Traceability Impacts on Future Trade Opportunities NIAA Annual Conference

Global Animal Health, Food Security & Trade Council

Paul Clayton – U.S. Meat Export Federation

March 27, 2012

Market Globalization

Trans Pacific PartnershipKORUS FTA

American cattlemen are finding homes on a new range — the steppes of Russia

How is Animal Traceability Used in How is Animal Traceability Used in International MarketsInternational Markets

RegulatoryRegulatory Animal Disease ControlAnimal Disease Control Recall CapabilitiesRecall Capabilities

Private StandardsPrivate Standards Animal WelfareAnimal Welfare Food SafetyFood Safety Product Quality and SpecificationsProduct Quality and Specifications SustainabilitySustainability

CommercialCommercial MarketingMarketing Production StandardsProduction Standards

World Standards World Trade Organization

Scientifically Based on Risk Assessment Not Trade Restrictive Importing country cannot enforce more rigorous standards for imported meat than those applied

to the domestic industry or use these standards as trade barriers.

Office International des Epizooties (OIE)

Chapter 4.1 General Principles on Identification and Traceability of Live Animals Chapter 4.2 Design And Implementation Of Identification Systems To Achieve Animal Traceability

Codex Committee on Food Import and Export Inspection and Certification Systems TRACEABILITY: The ability to trace the history application or location of an entity by means of

recorded identifications. (ISO 8402:1994)

Origin of food products and ingredients Product processing history Distribution and location of the product after delivery

TRACEABILITY/PRODUCT TRACING: The ability of a food business to identify for any food product under their control, where it came from, how it was changed by the producer (if appropriate) and where it was sent to. This is achieved by means of paper or electronic records, and implies a forwards and backwards tracing of the all relevant information regarding a food product. Records should be kept in a format allowing ready linkage and access by the appropriate authorities. (CCFICS)

Europe Passport1999: Mandated every EU

Member State maintain a database with records of all livestock and their movements

Global Data Synchronization Global Data Synchronization NetworkNetwork GS1-128 (UCC-UPC)GS1-128 (UCC-UPC)

Private StandardsPrivate Standards Major US manufacturers and retail competitors are Major US manufacturers and retail competitors are

moving towards establishing certification protocols moving towards establishing certification protocols that incorporate food safety (HACCP) and assurance that incorporate food safety (HACCP) and assurance (ISO) protocols including animal welfare standards. (ISO) protocols including animal welfare standards.

This suggests that the US public and private sectors This suggests that the US public and private sectors need to be exploring methods that effectively and need to be exploring methods that effectively and efficiently achieve traceability and assurance efficiently achieve traceability and assurance standards as a strategy for maintaining global market standards as a strategy for maintaining global market competitiveness. In this context, there needs to be competitiveness. In this context, there needs to be cooperative government to government interchange, in cooperative government to government interchange, in addition to business to business. addition to business to business.

Source: Farm Foundation, 2004, Food Traceability & Assurance in the Global Food System

Top Global Supermarket CompaniesTop Global Supermarket CompaniesCompanyCompany Stores Stores

OwnedOwnedSales Sales ($Bill.)($Bill.)

Countries of OperationCountries of Operation

Wal-Mart (US)Wal-Mart (US) 5,1645,164 244244 AR, BR, CA, CH, GR, JP, MX, SG, SK, AR, BR, CA, CH, GR, JP, MX, SG, SK, IK, VNIK, VN,, USUS

Carrefour (FR)Carrefour (FR) 10,70410,704 6565 AR, BL, BR, CL, CH, CO, CZ, DR, EG, AR, BL, BR, CL, CH, CO, CZ, DR, EG, FR, GC, IN, IT, JP, ML, MX, OM, PO, FR, GC, IN, IT, JP, ML, MX, OM, PO, PT, QT, RO, SG, SV, SK, SP, SW, TW, PT, QT, RO, SG, SV, SK, SP, SW, TW, TH, TU, TKTH, TU, TK,, USUS

Ahold (NE)Ahold (NE) 9,4079,407 5959 AR, BZ, CL, CR, CZ, DM, EC, ES, ET, AR, BZ, CL, CR, CZ, DM, EC, ES, ET, HN, IN, LT, LN, ML, NE, NC, NW, PG, HN, IN, LT, LN, ML, NE, NC, NW, PG, PR, PO, PT, SV, SP, SW, THPR, PO, PT, SV, SP, SW, TH,, USUS

Kroger (US)Kroger (US) 3,6673,667 5252 USUS

Metro (GR)Metro (GR) 2,4112,411 4949 ASAS, , BL, BU, CH, CR, CZ, DM, FR, GR, BL, BU, CH, CR, CZ, DM, FR, GR, GC, HU, ID, IT, JP, LX, MC. NE, PO, PT, GC, HU, ID, IT, JP, LX, MC. NE, PO, PT, RO, RU, SV, SP, SW, TU, UK, UR, VN RO, RU, SV, SP, SW, TU, UK, UR, VN

Tesco (UK)Tesco (UK) 2,2942,294 4040 CZ, HU, IR, ML, PO, SV, SK, TW, TH, CZ, HU, IR, ML, PO, SV, SK, TW, TH, UK,UK, USUS

Costco (US)Costco (US) 400400 3838 CA, JP, MX, SK, TW, UKCA, JP, MX, SK, TW, UK,, USUS

