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The Value of Genetic Information in a Whole-Chain Traceability System for Beef

  • Seyoum, Bruk Tefera
  • Adam, Brian D.
  • Ge, Candi

An animal traceability system can help control disease, improve food safety, improve production practices and provide enhanced marketing opportunities. However, attempts to establish a beef traceability system in the U.S. has faced resistance from many beef producers. Some of the reasons for resistance were cost, lack of confidentiality, and lack of accuracy of the system. Moreover, those who incurred the costs would not necessarily have received the benefits of such a system. This study evaluates the costs of a whole chain traceability system and compares them to the benefits of a traceability system in improving feed efficiency of cattle. We determine the cost saving from purchasing a higher proportion of high-­‐efficiency cattle using the information available in the whole chain traceability system. We also determine the benefits that should be shared among cow/calf, stocker and feedlot operators to motivate them to adopt such a system. Results show that while cow/calf producers would bear most of the cost of a traceability system, they would also receive the least benefits. To make participation in a traceability system profitable for cow-­‐calf producers, the results indicate that $20 per head additional income should be transferred to the cow/calf and stocker producers. This additional income transfer will cover the costs of whole chain traceability system and also provide additional profit that will motivate the cow/calf and stocker producers to participate in such a system. The feedlot also gains a net cost saving of $19 per head after transferring the additional income and paying its own traceability cost. Thus, by reducing feeding cost, a whole chain traceability system that provides information about the feeding efficiency of cattle can provide additional profit to the cow/calf, stocker and feedlot operators even after covering the costs of implementing the traceability system.

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File URL: http://purl.umn.edu/150458
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Paper provided by Agricultural and Applied Economics Association in its series 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. with number 150458.

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Date of creation: 2013
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Handle: RePEc:ags:aaea13:150458
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  1. Fritz, Melanie & Schiefer, Gerhard, 2009. "Tracking, tracing, and business process interests in food commodities: A multi-level decision complexity," International Journal of Production Economics, Elsevier, vol. 117(2), pages 317-329, February.
  2. Ortega, Carlos & Peel, Derrell S., 2010. "The Mexican Animal Identification System: Current Situation, Problems, and Potential," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 42(03), August.
  3. Lee, Ji Yong & Han, Doo Bong & Nayga Jr, Rodolfo M. & Lim, Song-Soo, 2011. "Valuing traceability of imported beef in Korea: an experimental auction approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), September.
  4. Schulz, Lee L. & Tonsor, Glynn T., 2010. "Cow-Calf Producer Perceptions Regarding Individual Animal Traceability," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 42(04), November.
  5. Loureiro, Maria L. & Umberger, Wendy J., 2004. "A Choice Experiment Model For Beef Attributes: What Consumer Preferences Tell Us," 2004 Annual meeting, August 1-4, Denver, CO 19931, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  6. Golan, Elise H. & Krissoff, Barry & Kuchler, Fred & Calvin, Linda & Nelson, Kenneth E. & Price, Gregory K., 2004. "Traceability In The U.S. Food Supply: Economic Theory And Industry Studies," Agricultural Economics Reports 33939, United States Department of Agriculture, Economic Research Service.
  7. Dickinson, David L. & Bailey, DeeVon, 2005. "Experimental Evidence on Willingness to Pay for Red Meat Traceability in the United States, Canada, the United Kingdom, and Japan," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(03), December.
  8. Carlberg, Jared G., 2010. "Development and Implementation of a Mandatory Animal Identification System: The Canadian Experience," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 42(03), August.
  9. Schroeder, Ted C. & Tonsor, Glynn T., 2012. "International cattle ID and traceability: Competitive implications for the US," Food Policy, Elsevier, vol. 37(1), pages 31-40.
  10. Moises A. Resende-Filho & Brian L. Buhr, 2008. "A Principal-Agent Model for Evaluating the Economic Value of a Traceability System: A Case Study with Injection-site Lesion Control in Fed Cattle," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(4), pages 1091-1102.
  11. Dustin L. Pendell & Gary W. Brester & Ted C. Schroeder & Kevin C. Dhuyvetter & Glynn T. Tonsor, 2010. "Animal Identification and Tracing in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(4), pages 927-940.
  12. Resende Filho, Moises de Andrade & Buhr, Brian L., 2006. "Economic Evidence of Willingness to Pay for the National Animal Identification System in the US," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25342, International Association of Agricultural Economists.
  13. Resende-Filho, Moises & Buhr, Brian, 2006. "A Principal-Agent Model for Evaluating the Economic Value of a Beef Traceability System: A Case Study with Injection-site Lesions Control in Fed Cattle," MPRA Paper 467, University Library of Munich, Germany.
  14. Golan, Elise H. & Krissoff, Barry & Kuchler, Fred, 2004. "Food Traceability: One Ingredient in a Safe and Efficient Food Supply," Amber Waves, United States Department of Agriculture, Economic Research Service, April.
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