Brian Buhr is an agricultural economist at the University of Minnesota. His traceability experience comes from work in E-commerce, a project to investigate European livestock and poultry traceability programs, and work in value-added marketing and supply-chain management.

Q. Briefly describe the European traceability programs.
A. There are three primary components: 1) production standards and quality-control programs, 2) certifying or auditing agencies and 3) management information systems.

Traceability programs are split between government-assisted program (a minimum), private firms and producer cooperatives.

The goals are to provide transparency to the production process, increase quality control through auditing and capture value from practices such as free-range, antibiotic-free and organic systems. Firms and cooperatives are using their unique traceability systems as marketing tools.

Q. What kind of traceability technology is the EU using?
A. The Internet is revolutionizing supply-chain management and enabling cost-effective traceability. Leading systems use an information architecture that includes Enterprise Resource Planning Systems, internal networks to transfer information within their sphere of the supply chain. The Internet is used to communicate information to others such as consumers and retailers.

This structure provides information security and
enables information transfer needed to complete traceability. All this rests on large-scale, relational databases to capture and manage the data.

However, they also need technology to capture the physical world data. The Europeans have invested heavily in measurement technologies. They have experimented with radio frequency identification and embedded micro-chips, but the bar-code and scanning technology has held up well. It's cheap, has reliable readability and is a standard that all chain participants can use without a large investment in readers.

Q. Is this type of system feasible in the U.S. pork industry?
A. Traceability is technologically feasible. The key question is does it make economic sense? In this regard, there are three keys: 1) economies of scale, 2) consumer willingness to pay for traceability and 3) competitive pressures of adoption.

Q. Who would benefit most from a traceability program?
A . Traceability is always positioned as consumer driven, but I'm skeptical. You can implement quality control and add value without it. Actually, consumers may lose because it is expensive.

Traceability does enable companies to manage their supply chain more efficiently because they have more real-time ordering processes. It saves them money if there is a food safety problem because they can identify the problem and contain it sooner.

A byproduct is improved production management because of improved record and benchmarking systems.

Finally, there's a structural component. All the traceability systems that we observed were tightly coordinated or integrated production chains. Those systems will have the greatest success in rapid adoption and implementation.

Q. What are the pros/cons?
A. Advantages include the ability to improve information flow within the pork chain. This improves the
allocation of value and costs to those who create them. It also improves quality control because it enforces measurement and management of those processes. It reduces food-safety recall costs.

A major issue also relates to public- and animal-health initiatives. Concerns raised by the United Kingdom's foot-and-mouth outbreak, as well as bioterrorism will drive animal identification and tracking programs.

The disadvantages involve implementation costs. Standards and technologies will have to be developed and adopted. It also may require restructuring the supply chain, depending on the objectives. Once chains are coordinated and standards are adopted, it may require significant effort to implement new practices.

Q. Will the U.S. pork industry adopt a traceability program?
A. It will require production standards. There are clear diseconomies of scale to this because one set of standards won't fit all systems. It also will require auditing bodies. It will require tightly coordinated production systems and technology adoption to enable measurements described earlier. Some of these are already in place. Finally, it will require investment and adoption of electronic information and records systems.

Individual chains will develop programs to differentiate their products. But these will tend to be niches.

The commodity chain also will develop some form of traceability, but it will be a minimal tracking program.

Traceability will emerge, the question is how intensive will the programs be, and that depends on the objectives.