19 September 2006

4 minute read

North America

Public concern over food safety has spawned a new niche market for cattle producers: age- and source-verified cattle. Florida cattle producers can earn substantial premiums by age- and source-verifying their calves, which qualifies beef from their animals for sale to Japan and other export markets, reports Kurt Shiver a Contributor for the Florida Department of Agriculture and Consumer Services .

One company helping ranchers take advantage of this opportunity is Okeechobee Livestock Market. Florida's largest livestock market is selling truckload lots of age- and source-verified cattle over the Internet through Producers Cattle Auction LLC, an online cattle auction company based in Mobile, Ala.

"Retailers are paying premiums for age- and source-verified cattle, and there's no need for the feed lots and the packers to be the only ones in the production chain that are getting them," said Todd Clemons, president of Okeechobee Livestock Market. "Our aim is to help ranchers take care of age and source verification on their end so they can keep more of the money in their own pockets. The cow/calf producer is the only person who can verify the age and source of feeder calves."

In December 2003, a single cow in Washington state tested positive for bovine spongiform encephalopathy, also known as mad cow disease. As a result, U.S. beef was banned by more than 40 countries, including Japan, the United States' most lucrative beef export market. Most of the markets that were closed have since reopened, but with restrictions on U.S. imports. Since most cases of BSE occur in cattle older than 30 months, many countries now require that cattle be less than 30 months old at time of slaughter. Japan, which ended its ban in July, accepts only beef from cattle 20 months old or younger.

"At this time, only the export markets require age and source verification," said Jim Austin, president and general manager of Producers Cattle Auction. "But once consumers find out what Japan is requiring, it is likely that the domestic beef trade will also demand more verification. Producers who are proactive and get involved in the verification process early should be positioning themselves well for the future."

Since April, Okeechobee Livestock Market has sold 25,000 head of cattle through online auctions, and 80 percent of those were age and source verified. The premiums paid for age- and source-verified calves are determined by supply and demand.

"If age and source verification becomes required by the government, then it will be the norm and there won't be extra money to be made," Clemons explained. "Of course, that hasn't happened yet. Right now, buyers are willing to pay a premium for these cattle because there are so few of them available."

Producers Cattle Auction makes verification easy and inexpensive with a simple, low-tech ear tag that costs about a dollar. The tag lists the birth date of the oldest calf in the sale lot, the premises identification number assigned to the ranch where the calves were born, and a contact phone number. The rancher creates a paper trail by documenting when he turned his bulls out and when the first and last calves in the group were born. He records the total number of calves born in the herd, the number of brood cows in the herd, and the number of acres he ran the cattle on.

"We have educated ourselves about exactly what is required by Japan and other export markets," Austin said. "There is a lot of misinformation out there. Ranchers don't need to use expensive electronic ID tags, and they don't need to pay to have their data stored in a commercial database. The requirements are really pretty simple, and ranchers don't have to spend a lot to meet them."

The premises identification number is assigned by the U.S. Department of Agriculture under the National Animal Identification System.

Rancher Woody Larson of Dixie Ranch in Okeechobee has been selling cattle through Producers Cattle Auction since 1993. He said he's pleased with the relative ease of the verification process.

"As long as we plan ahead and have tags, there's not much extra work," he said. "We do have to plan and keep records. But putting tags in the cattle is not that bad. We just do it along with our regular work."

Larson said he started age- and source-verifying his calves "to get ahead of the curve."

"I try to do what I think the customer will want," he said. "I think people want to know where their cattle come from, not just in Japan, but here at home too."

Perry Smith, owner of Perry Smith and Sons Ranch in Highlands County, has also begun age and source verifying. He's been selling cattle online for years. "I appreciate the research that has been done to make the verification process as simple as possible for producers," Smith said. "It's another job, but it's doable, and if we want to market our product, we've got to get with the program."

"Verification isn't mandatory yet," Larson added. "But if it gets to be, we'll be accustomed to it."

TheCattleSite news desk