-keeping system, or how you process animals. Cost is a very important aspect for those who are making that first adoption decision."
The economists evaluated systems that varied in how they would be managed, including those fully managed by the federal government; fully managed by private entities; or some combination of the two.
The full study, which was funded by a grant from the U.S. Department of Agriculture, is expected to be published soon as part of Mitchell's work toward a doctoral degree at K-State.