Farm Foundation Traceability and Quality Assurance Roundtable November 19, 2003 Kansas City, MO National Animal ID: Value Traceability Opportunities Glenn

Farm FoundationTraceability and Quality Assurance Roundtable

November 19, 2003Kansas City, MO

National Animal ID:Value Traceability Opportunities

National Animal ID:Value Traceability Opportunities

Glenn SmithUSA Country Manager

AgInfoLink USA

Providing traceability systems and business solutions to the food supply chain to

• increase profitability, • promote food safety, and • ensure regulatory compliance.

A Member of the

Alliance

Page 3© Copyright 2003 AgInfoLink USA. All rights reserved.

Government& Regulators

Consumers

Food Chain

FoodOrigins Tools Answer Key QuestionsFoodOrigins Tools Answer Key Questions

How can we improve input/product consistency? How can we segregate defective and unaffected

product quickly and safely? How can this not be just another cost?

How can we improve input/product consistency? How can we segregate defective and unaffected

product quickly and safely? How can this not be just another cost?

Where did “it” come from? Where is “it” now? What processes has “it” been through? How do we contact all the players using “it” with X

number of hours?

Where did “it” come from? Where is “it” now? What processes has “it” been through? How do we contact all the players using “it” with X

number of hours?

“What is in my food?” Where did this food come from? Is it safe?

“What is in my food?” Where did this food come from? Is it safe?


Traceability has two facetsTraceability has two facets

Improved consistency

Higher yields

Lower cost per unit of production

Supply chain management

Justify brand claims – attribute x delivers result y

Lower cost new products

Value TraceabilityRegulatory Traceability

Food safety requirements

Food security “record keeping”

Process Certification – like organic

Trace-back / forward / middle

Environmental requirements


Can’t Tell Book By CoverCan’t Tell Book By Cover

Which Animal Produced Highest Profit?


Tale of Two SteersTale of Two Steers

Feeder Calf: $62.00/cwt $61.00/cwt

Feedlot Wt: 508 lbs 590 lbs

Days on Feed: 161 161

ADG: 4.3 lbs/day 2.4 lbs/day

Quality Grade: Choice minus Select minus

Net Return: $322.93 profit $15.56 loss

Want more of these cattle


Reduce VariationReduce Variation

1999 Grid Demonstration Project, Iowa State University

66 Pens Evaluated

Average Value Variation $358

Least Value

Variation$156

Greatest Value Variation $746


“On the average, I’m happy…”“On the average, I’m happy…”


"By using individual animal ID and creating a P&L for each animal, we were able to identify any cow whose calf didn't return at least a $15/head profit. If we eliminated these animals from the herd, we would have removed 13% of the herd but increased the average return per head by over $40."

- John Todd, Rollins Ranches, FL

Increase ReturnsIncrease Returns


“With individual animal data, I showed my stocker customer that eliminating the bottom 10% of poor performers would have lowered his cost of gain from $0.41/lbs to $0.36. This would have added $29 / head profit!”

-Mark Williams, Triple W, KY

Reduce CostsReduce Costs


By managing flour procurement based on these factors, bakery performance can improve by an estimated 1.4 – 2.0%

Yield ImprovementsYield Improvements


AgInfoLink – Linking the chainAgInfoLink – Linking the chain

Packer

Distributor

Retailer

Seed Stock

Cow Calf

Stocker

Feedlot

Processor

Capture and Share Info

Among Many Owners

Key is to LINK the chain – Bridge the Information Islands

Table


Products and ServicesProducts and Services

Data collection Data transfer Data warehousing Data sharing Reporting and analysis Data Benchmarking Predictive Analysis


Real Solutions, Real CustomersReal Solutions, Real Customers


AgInfoLink – Building private networksAgInfoLink – Building private networks



Backbone Support: Connecting NetworksBackbone Support: Connecting Networks


Regulatory Traceability: Supporting USDA / FDARegulatory Traceability: Supporting USDA / FDA

