Global perspectives:Ranchers may need verification as U.S. beef expansion looks toward export markets
With domestic consumer demand relatively stable, any expansion in the beef industry will result in an oversupply of beef. The U.S. will need to find new export markets to sell this surplus.
For ranchers and feedlots, this may mean participating in verification programs to meet export requirements, so they can sell beef to certain countries outside the U.S.
Why verify
RaeMarie Knowles with Ranchers Connecting Ranches (RCR) explains the importance of verification to ranchers.
“We need to verify because the world is changing,” she explains, adding that, today, there is a lot of misinformation, and news travels faster than it ever did in the past.
“What is troubling is, people will hear something bad about beef, but they won’t follow through to see if it’s really true,” she says. “We do a terrible job of telling our story, but we are getting better. Our end goal should be to find ways to put a positive spin on beef, while creating more earning potential for beef producers.”
Consumer focused
Knowles sees verification programs becoming more important for both the domestic and export markets in the future.
“Consumers are interested in how animals are handled before harvest. They are more aware of animal handling now because of all the negative press,” she explains.
In fact, 67 percent of consumers think that, if a package of meat has a sticker that says USDA verified, it means there was an animal handling evaluation.
“Consumers don’t understand what the USDA sticker truly means,” she says.
However, another 67 percent admitted that they would pay extra for beef from operations that have verification programs in place for animal handling.
Feedlot value
Participation in verification programs and audits could also make ranchers and feeders more money, while producing healthier cattle. Knowles shares with producers an experience she had working at a feedlot.
“Producers could help save feeders money if the feeders knew for sure what vaccines calves had received,” she says. “We put $45 worth of vaccines in every calf when we received them because we didn’t know if they had the shot or not. If they were verified, it might save $25 in vaccination costs and possibly prevent the calf from getting the same shot he just received two weeks ago.”
Program options
The first USDA verification program was source and age verification, which was of significant importance after the first bovine spongiform encephalopathy incident, Knowles says.
“One of our biggest export markets, Japan, required all beef exported to their country to be under 21 months of age. At that time, producers were earning a $35- to $40-per-head premium just for being able to source and age verify their cattle. Since the age requirement changed to 30 months, the premium is currently only about $2.20 a head. There is still a little market for it,” she explains. “Verification provides us with a way to trace animals all the way through the supply chain.”
Several new programs have cropped up, depending on where the U.S. exports beef. Knowles says the European Union requires any beef from the U.S. to be from non-hormone treated cattle (NHTC). Under this program, cattle can never be implanted at any point from when they are a calf to harvest, she explains.
Heifers that are part of an AI and synchronization protocol cannot be put back in the program and sold as NHTC if they do not become pregnant. This program requires an annual audit and an inventory of drugs, like Lutalyse, must be kept.
“This program seemed daunting to producers at first,” Knowles recalls, “but it is actually a simple program.”
New requirements
Although the U.S. has exported beef to Saudia Arabia, the country has changed their requirements to meet their religious beliefs. Beef exported to Saudia Arabia cannot have been fed certain animal proteins, other than milk replacer or fish oil, Knowles shares. Beef tallow fed to cattle must be sourced from a certified renderer and must be blessed and certified, according to their religion.
“I believe JBS may have picked up this program, and there may be some incentive for producers to participate this fall,” she says. “This program has to start at the ranch and cannot be backdated.”
Producers should also consider participating in a verification program since the Chinese border has opened to U.S. beef, Knowles says.
“China has 200 million middle income families who would love to buy our beef,” she explains. “We could ship them all the beef we produce, and it still wouldn’t be enough. China could potentially be a big marketing opportunity for us.”
“Producers who are on the forefront of verification might make some good premiums in the future,” she notes.
Gayle Smith is a correspondent for the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
