Are Livestock Producers Willing to Pay for Traceability Programs?

Are Livestock Producers Willing to Pay for Traceability Programs?

A challenge with developing a cattle traceability system is the complexity of the beef supply chain. Photo credit Troy Walz.

The following is a summary of the webinar “Are Livestock Producers Willing to Pay for Traceability Programs?” given on February 4, 2021, as part of the Department of Agricultural Economics at the University of Nebraska-Lincoln Extension Farm and Ranch Management team’s weekly webinar series. The webinar can be accessed at

Why do we need “traceability”?

There are three primary reasons for disease traceability. First, human health is of primary importance. Livestock production exists because consumers buy meat products in food service and retail. A lack of trust in consumer food safety will dramatically decrease the demand for meat products financially hurting producers. Second, international trade is contingent on the United States being disease-free. In other words, if the United States wants to participate in international trade we must demonstrate to other countries that livestock raised and harvested do not contain disease. This containment process is being used in the United States to prevent diseases from other countries entering our supply chain. For example, foot-and-mouth disease (FMD) in Brazil led to trade restrictions between the US and Brazil only where the US only allowed certain products from disease-free zones in Brazil. Third, Prompt containment of disease outbreaks is critical to protect the health and well-being of livestock.

How does “traceability” work?

It is first important to note that traceability is not disease prevention but rather rapid disease containment. The most basic form of traceability has three primary functions: a) identify index case, b) traceback, and c) traceforward. Tracing backwards tells us where the disease came from and more importantly tracing foward tell us where the disease went. Combined, these help identify the index case(s) leading to containment of disease and treatment of animals.

How is traceability currently done in cattle?

Disease traceability in cattle is based on a collection of tools and documents. These tools include certificates of veterinary inspection (handwritten and electronic), program disease records (i.e. vaccination and testing forms), and point-of-sale’s (market records and brand inspection). The issue with current traceability efforts is that it is been historically dependent on metal ear tags which are prone to recording and transcription errors. Traceability is further complicated by the lack of compliance from producers that fail to report actual movement of cattle, particuarlly across state lines. Combined, this has led to a very slow response time in cattle disease traceability. For example, in a recent outbreak of tuburculocis in South Dakota that involved many herds across 12 states, it required government officials 10 months to trace back the disease back the original herd. While this is a slow response, it was aided by tuberculouis beina a slow moving disease. Had this been a disease with a shorter incubation period, the disease would have been wide spread long before the investifation was started.

USDA Animal Disease Traceability Goals (ADT)

The USDA animal disease traceability program has four primary goals:

  1. To advanced electronic sharing of data among federal and state animal health officials, veterinarians, and industry which includes the sharing of basic animal disease traceability data with the federal animal health events repository
  2. Use of electronic identification tags for animals requiring individual identification in order to make the transmission of data more efficient
  3. Enhance the ability to track animals from birth to slaughter through a system that allows tracing data points to be connected
  4. Elevate the discussion with states and industry to work toward a system where animal health certificates are electronically transmitted from private veterinarians to state animal health officials

In other words, the primary goal is to create a system to catch up to a disease outbreak quickly that limits the damage to both the domestic and international flow of commerce.

Is there a market for a voluntary traceability program?

Traceability systems function to meet a stated objective. One of these functions for live animal traceability systems is to quickly identify agricultural premises exposed to an animal disease so that the disease can be more effectively controlled or eradicated. Other objectives include supply chain management and marketing of credence attributes, which refers to a attribute that cannot be easily verified by the consumer (e.g., VAC-45 claim). This often misunderstood as some view having a nationally significant traceability system as the objective. It is unlikely that the cattle industry will realize a national significant tracdeability system unless there is consensus among those in the beef industry on traceability objectives and for what purpose it will be used.

A challenge with developing a cattle traceability system is the complexity of the beef supply chain. From birth to slaughter, cattle could change ownership several times, commingle, and travel long distances. It is easy to see how this makes cattle traceability more difficult. Designing a cattle traceability system requires understanding the benefits and costs of participating producers in each industry segment. The costs from participation vary across sectors of the industry, andt the large costs are realized by cow-calf. Research by James Mitchell, Glynn Tosnor, and Lee Schulz shows that the ability of cattle to garner premiums for traceability provides an additional benefit to participating cattle operations. These premiums would not exist if traceability were mandatory.  