USDA / FDA charged with ensuring “rapid response” to ensure food safety by approving national systems and standards

This mandate is further driven by recent legislation which specifies new information requirements for individual supply chains Country Of Origin Labeling in the 2002 Farm Bill Bio-Terrorism Preparedness Act of 2002 National Animal ID pending

AgInfoLink private network tools enable supply chains to meet information requirements and support rapid response Private networks collect data from partners and can provide information

and reporting to meet both COOL and Bio-Terrorism requirements These private networks connect to related networks and overall regulatory

systems through secure, permission-granted protocols


Without traceability, there is no way to limit the scope of a product recall in the instance of contamination.

Recall It All

Traceability Provides SecurityTraceability Provides Security


Traceability delivers containmentTraceability delivers containment

When a contamination incident occurs, the ingredient history of the product is traced and the potentially contaminated source ingredients are isolated. Most of the system remains “safe.”

Selective Recall


Market AccessMarket Access

Japanese consumer consciousness toward traceability is relatively high, driven by StarLink GMO’s SnowBrand mislabeling Chinese spinach pesticide contamination

Higher end retailers have created “premium priced private labels” to restore confidence

Food Safety is considered a “private sector problem requiring private sector solutions.” Retailers (AEON/Jusco) developing voluntary traceability for beef Importers (Nippon Ham, Prima Ham) developing own traceability

requirements

Government finalizing requirements for domestic traceability for meats; some pushing for mandatory import traceability.


Japan: Private Label Retail ProgramsJapan: Private Label Retail Programs

Retailers in Japan are promoting premium-priced private label brands equated with quality, safety and trust based on origin

Source: Aeon/JUSCO


Japan: Private Label Retail ProgramsJapan: Private Label Retail Programs

Aeon/JUSCO has introduced a beef brand supported by a certificate of assurance from the Tasmanian governor and an endorsement by the Australian ambassador, which runs on in-store video ads. JUSCO stores aim to be top 10 global supermarket chain in 5 years.

Source: Aeon/JUSCO


Why Individual Livestock Identification and Traceability?Why Individual Livestock Identification and Traceability?

Value Traceability Systems Improved management Increased efficiencies Reduced waste Targeted Production Create new values and reduce costs

Regulatory Traceability Animal Disease Surveillance Market Access Rapid Response


Recommended High Level ArchitectureRecommended High Level Architecture

Data Service Providers

Beef Info Exchange

USDA

Other Custodians

National Animal ID- Location Data

National Animal ID- Ref Server

RequestApproved? Yes

Request from govtagency respondingto potential animal

health threat

NoRevise request

Trusted Custodian(e.g., BIE) (1 of n)

Daily populate nationalreference server with all

new AIN and TC server ID

Activate request toretrieve locationdata for specific

animals

Request from National IDto each Trusted Custodianwith info on specific animal

Trusted Custodiantransfers location information

on only requested animals

AnimalContainment

Report Created

Trusted Custodian(n of n)

12

3

4

56

7 8

Data ServiceProvider 1

Data ServiceProvider 2

Data ServiceProvider n

Can connectto Trusted Data

Custodian(“Push” recmd)

Number oftrusted datacustodians

who get govtapproval

User

User

User

a

b

c

d

Recursivedata

request

Other TrustedCustodians maychoose to “Push”


Key BIE Architectural ElementsKey BIE Architectural Elements

No data would populate government database until approved emergency

Ownership/location data would be pulled from Trusted Data Custodians (e.g., BIE) to government, never pushed

BIE would provide government database daily AIN list Relationship between Data Service Provider members of BIE to BIE

database could be either “push” or “pull”

Thank You!

AgInfoLink USA1860 Lefthand Circle, Suite GLongmont, CO 80501800.287.8787www.aginfolink.com

Glenn SmithUSA Country Manager

[email protected]

Documents

Farm Foundation Traceability and Quality Assurance Roundtable November 19, 2003 Kansas City, MO National Animal ID: Value Traceability Opportunities Glenn