Anderson herself is a medium-size producer--her family's ranch, Coyote Creek, in Rock Island, Tex., currently hosts about 800 head of cattle. Although she does not yet belong to an alliance and has no one to share data with, she has already begun outfitting her animals with ear tags in anticipation of the day when she will. "I want to get more for my calves, and I know I won't even have the opportunity if I don't do this," says Anderson, who collects information in an Excel spreadsheet on her Dell laptop. She also evangelizes among her smaller neighbors. Her most recent convert is a ranch with only 38 head; the rancher, excited by the technology but not ready to relinquish the old way of doing things, had the names, not the numbers, of his cows embossed on the outside of the tags.
Such small and medium-size players are the original source of 90% of the nation's beef. Anderson believes that once they begin sharing information among themselves and with their customers, they can--in addition to becoming part of the alliances--forge their own competitive entities with marketing power comparable to those large partnerships. "If we get bigger pools of high-quality cattle, we may get a premium because there will be more good cattle per day that are available," says Anderson. "If we're all getting information back and using that information to improve decisions, it can have economic ramifications for the entire area."
That kind of thinking is fairly new for small businesses, but it makes enormous sense for many industries, says the Supply Chain Council's Bill Helming. "In the early days we took a Darwinian approach: it's me or you. Now companies are learning to compete as a chain"--even if it's a horizontal chain encompassing players that might normally be considered rivals, he explains. Cooperation among small companies also makes them more attractive suppliers to large customers. "In the past, people have said, 'All these mom-and-pops are too hard to do business with. I have to negotiate separate terms with every one," he adds. "If everyone will agree to act in a standard way and use this technology for leverage, that can make for a very effective collaboration. It could totally change the playing field."
Leigh Buchanan is the editor of Inc. Technology.
Where's the Beef?
What follow are the four most common links in the beef-manufacturing chain. Retailers and distributors are also involved, but since information is tracked using ear tags that are removed at the packing plant and sent back to the rancher, their ability to enter information into the system is currently limited.
What they do
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Data they review or collect
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Ranchers: They breed cows and bulls to produce calves, both for meat and as replacements for the herd. They generally sell the calves once they are weaned, at six to eight months, and weigh 500 to 600 pounds.
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Genetic history; birth date and weight; weaning date and weight; medical treatments, vaccinations, and other significant incidents
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Stockers/Growers: Their objective is to add weight as fast as possible while keeping the animal healthy. They sell animals at about 750 pounds, when they are 10 to 12 months old.
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Periodic weight measurements; medical treatments, vaccinations, and other significant incidents
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Feed-yard operators: They feed animals a high-energy diet for 90 to 200 days, until they reach approximately 1,100 to 1,200 pounds.
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Feed-ration ingredients; weight measurements; medical treatments, vaccinations, and other significant incidents; animal origin and history
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Packers: They slaughter the animal; chill, age, and cut up the carcass; and pack those pieces in boxes for shipment to distributors and retailers.
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Live-animal weight; carcass weight, warm and chilled; yield, grade, and quality of meat; carcass defects
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Equal-opportunity Beef
Americans love red meat and democracy. So what could be better than a nationwide system that ensures all flank steaks are created equal?
A national source-verification and performance-data-tracking system similar to those being implemented by several beef alliances was proposed in December by a task force of the National Cattlemen's Beef Association and was scheduled to be voted on at press time. Like the alliance databases, which would feed into it, the national database would be maintained by an unbiased third party. Any cattle company that put information on its animals into the system could track how they fared up and down the road--even if it didn't know who had bought them. (Performance data, searchable by ID number, would be blind, so a rancher might know how much fat a packer found on one of his calves, for instance, but not who that packer was.) The system would be supported by fees from companies using the information to improve their products. "The goal is that ranchers would never have to pay to put data in--just to get it out," says Anne Anderson, a 25-year veteran of the Texas cattle industry and a member of the task force.
If the national system gets a thumbs-up from the association, Anderson expects it will be operational by 1999. But it could be several years before a critical mass of companies participates. "There will be a pretty big gap between the time the alliances and some of the progressive thinkers come in and the time coffee-shop talk gets others to use it," she says. In addition to a pervasive fear of technology among many players ("They're just so intimidated by the Internet," Anderson says), some ranchers are worried that the system might provide the smoking gun in the case of a health scare. If a disease or infection is traced back to their beef, says Anderson, "they don't want to be put out of business, and that's a very real option." --L.B.
