If you think new-age livestock ID and the auction market method mix like oil and water, take a look at what's shaking out in California. Sitting a stone's throw from the Pacific Ocean is 101 Livestock Market, Inc., an average-sized livestock auction whose owners have thrown their hats into the electronic ID (EID) ring.
“It just makes sense to try and add value to what ranchers are producing — and we're doing it with source-verified (SV) cattle using EID,” says Jim Warren, Aromas, CA, 101 Livestock's principal owner. “If in doing so it means stepping out of our comfort zone and having to work a little harder while learning something new, then so be it.”
The movement toward EID started several years ago when Warren outlined a vaccination protocol for selling local cattle.
“It took some convincing to get ranchers into that program,” Warren says. “But it didn't take long to prove its worth.”
As time passed though, Warren saw he had to take selling preconditioned calves to another level. So, three years ago, he gave prospective consigners visual ear tags with numbers linked to their ranches.
He sold nearly 20,000 pre-vaccinated SV cattle the first year. The next year, he charged $1/ear tag and numbers dropped 25%. Last year, sales of such cattle rebounded to 20,000 head.
Along the way though, Warren noticed 101's consigners, through no fault of their own, weren't receiving the hoped-for performance data from feeders or packers. Not helping matters was the cumbersome task of manually recording ear tag numbers as cattle changed hands.
Last fall, Warren began learning about radio-frequency ID (RFID) technology and recognized EID provided the best bet for connecting cattle to their source. Looking down the road, he knew livestock producers would someday be required to meet the demands of USDA's proposed National Animal Identification System (NAIS)
“We knew it was coming and it was best to get out ahead of the game,” Warren says.
No slowing down
While kinks still remain to be ironed out of the physical EID set-up, Warren challenges skeptics who say EID isn't practical in a sales yard.
“It doesn't slow us down a bit,” he says. “Everything we do here is geared to this technology. We can see it has the potential to make our overall operation run more efficiently.”
Warren and his team installed Allflex® RFID panel “readers” connected to 101's Sale Time Systems® livestock auction management software. The exit alley was split into a double alley, each with its own reader to scan ear tags as the animals leave the ring. The panels read the ear tag Warren provides, as well as similar tags from other manufacturers.
“As each lot is sold, EID numbers are read into the closeout software,” says Brian Rainey, Allflex USA western regional sales representative, Visalia, CA. The key is getting cattle to pass the readers in single file, a design goal on which 101 and Allflex are collaborating.
“Actually, the faster the cattle go by the readers, the better,” Rainey says. “You get signal ‘collision’ when multiple tags enter the read field at one time.”
Rainey emphasizes the only data the ear tags carry is a number. He and Warren readily admit 101's EID system is evolving and isn't without glitches. He grants that over time, as EID technology changes, Warren will likely upgrade the system.
“Reading ability is just a matter of adapting the readers for each auction's working environment,” Rainey adds.
Warren estimates 35,000 of the 40,000 head of cattle sold at 101 this year will be SV and EID-tag equipped.
Making it worthwhile
It's no secret consigners at 101 Livestock are capturing price premiums for nearly every class of cattle, says Erin Lacy, California Cattlemen's Association director of public relations. “The availability of SV cattle is certainly important to the repeat buyers at 101 Livestock.”
She says sellers in 101's SV program are capturing an average $18/head premium for their $2.50-$3/head investment in EID tags. Recently, “choice” 500- to 550-lb. commercial steers brought $122-$130/cwt., compared to SV steers at $130-$138. Meanwhile, 600- to 700-lb. commercial steers captured $110-$115, while their SV mates brought $118-$132; And 800- to 900-lb. steers garnered a $2/cwt. premium.
“Prices are always a moving target, so we try to be conservative in reporting EID premiums and the benefits,” Warren cautions. “But, the reality is it's far exceeded what we expected.”
Lacy says a California beef packer recently sealed a deal with McDonald's for EID source-verified cull cows. Buyers for those cows have been in the seats at 101 and are currently paying a $20/head bonus for culls, which Warren passes to the producer.
About 75% of 101 Livestock's SV cull cows end up with McDonald's, with the rest going elsewhere, “because someone outbids McDonald's buyers,” Warren notes.