Albertsons (US)Albertsons (US) 1,6881,688 3636 USUS

Source: Farm Foundation, 2004, Food Traceability & Assurance in the Global Food System

Audit, Review and Compliance BranchAudit, Review and Compliance Branch

Provides services for Quality System Verification Programs

http://processverified.usda.gov/

ID/Traceability as a Trade Requirement Currently

USDA AMS PVP programs with an animal ID/Traceability component

Japan: Date Verified: cattle less then 21 months of age Must be determined utilizing physiological evaluation (A40)

or age verification through documentation

EU: Birth Origin for the PFEU and NHTC program

Hong Kong: Slaughter companies must maintain records that are sufficient to initiate a trace back to the previous location for all livestock included in the program.

Comparison of Cattle Population and Identification and Traceability

Beef Trading Partner Requirements

ECONOMIC ASSESSMENT OF EVOLVING RED MEAT EXPORT MARKET ACCESS REQUIREMENTS FOR TRACEABILITY OF LIVESTOCK AND MEAT, Market Economics LLC, Manhattan KS 66503 March 2011.

Beef Competitor's Advantages

ECONOMIC ASSESSMENT OF EVOLVING RED MEAT EXPORT MARKET ACCESS REQUIREMENTS FOR TRACEABILITY OF LIVESTOCK AND MEAT, Market Economics LLC, Manhattan KS 66503 March 2011.

Beef Opportunity Limits

Pork Trading Partner’s Requirements (DRAFT)

Country System Launch Date Mandatory National Individual orGroup ID

ID system Animal MovementTracking

Motivation

South Korea

National hog farm management system

2010 but Implementation in 2014

When implemented, yes

Group ID Tattoo or ear Notch

Each animal will beidentified bya specific 5-digit farmCode

Disease management;specificallyClassical Swine Fever

Mexico SINIGA http://www.siniiga.org.mx/

2008 Yes Group for Swine

Farmnumber and groupnumber;method notspecified

Yes, by meansof certificateof Mobilization

Disease management and animal management

Japan None N/A No N/A N/A N/A N/A

Data needed on: Brazil, Russia, Taiwan, Thailand, Vietnam and Philippines

Pork Competitors Advantages (DRAFT)

Country System Launch Date

Mandatory NationalIndividual orGroup ID

ID system Animal Movement Tracking Motivation

U.S. Identification of Swine in Interstatecommercehttp://edocket.access.gpo.gov/cfr_2011/janqtr/9cfr71.19.htm

1988 Yes Individual IDunless not Mixed andmoved as agroup, thengroup isacceptable

Ear tags,back tags,tattoo

Only if crossing state lines and notFor immediate slaughter. The IDhas to indicate a premise ID

Pseudorabies control And Brucellosis control

EU Each member has own system name,

but all must comply with the EU Directive:http://eurlex.europa.eu/LexUriServ/LexUriServ.o?uri=CELEX:32008L0071:EN:NOT

1991MostrecentRevision 2008

Yes Individual or group ID; must tie to premise

Ear tags or tattoos

Yes, each premise must maintain a record of animals on holding and Any animals shipped or receivedEntered into National database

Animal disease control, specifically Foot and Mouth Disease, CSF, And ASF

Canada Pig Trace Canadahttp://www.pigtrace.ca/index.php

2006 No, but FederalRegulationsare beingdrafted

Individual or group ID

Ear tags,tattoo, orRFID tag

Yes, identifies each premise Animal diseasemanagement, exportcompetitiveness

Chile Animal Health Traceability Programhttp://www.sag.cl/openDocs/asp/pagDefault.aspboton=Doc49&argInstanciaId=49&argCarpetaId=379&argTreeNodosAbiertos=(379)(49)&argTreeNodoActual=379&argTreeNodoSel=2

2005 No for swine Group ID if premise Decided toparticipate inthe program

Nothing Specifiedfor swine

Groups are identified as moving From locations to locations andwhy on a specific AnimalMovement form

For export markets

Japan

CHINA: Consumer Knowledge Consumers lack knowledge about food safety certificates

0%

5%

10%

15%

20%

25%

30%

Green food China top brand Quality safe No harm Inspection Exemption

Organic food

CHINA: Consumers on Food Safety:

0.5

11.5

2

venue appear price brand cert date

Most Important Factor in Determing Food Safety

Meat MilkVegetables FruitJuice

Source: Thomas Wahl, Junfei Bai, James Seale, Bryan Lohmar, Chinese Consumer Perceptions of the Determinants of Food Safety, 2011 (An FAS sponsored food consumption research project in China: findings of the study done in 6 major cities – BJ, Xi’an, NJ, ChD, XiaMen, Shenyang)

China

Taiwan

Thailand

South AmericaSouth America

Competitive Advertizing

To Trust!

Access to InformationAccess to Information

QR Codes

Summary Traceability can be a regulatory program

but there may be growth in private standards

Most trading partners have mandatory domestic traceability programsSome countries impose these requirements

on imports Most competitors have mandatory

programsSome competitors competitively advertize