Sterling Solutions of Bozeman marketing livestock tracking system

While Montana State University is hoping its livestock-tracking program becomes the model for a national system, a private Bozeman company says it already has a traceability system for cattle in place.

John Morris, president of Sterling Solutions, said Friday his company has a verification system certified by the U.S. Department of Agriculture.

By RON TSCHIDA Chronicle Staff Writer

http://bozemandailychronicle.com/articles/2004/03/14/news/sterlingbzbigs.txt

"We have conducted trials and the USDA has physically audited records and tracked cattle from the ranch to the feedlots to the packer," Morris said. "They literally went to a serial number on a box and said, show me where this came from, and we’ve done that."

Morris and several partners started the company, which is incorporated in Oregon, about a year ago in response to a provision in the 2002 farm bill called "country of origin labeling," or COOL.

COOL later stalled in congressional debate. But meanwhile, mad cow disease was discovered in a Canadian cow last spring and a Washington state dairy cow in December. That ignited strong interest in traceability.

While government can mandate requirements like COOL, solutions should come from the free market, Morris said.

It appears there’s going to be quite a bit of competition in the new field: A number of publicly funded universities around the country and a number of private companies are gearing up to provide "source verification" services.

Rather than signing up ranchers for its tracking system, Sterling hopes to bring the system to market "top-down."

Major restaurant chains and food companies like McDonald’s and Albertson’s could see the value in selling "source verified" beef. Then they’d demand that from packers, who would in turn recruit ranchers to supply it.

That way, Morris said, the marketers would pay the cost of tracking the meat.

Sterling’s system relies on a tamper-proof metal ear tag that costs less than 5 cents, plus a paper trail that follows each animal from birth to meat locker.

Each time the animal is sold it must be accompanied by a producer’s affidavit and a certificate of compliance.

"That’s kind of like its passport," Morris said.

Kelly Munsee, with Magic Valley Feeders in Murtaugh, Idaho, helped test the Sterling system.

"Identification and traceability is a good thing," Munsee said. "It’s probably something that’s going to happen."

His only concern is the liability ranchers and feedlots might have if their good beef gets mixed in with someone else’s diseased meat in a big batch of ground meat.

It could take months and lots of lawyers’ bills before a producer was cleared.

Munsee said it’d be great if marketers or consumers shouldered the cost for the tracking system, but he doubts that’s the way it’ll fall.

"If it’s going to be from birth on it’s going to fall on the rancher," Munsee said.

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Source verification simplified

By John Maday

http://www.drovers.com/news_editorial.asp?pgID=676&ed_id=2498

Some terms you will hear with increasing frequency in coming months are “animal ID,” “traceability,” “source verification” and “process verification.” But as emphasis on these processes grows, so can the confusion level among producers looking at the array of products, services and systems becoming available.

Producers and later participants in the beef supply chain face the quandary of selecting programs to fit their growing need for documentation. At the same time, companies and organi-zations offering these services seek to differentiate themselves and demonstrate that their programs work. One way to do so is through the USDA Process Verification Program, which the agency says “provides suppliers opportunity to assure customers of their ability to provide consistent quality products or services.”

Just a handful of beef-industry programs have earned certification as USDA Process Verified suppliers, and the latest of these is Sterling Solutions LLC, an Affiliate of Sterling Marketing Inc. of Vale, Ore. Sterling Solutions received USDA approval on Jan. 7, 2004, to begin implementing their Process Verified Beef Source Identification and Traceability Program.

Company founders John Nalivka, John Morse and Russ Turner say development of the Sterling Solutions Program began in late 2002 and was audited by USDA through the second half of 2003 in order to comply with the rigid quality-control standards of the USDA Process Verification Program. To operate an approved USDA Process Verified Program, companies must submit documented quality-management systems to the Livestock and Seed Program, Audit Review and Compliance (ARC) Branch, and successfully pass an onsite audit according to ARC Instructions. The development and approval process, Mr. Nalivka says, has been worthwhile as participation in the USDA program adds credibility and ongoing quality control, and will allow participants to market cattle and beef as “USDA Process Verified.”

International appeal

The USDA Process Verified Program uses ISO 9000 standards to ensure consistent auditing practices and promote international recognition of audit results.

Conformance to international standards will be increasingly important for access to the beef export market, says John Morse of Bozeman, Mont., one of the partners and developers of the Sterling program. Mr. Morse gained interest and experience in source verification as president of a large, Japanese-owned ranching operation in Montana through the 1990s. The ranch raised cattle exclusively for export to Japan and adopted individual animal ID and source verification as early as 1989.

“We have aimed for a market-driven, pull-through approach,” Mr. Morse says. End-users could include exporters who increasingly need source and process verification for market access. Domestic meat companies also want this kind of information. This system is designed to meet current requirements for export programs and country-of-origin labeling, and can add specific process-verification standards as needed by end-users.

Keep it simple
Mr. Nalivka and Mr. Morse stress that a major goal of the program is to keep the system simple and practical. Technology is a means to an end. The program is designed to work with the metal ear-tags used in the Brucellosis program, which are simple, durable and inexpensive. Participants can use plastic visual ear tags or electronic radio-frequency identification (RFID) tags if they choose. “The metal tags cost just 7 cents, compared with about $1.25 for plastic tags and up to $3 for RFID tags,” Mr. Nalivka says. Sterling Solutions has a program with Allflex for visual and RFID tags and uses metal tags made by Ketchum Manufacturing.

The program focuses on premises ID. The standards and numbering system are similar to those proposed in the USAIP and could be adapted to conform once the USAIP is finalized. Mr. Morse says that in this program, producers control the data and decide what to share with other participants. The only public information is the premises ID, which consists of six letters. The first two are the state postal code, the next three are a unique ranch identifier and the last letter indicates the animal’s year of birth.

Once an operation completes the audit and training, Sterling issues identification numbers and the herd becomes certified as source verifiable. Service charges include an initial setup fee, then 1⁄2 cent per pound or 50 cents per hundredweight at sale weight for cattle marketed through the source-verification program. The same fees apply to producers selling calves, yearlings or finished cattle, and to packers selling beef.

When a participating owner markets cattle, Sterling issues a certificate and an affidavit verifying the source of the cattle, number of animals in the lot, their age and destination. Those documents follow the animals through the production chain and to the packing plant. End-users such as retailers or exporters can license the use of a label identifying beef products USDA Process Verified through the Sterling Solutions system, and carrying the USDA shield.