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Weekly UpdatesArgentines can do something now that nobody else can do--they can read the life story of the cows that produced the steak they eat. And they can do it all on microchip.
The U.S. beef industry will suffer from bans on its products thanks to a lone Holstein cow in Washington State that was diagnosed with mad cow disease in December. Meanwhile, the world is demanding more disclosure from global beef producers, and in Argentina, the Rosenbusch Institution hopes its microchips will herd in business.
The Rosenbusch Institution is largely a veterinarian service for Argentina's cattle farmers. Recently, it launched the Pampa Mia plan, which installs microchips in a cow's ear so that all participants in the business can record and extract data concerning the cow's location, vaccinations and diet. The beauty of the microchip is that it is safe and secure inside the animal, and cannot fall off the way a traditional tag could. The Pampa Mia program sold 226,331 kilos of beef in 2003, and demand is outstripping supply, according to Rosenbusch Institution Director Rodolfo Balestrini.
"This has resulted in great interest from demanding buyers from [Europe] who are willing to spend US$28 to $36 for a kilo of beef in a supermarket," Balestrini says.
A sole mad-cow case in the United States recently brought to light the inefficiencies that mere tie-on ear tags for cattle can create. The disease left investigators scrambling to determine whether the cow was from the United States or Canada, and what it may have eaten. One sick cow is no joke, as the scare can cost an economy billions of dollars. The United States Food and Drug Administration told Congress in 2001 that a mad-cow outbreak in the United States comparable to the one in the United Kingdom during the 1990s could cost U.S. beef producers $15 billion.
The Rosenbusch Institution has been working with this technology since 1999 and up to now it has tagged 250,000 animals out of Argentina's total 55 million head of cattle. Most of the meal's consumers are in Germany, Italy, Spain, France and Belgium, Balestrini says. Those customers are also demanding largely premium beef cuts, such as Hilton cuts, which can fetch $9,000 a ton. The Pampa Mia beef also caters to the more ex-elusive restaurants and boutique-style butcheries across Argentina. Each consumer that buys Pampa Mia beef will find a code on the package that they can type into a Web site to monitor the details of the source of the beef. The site even contains a photograph of the cow in question as well as the farmer and the plant where the animal was slaughtered.
The Pampa Mia program has boosted earnings among its participating cattle suppliers, Balestrini says. Until now, cattle farmers raised cows and sold them to slaughterhouses and hoped for the best prices. The Pampa Mia system allows these farmers to outsource veterinary and feeding services to the Rosenbusch Institution, which in turn, takes charge of the sale of the cattle. Slaughterhouses rely on the microchip data and make orders based on fat content of individual meal portions. Afterwards, the Rosenbusch Institution and the farmers share the profits.
First to market. "The objective is that the producer takes part in the supply chain," Balestrini says. This microchip technology has roots in Europe, where researchers had inserted chips into endangered species to monitor feeding habits. Argentina, however, claims to be the first to apply the technology to cattle farming, and business is rolling in.
In November 2003, the Rosenbusch Institution signed a contract with an Italian supermarket chain Dispar to supply beef to its 2,000 stores. Dispar has opted to buy entire portions of the wired cattle. Balestrini believes mad-cow disease and post Sept. 11 security concerns will prompt more demand for his services, as regulators worldwide clamp down on suppliers over bio-terrorism fears.
"Consumers are now looking for products and they are interested in finding out everything about the environment of where the cattle was raised," Balestrini says.
Analysts agree, pointing out that the availability of such information can iron out both safety concerns and general snags encountered along the supply chain. "The use of the microchip implies a competitive advantage, since instantly one can retrieve data that would give proof of sanitary meat," says Marcela Gimeno, an Argentina-based cattle farming analyst.
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