What is in this article?:
The beef industry may have had a commodity mindset in the good old days, but things are definitely different today. New markets dictate more progressive management and record keeping practices from producers, while they add opportunities for practitioners to engage with clients.
Documentation and Verification
Over the past six years, both domestic and international consumers have demanded specific management practices from U.S. beef producers, and born from this have been the marketing programs for age and source verification (ASV), natural, and non-hormone treated cattle (NHTC). Packers have continued to pay premiums for cattle that are age- and source-verified by a third party and qualify for export. Age and source verification is carried out through a USDA-approved program, including a Process Verified Program (PVP) or Quality Systems Assessment (QSA).
A PVP and QSA outlines the policies and procedures that producers need to follow for age and source verification, thus dictating the necessary management and documentation involved. These animals must be traceable to the ranch of origin and meet age restrictions (under 21 months for Japan, as of now). ASV is becoming a feature for domestic branded programs as well.
To age and source verify cattle, a producer is required to go through a USDA-approved third-party verification program. Calving records must be maintained and produced for verification, and oftentimes it’s as simple as documentation of the first calf born recorded in a calving book.
Annual enrollment, a short training process, and phone interview to review records and production practices typically complete the process. All enrolled cattle are tagged with RFID tags prior to shipment from ranch of origin. If cattle are commingled with others, additional forms of identification may be needed. Paperwork and auditing for age and source programs across the industry are similar, but programs may slightly differ, especially if they include other components.
For example, AngusSource® adds a genetic component. It documents source, group age and a minimum of 50 percent Angus genetics, so all calves must be sired by a registered Angus bull, enrolled by the ranch of origin, and have a known group age of month, day and year. The premiums received for the additional management and documentation requirements of these programs are based on supply and demand.
But more recent research conducted by the Kansas State study indicates that age- and source-verification premiums have continued to hold since 2005, when Superior Livestock Auction began featuring this notation in lot descriptions. (See Figure 1.) Furthermore, nearly half of all calves sold by Superior in 2010 were verified for age and source.
Value-added marketing practices typically require documentation on the part of producers and, in many instances, it’s for management practices already being carried out on a respective ranch. For example, Never Ever 3 (NE3) and NHTC also require verification through a USDA-approved program, such as Verified Beef in Bozeman, Mont., which also verifies grass-fed cattle. Both NHTC and NE3 are initiated with on-site training audits, and require records for age and source, plus additional detailed documentation to prove their production processes.
Cattle verified for USDA NHTC qualify for export to the European Union, whereas cattle verified as natural meet the requirements for USDA NeverEver 3, making them eligible for all-natural marketing claims. Oftentimes if an animal falls out of one program, it may still qualify for another.
While programs like these verify production processes, IMI Global Inc., a third-party verifier based in Castle Rock, Colo., also verifies programs targeted at sustainability and animal welfare, the latter which can be additive. Its Verified Green™ promotes those producers participating in sustainable agriculture and environmental practices, while its Humane Handling Standard, developed by the National Cattlemen’s Beef Association and world-renowned animal handling specialist Dr. Temple Grandin, was put into play in response to consumer concerns regarding animal welfare.
Marketing options abound in today’s beef industry, and multiple programs require documentation and certification, whether through legal affidavits, audits, or third-party verification. While they require new management, new markets also offer producers, as well as their veterinarians, new opportunities in today’s progressive, consumer-minded beef business.
For Further Reference:
- USDA Agricultural Marketing Service, processverified.usda.gov
- Agricultural Marketing Resource Center, www.agmrc.org
- The Effect of Value-Added Management on Calf Prices at Superior Livestock Auction Video Markets, ageconsearch.umn.edu
- National Beef® Packing, www.nationalbeef.com/pscbrandedbeefproducts
- Verified Beef, www.verifiedbeef.net
- IMI Global, Inc., www.imiglobal.com
- Understand industry marketing structure; where’s the value?
- What are consumer wants and needs?
- What are feeder calf buyer wants and needs?
- The components and value of certified vs. non-certified preconditioning programs
- What are the value-added programs, as a whole? What are their requirements and differences, especially with natural programs?
- Health and age requirements, especially for natural and export programs?
- Record keeping requirements, paperwork involved, especially for NHTC and NE3 programs. Can you assist producers with this paper trail?