USDA’s Animal and Plant Health Inspection Service (APHIS) released its “Benefit-Cost Analysis of the National Animal Identification System” this week. The 442-page study provides a comprehensive assessment of benefits and costs of adopting a National Animal Identification System (NAIS). Access it at: animalid.aphis.usda.gov/nais/naislibrary/documents/
APHIS also published a 30-page overview report that provides a summary of the analysis’ key points. Access it at: animalid.aphis.usda.gov/nais/
The report estimates that a typical beef-cow operation would incur a $3.92/cow bookend adoption cost and a $4.22/cow full-tracing cost. A bookend system refers to identifying the animal individually or in group/lot fashion at its birth premises and then terminating the record at the packing plant when the animal is processed, with no intermittent tracing or recording of animal movement. A full tracing system refers to the bookend plus also tracing and recording movements of animals (individually or by group depending on species) through their lifetime as they change ownership.
Regarding other segments of the beef industry (i.e., backgrounders, feedlots, auction markets, and packers), the report estimates much smaller costs than the cow sector because these sectors’ main costs are replacing lost tags for a bookend and incurring scanning costs for full tracing.
Noteworthy findings include:
- Under NAIS, federal and state governments’ savings in connection with the administration of animal disease control and eradication programs are significant, but only part of the overall benefits.
- Economic benefits in both the domestic and international marketplace resulting from enhanced traceability may be greater than the cost savings realized during animal disease control and eradication efforts.
- For industry, the effect of not implementing some aspects of NAIS (maintaining the status quo) may result in significant losses – as great as $13.2 billion annually due to reduced export market access.
- Implementation of NAIS becomes more cost effective as participation levels increase and actually may not be economically viable at lower participation levels.
- The cattle industry cost represents 91.5% of the total cost of NAIS for the primary food animal species (cattle, sheep, swine, and poultry).
- ID tags and tagging cattle represent 75% of the cattle sector’s annual adoption cost.
- Tags and tagging costs vary among cattle producers with 50 head from $3.30 to $5.22/cow, depending on current ID practices.
- The total cost for implementing NAIS in the cattle sector is $175.9 million annually (at a 90% participation level). That cost is less than 0.5% of the retail value of U.S. beef products.
- The swine and poultry industries each have a lower cost because animal tracing requirements for these species require less infrastructure and often no individual ID devices.
- Traceability is becoming a global standard that will likely affect the ability of the U.S. to compete globally.