Tuesday, January 24, 2006

Thoughts on National Animal Identification System - NAIS

I was watching a thing on TV a while back where an executive of one of the big agribusiness companies explained why the proposed NAIS is a wonderful idea. He was from Cargill if I recall correctly. This guy was going over the issue with a land grant University Ag department type. It was sort of like an infomercial. I don’t mean to pick on Cargill, there are several such companies and I presume they all have more or less the same point of view.

I learned a few things that I did not know previously. They pointed out that this whole scheme was in the works before mad cow disease and bird flu made the news and was not inspired by them. I had never heard of NAIS before mad cow got so much attention and without thinking about it assumed one was a response to the other.

They did of course mention terrorists and disease tracking but did not point out a single case where a real problem could have been prevented by such a system. Clearly this is a proposal to regulate commerce, not a health or law enforcement measure.

I can only paraphrase the conversation but I believe I got the basic idea. It went like this:

“It used to be that our food came from just a few miles away, now it can come from the other side of the country or even the other side of the planet. People want to know where there food comes from, how it was raised and what it was feed.”

These guys were talking were talking about beef of course. NAIS covers most other species as well but these guys didn’t discuss anything but beef.

I certainly agree that many people do want to know where their food comes from. Probably not most people, but still many people.

They mentioned that some large customers were offering a premium price to sellers who could source verify there product. McDonalds was the example they used. The problem was that they could not get all they wanted from producers who could source verify.

This is as far as this topic went. There was no speculation as to what the effect of offering a larger premium would have on supply.

The unspoken assumption that these guys were making is I think the same one made by the USDA and State government types, which is there is only one-way beef is produced.

Lots of small and not so small cow calf operators, scattered all over the country sell calves to big feed lots in Texas, Oklahoma, and Kansas. They supply the big meat packers, who in turn supply the big grocery store chains.

This is indeed how most beef is raised, but not anything like all of it. Here is (at least some) of where they are leaving out.

At the edges of most any city or suburb are lots of small holders. They have a few acres, typically between 10 and 50. Most of these small holders don’t make a living by farming but they do keep some stock. They do this for a number of reasons, not the least of which is that it gives them a BIG break on their property taxes. I know because I’m one of these small holders.

Finishing a calf does not require a PHD in agronomics. Just give it come grain along with the pasture forage and watch it get fat and slick. Some people prefer to finish them on grass. This is doable most of the year if the genetics are right. This cost more than Cargill spends per head of course, but not needing to truck the beast to Oklahoma and support the folks at the feedlot, packing plant and supermarket means the seller can make a profit by selling for less per pound than the supermarket charges. Most folks can’t store a whole beef of course but they can easily store a half or a split half. Home Depot and such places sell a lot of freezers, they don’t cost that much.

There is no need to spend a lot of time looking for customers. The last time I had more beef than buyers I just mentioned it to the old guy who owns the local feed store. He put a note on this bulletin board and it was quickly spoken for.

The consumer, this person who wants to know more about where their food comes from typically lives within a few miles. They often want to come by the place and look it over. The calf she wants to buy a portion of was born here. There’s its mama. Its daddy is the big bull across the road. His name is “Turbo” and if you feed him a loaf of bread he’ll let you scratch his head.

The butcher shop is close by. Locally there are three or four good ones. They are not USDA facilities they are state inspected. Most of the time they process deer for hunters and 4H animals from the county fair, but as long as deer season is over and the fair is not going on they are happy to butcher a steer any way you want. I have a trailer I can use to transport animals, but it is easy to hire it done. The customer picks it up at the butcher.

I don’t know how much of this goes on, but I do know that around here at least thousands of people do it. I would suggest that the big Ag companies and the USDA also have no idea how much of this goes on. No one measures this, and probably no one should, it is the free market at work and the business only of those involved. The consumer who cares about where their food comes from can find out, get a superior product, and spend less for it. The butcher and the feed store guy each make a few dollars, as does the small holder.

Cargill can’t compete with this, if for no other reason than they don’t even seem to be aware that it is going on. What the NAIS seems bound to do, intentionally or not, is to limit consumer choice and erode the competitive advantage of the small holder in favor of very large corporations and even larger government entities.

For this reason I believe it is a bad idea.


Walter Jeffries said...

Excellent writeup. Keep up the good fight.

Terre d'Esprit said...

Good post. I'm in a similar situation as you, and think the NAIS is just crazy! Keep writing those legislators...