Study shows NAIS will pay through increased beef exports
If the U.S. beef industry could return to the level of beef exports that were in place before 2003, the proposed animal identification system could be fully paid for.
That was one of the “suprising” findings of a research team member who was part of an APHIS year-long project that examined the effects of the National Animal Identification System (NAIS) on the livestock industry.
“Even though producers will incur higher costs at every level of the market, I was surprised to learn that if the beef industry was able to increase beef exports to pre-2003 levels, we could pay for the entire animal ID system,” said Gary Brester, a professor in the Department of Agricultural Economics and Economics at Montana State University and a member of the research team.
Brester said he discovered if NAIS “allows us to recover these (export) markets, the increase in beef demand and cattle prices would offset the costs of NAIS all the way down to the cow/calf level. I found that very remarkable and was a little surprised.”
The 400-page research project was recently released to the public. Brester said he became involved in the project when APHIS solicited competitive grant research proposals for the project.
“Dr. Ted Schroeder of Kansas State University assembled a team of agricultural economists, animal scientists, and meat scientists from Kansas State University, Colorado State University, Montana State University, and Michigan State University. We submitted the winning grant proposal,” he said.
APHIS had a variety of specific issues that the KSU team was required to ad-dress.
However, the team also spent considerable time and effort “thinking about how NAIS affects different species and sizes of operations as well as the multiple vertical sectors across a variety of adoption scenarios,” Brester said.
Consequently, the team decided to estimate the impacts of three types of NAIS programs based upon 30 percent, 50 percent, 70 percent, and 90 percent adoption levels.
The research project considered the costs and potential benefits of NAIS on the beef, pork, poultry, sheep, and equine industries.
For the beef industry, impacts on cow/calf producers, backgroun-ders, feedlots, auction markets, packers, re-tailers and consumers were estimated.
In addition, the im-pacts across different sized operations were considered.
“As a university professor and as someone who does not have a vested interest in the NAIS program, it is inappropriate for me to be an advocate for either side of this issue,” said Brester.
He said his role was “to provide the best, unbiased research information possible so that the industry can make informed decisions.”
“I am opposed to uninformed decision-making at any level which simply advances a bias without considering impacts on the entire industry,” he added.
Brester talked about his approach to the research project.
“My approach in teaching and research is that we should consider difficult decisions from an analytical, unbiased, economic perspective. I don't have an axe to grind or a pulpit to pound, and I don't want one either. That is one of the benefits of maintaining a high-quality university system - the industry has access to unbiased research,” he said.
After the research project was completed, Brester explained it was sent out for review to several reputable, independent economists and scientists to get additional, non-biased feedback.
That input was used to help refine the report, which was released to the public in mid-May.
“Whenever we conduct this type of research, one always has to stop and ask, ‘does that make any sense?' In fact, the entire team debated this and many other results throughout the project,” he said. “That is the value of working with a group of highly skilled researchers. But, the more we researched the issues and received feedback from more than 100 industry participants, we began to realize that there can be many benefits from a NAIS system.”
Brester emphasized the importance of both domestic and export markets for livestock producers.
“Export markets are important,” he said. “But in addition, we found that the costs of NAIS could also be offset if the adoption of such a system increased the domestic demand for beef by about 1 percent. Of course, we don't know if export markets would be more accessible if we adopt NAIS, or if domestic demand would increase by 1 percent, but export and domestic consumers are telling the industry that this is something they want. We might argue that such a system really has little to do with food safety, but consumers are king. If they want something from the beef industry, it is in the beef industry's best interest to deliver it. If we don't, consumers will find what they want elsewhere. If that happens, the beef industry will shrink.”
Knowing that producers have concerns about the cost of NAIS and its invasion of privacy, Brester said their concerns are absolutely “legitimate.”
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