A LONG-awaited cost-benefit analysis on the proposed National Animal Identification System shows that if the United States industry implements the system, it could prevent up to $US13.2 billion in export market losses as world markets increasingly demand traceability, even without an underlying animal disease crisis.
The US Department of Agriculture report states: "The international marketplace increasingly expects an animal identification and tracing system to be the norm for exporting countries and that the US currently lags behind major competitors and its major markets in providing traceability."
The analysis concludes: "Countries failing to conform to this expectation will lose export market access ... even in the absence of a major market or animal disease event."
Despite that admonition in the more than 400-page report, it is noted that protecting export trade was not one of the original selling points for NAIS.
USDA has justified NAIS, which is unpopular with many livestock producers, as a system needed to protect the nation's domestic livestock industry and to manage quarantines in the event of a widespread animal disease outbreak.
With that in mind, the study conducted simulations to analyse the benefits of NAIS in a hypothetical foot and mouth disease (FMD) outbreak.
It assessed NAIS's role in delineating the disease to a manageable "region" and to a "compartment" such as a biosecure, confined operation.
It then analysed the effect a national identification system would have on restoring market access under those containment strategies.
The study concluded that "animal identification, movement tracking and inflow and outflow documentation are essential in demonstrating whether an auditable biosecurity management system is present".
The study evaluated the potential costs of export market closures due to FMD (or any other highly contagious animal disease).
It looked at four projected levels of participation in the NAIS program.
Assuming that 90 per cent of US producers participate, there would be a $US 4.5 billion reduction in losses compared to a scenario with only 30pc participation.
Looking at costs
The study did cost assessments for the cattle, swine, sheep, poultry and horse industries under three scenarios:
- A system that only identifies premises;
- A so-called "bookend" system that identifies animals at birth and at the end of their life, with no intermediate tracking; and
- A system that identifies animals and tracks them if they are commingled with animals from other sources.
For the cattle industry (beef and dairy), the report's authors assumed that a radio frequency identification tag system would be used. They estimated costs based both on 90pc and 100pc participations rates.
The cost per beef cow ranged "from a low of $US2.48 per head for the largest operation currently tagging to a high of $US7.17 per head for the smallest operation not currently tagging," according to the report.
That compared to dairy cow costs ranging from $2.53 to $5.84.
Total sector costs ranged from $2.916 million for 90pc participation in a system that only identified premises, to $209m for 100pc participation in a full traceability system for the cattle industry, including some one-time costs for premises identification.
Annual costs for the high-end program, which was estimated to average $US5.97 per animal, broke out as follows:
- $139.7m for the beef industry, equal to an average of $4.91 per each animal marketed;
- $31.4m for the dairy industry, equal to $6.21 per animal;
- $12m for backgrounders, equal to 71 cents per animal;
- $13.5m for feedlots, equal to 51 cents per animal;
- $8.7m for auction yards, equal to 23 cents per animal, and
- $3.467 million for packing plants, equal to 10 cents per animal.
Pres sure from Congress
House agricultural appropriations subcommittee chairwoman Rosa DeLauro (D., Conn.) told Agriculture Secretary Tom Vilsack in March that "the clock is ticking" on the NAIS program (Feedstuffs, April 6).
At that time, DeLauro expressed impatience about the delay in publishing the cost-benefit analysis that now is out.
Additionally, she charged that Congress "has nothing to show" for the more than $120 million investment it has made in NAIS so far.
DeLauro and House Agriculture Committee chairman Collin Peterson (D., Minn.) have said they prefer a mandatory program because the voluntary program has yet to garner the participation expected despite millions of taxpayer dollars spent on it.
Vilsack asked for more time to meet with the livestock community to try to work out a program that would have widespread participation.
He has hosted a roundtable with livestock interests in Washington, D.C., and just announced a series of NAIS listening sessions to be held around the country.
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