How common are current technologies used for cattle traceability?

Adoption of technologies, specifically electronic identification devices (EID) that would facilitate traceability is currently limited but varies by species and along the supply chain. Cattle producers are more likely to use animal traceability compatible technologies in feedlot operations compared to cow-calf operations. Currently, 2.9 percent of cow-calf operations in the United States use electronic ear tags to monitor and record livestock information. Of the cattle that feedlots receive, larger feedlots are more likely to receive cattle that already have an EID tag. Eighty three percent of feedlots with greater then 8000+ one time head capacity receive cattle with an EID tag, compared to 36 percent of 1-499 head capacity feedlots. Regardless of EID tag use before entering feedlots, 45 percent of feedlots manage cattle with an individual animal identification record and 85.5 percent manage cattle with a group owner identification. The primary difference between these two management methods is the information detail that is available to producers. Individual identification is a more detailed version of group-id that would allow for producers to record animal health information if/when it occurs.

Frequently Asked Questions

Q: How well do cattle retain EID tags compared to traditional metal tags?
A: Metal tags do have better retention rates compared to EID tags. However, it is much more difficult to capture, monitor, and report animal characteristics using metal tags compared to EID tags. Some of the issues may be resolved by allowing tags to be placed in other locations besides the ear. High-frequency EID tags may offer one solution to this dilemma. Private companies recognize these issues and are continuing to modify tags to improve retention rates.

Q: How are premiums passed down to producers who are further away from livestock feeders?
A: Ideally, livestock will be paid for attributes regardless of where the livestock are raised. Further, there are is no existing literature that suggests that livestock farther away from feeding centers receive lower premiums compared to those that are closer.

Q: Who controls the information that is collected through traceability programs?
A: This greatly depends on the program in which the producer participates. Some programs and monitoring allow producers full access to the data. In others, producers have a lower amount of control. Understanding what data is and is not shared before adopting a traceability program is suggested.

Q: How many companies are approved to manufacture and distribute RFID tags?
A: Several companies are approved to manufacture and distribute RFID tags. Some of the larger companies include Y-Tex, Allflex, and Datamars. The USDA has been purchasing EID tags and distributing these for free to veterinarians to put them in livestock ears. The USDA does not officially endorse one ear tag company.

Q: Is there an industry-wide standard of what data is displayed when reading an EID tag?
A: Yes, there is an industry-standard. When a low-frequency RFID tag is scanned, a 15 digit code will generally appear beginning with 840 – the US assigned country code. These are commonly referred to as ‘840 tags’. This indicates to every owner that the animal was raised in the United States.

Q: Is the cost of EID use (tags + technology + software) greater than what livestock feeders are willing-to-pay for animals that can be traced?
A: This depends on the operations existing infrastructure before implementation. Tagging at birth is going to be cheaper than tagging at the time of marketing. Costs ($/hd.) decrease the more animals are being processed. For example, for cattle that are being tagged at birth, costs range between $3.36 per head for 5,000+ cattle to $4.12 per head for 1-49 head. Tagging at marketing raises costs $6.36 per head and $7.17 per head, respectively. Please see this report for a complete listing of additional costs for cattle operations to use EID tags.

Q: How are High-Frequency Tags applied?
A: Most of these are going to continue to be applied in the animal's ear in the form of a button or tag. Implanting a device into animals is problematic since that device has to be retrieved at slaughter for the carcass to be certified as “safe for human consumption”. Devices in carcasses that are not retrieved are not eligible for human consumption. This is one of the primary reasons why implants as a form of monitoring have not been widely used to monitor and trace animal health.  

Q: Are there any other traceability technology that is being discussed that would be an efficient substitute to monitor and trace animal health?
A: The focus has been on electronic identification, both high and low frequency. Photo recognition, biometric technology, and DNA are other technologies that have been proposed or in use. The accuracy, cost, and ability to use the technology at the speed of commerce are the primary reasons these technologies have not been widely adopted or implemented. As these, and other technologies, continue to improve, the market will adopt them to monitor animal health.