PROGRESSIVE PRODUCER

PROGRESSIVE PRODUCERTAKING ACTIONBIRTH TO BURGER BLOCK CHAIN, AN EMERGING TECHNOLOGY, COULD ADVANCE MARKETING BEEF

by Sheila Barry, University of California Cooperative Extension Livestock and Natural Resources Advisor, Bay Area

Few consumers could say that they have purchased beef that was locally raised or even raised in California. The article Ranch-to-Fork: The Connection of California’s rangelands to Beef is not Direct but should be Valued, found in the October 2020 issue of the California Cattleman, explored current Bureau of Livestock Identification data, producer perceptions and ended with potential future marketing shifts. One of these potential market shifts is the emerging technology of “blockchain” that has the potential to advance marketing beef ranch-to-fork.

In 2016, McDonald's accomplished an industry first by tracking and verifying that 8,967 head of Canadian cattle were produced with sustainable practices. Sustainability practices verified included maintaining well-managed grazing systems, implementing management plans to protect water and waterways, adhering to animal welfare practices and supporting local rural economies. Although it was a relatively small pilot project—the number of head tracked represented only a single day supply to McDonald’s restaurants in Canada—it demonstrated proof of concept.

The metrics for sustainability were defined for the local region with input from beef producers and new data technologies supported the tracking of cattle from birth to burger. The sustainable beef tracking program continues in Canada, and with the first million pounds of beef sold, all producers in the supply chain (ranchers and feeders) have received premiums of up to $20 per head. However, additional production costs associated with participation in the program are not known.

Tracking beef through the entire production system (e.g., from ranch to fork) is possible when individual animal identification is coupled with new data technologies. Blockchain, developed as a ledger for bitcoin, connects transactions with timestamps and transaction data to keep data linked. Its creation of a timedata chain allows for information like where and when an animal was born, how it was fed, what vaccines it received and where and when it was transported to be tracked with the animal.

Blockchain’s tracking doesn’t need to be limited to metrics of sustainability; it can track different attributes of cattle’s care and health or grazing land stewardship that are important to producers or valued by consumers. Several other beef production projects have been working to demonstrate the ability of this technology to provide transparency and transfer 14 California Cattleman November 2020 information through beef’s complex production systems.

One project was conducted by JD.com, a major Chinese e-commerce site. This project was focused on restoring consumer confidence in food safety and providing transparency about the origin of meat products. Chinese consumers lost confidence in 2008 in the safety of animal agricultural products when six babies died after they consumed milk tainted with the chemical, melamine. In May 2017, JD.com used blockchain to track meat from beef producers in Inner Mongolia to consumers in the Chinese cities of Beijing, Shanghai and Guangzhou. Consumers were provided with information, such as the cow’s breed, when it was slaughtered and what pathogens it was tested for.

An additional project was launched by JD.com in March 2018 when it began working with Beefledger, a blockchain company to track the production of Angusbeef sourced from farms in Australia. The blockchain data in this case is meant to provide assurance to customers that only Angus beef from Australia is sold under a specific label. Beefledger sees a growing demand for Australian-labeled beef in China because of the prevalence of labeling fraud; for every 10 kilograms of beef sold in China, 1 kilogram is not what it claims to be. It is either not from the country it claims to be from, it’s not the cut as labeled or it is not even beef, but rather duck, horse or pork.

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Other aspects of beef production are also being tracked and shared with consumers with blockchain. In Fall 2019, Wong, a supermarket chain in Peru partnered with SUKU by Citizens Reserve, a California-based company in Santa Clara County to use blockchain to cover all meat products sold in 20 of their stores. The products are stamped with SUKU meaning that the product has been tracked from pasture to shelf, but the blockchain platform allows customers to view the animal and meat’s history, including vaccinations or other animal health treatments.

Also, in 2019, BeefChain, a company in Wyoming began selling product with birth to steak data. BeefChain is the first blockchain company to receive certification from the United States Department of Agriculture (USDA) as a Process Verified Program (PVP). The USDA certification allows BeefChain to audit ranches and feedlots for compliance with value-added programs. The PVP includes standard USDA programs like age and source verified and natural (not treated with any hormones or antibiotics), but BeefChain also has a program that is identifying and tracking calves born on Wyoming grazing lands through the entire production system. A calf born in Wyoming and enrolled in the program can be finished in a feedyard in Washington or Nebraska and remain in the program. BeefChain’s goal is to increase the value of cattle for ranchers by providing a digital identity (RFID tag or label) and traceability (blockchain) from the grazing lands to consumer.

Although the technology supports traceability through the entire production system, the technology doesn’t overcome other challenges with processing and marketing beef. Neither domestic markets for source-labeled beef have developed, nor is there real demand for all parts of a carcass at a premium price. Initial sales of Wyominglabeled beef have gone to five-star dining establishments in Taipai, Taiwan with customers only receiving the best cuts of beef. There is growing demand for western beef in Asia, where consumers are willing to pay premiums. One of the Wyoming ranchers participating in BeefChain said, “If we can verify where our cattle came from and the processes they have undergone in their lives, there is a huge premium to be made. Our goal is to bring home probably $150-$200 per head to enrolled producers.”

Meanwhile as premium markets are both identified and developed both in the U.S. and internationally, the value of traceability via blockchain is being recognized by at least one of the United States’s largest food sellers, Walmart. Walmart found that they could reduce tracking time in a recall from nearly one week to 2.5 seconds using blockchain. According to BeefChain program Manager, Tyler Lindholm, “As soon as they [Walmart Food Trust] found out how quick they could do it; they immediately told all their producers, they don’t really have a choice and they need to transition immediately to their new system. So that was good for blockchain, that’s good for food safety and good for traceability.”

Consumers are driving the development of traceability and transparency provided by the use of blockchain in the beef production system. However, producers may also benefit by having access to performance data through the supply chain. For example, the system could allow more producers to have access to feedlot production data and carcass data that can allow them to improve genetic selection of females and herd sires.

Many U.S. beef producers are likely to be driven into a traceability program by meat packers who may offer a premium so they can meet consumer demands and reduce their risk associated with food borne illness. While blockchain has the potential to improve consumer confidence by connecting consumers with beef raised on California’s ranches, will consumers be willing to pay more?