Better traceability across the U.S. beef production chain will be necessary to compete in international markets, and to provide information that adds value from farm to table, but significant barriers remain for adoption of comprehensive traceability in the United States.  Those were a few key messages during a panel discussion on the topic during last week’s International Livestock Congress in Denver.

The expert panel consisted of Mark Gustafson, VP for international sales at JBS, Rick Stott, executive VP at AgriBeef and John Butler, CEO of the Beef Marketing group.

 Leann Saunders, with “Where Food Comes From, Inc.” an animal-identification and verification company formerly known as IMI Global, moderated the discussion.

Saunders provided some background, noting that historically, traceability in the U.S. has been market driven, with some producers pursuing premiums for “story beef.” The discovery of BSE in the United States, and subsequent disruptions to our export markets created a demand for age verification over the past decade. As long as producers were engaged in age verification, they added source verification and in some cases process verification for added value.

The federal Animal Disease Traceability (ADP) rule, which takes effect March 11, focuses exclusively on disease, rather than verifying value-added attributes or qualifying beef for export. Saunders adds that the scope of the rule is far more lenient than mandatory systems in place in most other beef-exporting countries.

Gustafson says most countries have some degree of traceability, with Australia’s system probably the most sophisticated. He recalls the Australians 30 years ago were debating the same issues we are debating now, such as privacy and costs. Without a voluntary agreement, the government stepped in with a mandatory program. The resulting system has helped make Australian beef highly competitive in international markets.

China, Gustafson adds, will insist on traceability as a condition for any eventual agreement to import U.S. beef.  Lack of traceability could become the most significant non-tariff trade barrier for U.S. beef.

Stott notes that the AgriBeef operation includes cow-calf, feedlot and packing components, and uses animal traceability extensively. Most of their traceability efforts are intended for internal use to improve beef quality and productivity. Among the company’s branded beef products, only one, “Snake River Farms,” is identified at the retail level as traceable back to the ranch. This brand features American Wagyu beef products, and much of it goes to the export market.

Domestic retailers, Stott says, are currently not asking for traceability on beef products. Instead, they focus on quality, consistency and value.

Butler says the Beef Marketing Group (BMG) consists of 16 aligned feedyards in Nebraska and Kansas, using value-chain alignment and communication up and down the chain to provide consistent supplies of predictable cattle to the packer. Traceability across their production system enhances transparency with customers and helps add value. Traceability programs at BMG are voluntary and market-driven, he adds.

Increasingly though, stakeholders further down the production chain could pressure producers to implement traceability and verification systems. Butler cites Tyson’s “Farm Check” program of audits, which is under development this year for implementation in 2014, and Whole Foods’ audit program through the Global Animal Partnership.

Addressing a question regarding the value of traceability and verifications in export markets, Gustafson said in some cases where verifications are required by the importing country, such as age verification in Japan or the Non-Hormone Treated Cattle (NHTC) program in Europe, producers have earned premiums on qualified cattle.

In some other cases, traceability could just become part of the cost of doing business. He notes that JBS at one time proposed a comprehensive traceability system to apply to beef the company exports to Japan. The process, they determined, would add 21 cents per pound to the cost of the exported beef, and their Japanese customers told them they would not pay that extra price. If JBS implemented the system, they would have to absorb the cost.

Cristain Barcan, who directs sustainability efforts at BASF and participated in an earlier panel on that topic, commented that traceability can play a role in improving beef sustainability by potentially reducing the need for huge beef recalls, and the resulting waste of valuable food and all the inputs used to create it.

Click here to watch the interview with Leann Saunders on the trends in verifying processes and providing more information to beef consumers.