Meat + Poultry - January 2004 - 59

process verification in place, retailers and
foodservice companies gain access to
VeriPrime certification, which serves as documentation of their commitment to food
safety and brand assurance.
Anderson says he doesn't expect dramatic changes in management practices at
the feedyard. The staff at Texas County
Feedyard already follows available guidelines for best management practices, beef
quality assurance and animal welfare, he
says. The VeriPrime system will help document that they are doing the specific things
that packers, retailers and consumers want.

Who pays?
Cost recovery has always been a stumbling
block for value-adding processes in animal
agriculture. In many cases, improvements in
genetics, animal health, facilities or handling practices pay off with improved production efficiency or higher sale prices. Jorgenson cites examples from other industries
such as grain milling and vegetable processing, where supply-chain management and
traceability have generated significant improvements in production efficiency (see
sidebar).
In other cases, rewards for adding value are more elusive. Producers, for example, could use probiotic for reducing E. coli.
The treatment increases production costs
but presumably adds value to the cattle.
Sometimes the market offers premium
prices for that value, but at other times,
market pressures limit premiums and the
service becomes a cost to the producer.
A unique aspect of the VeriPrime model is the cost-recovery system. "We separate
the services from the commodity market,"
Crain says. Retailers or foodservice vendors
initiate and pay for the services they believe
add value for their customers. If a process,
such as vaccinating against E. coli, has value
to the foodservice sector, they will pay for it
through licensing fees. Participants negotiate the value of their product, whether that
is live cattle, wholesale meat, etc., in the
marketplace. The added services for
VeriPrime certification, however, are not
negotiable. "They cost what they cost,"
Crain says. "They have a value distinct from
the price of meat."

Feedyard manager Scott Anderson says he
wants a way to document that the feedyard
employs specific practices packers, retailers
and consumers want.
For a business model, VeriPrime's
founders looked outside the food industry,
modeling the system on the way banks use
VISA credit cards. Competing banks use the
same set of standards and competing retailers recognize VISA cards and treat them the
same regardless of the bank that issued
them. In the VeriPrime concept, competing
retailers, processors, packers and producers
all use the same set of
standards and verification
processes, allowing uniform market access for
buyers and sellers up and
down the supply chain.
VeriPrime is not selling any technology, Crain
stresses. Instead, the service creates linkages across
industry segments, allowing participants to
use existing technology of their choosing.
They can continue to use those systems
while VeriPrime creates a mechanism for
uniform, market-based standards, process
verification and cost recovery. ■

■

Cost recovery
has always been a
stumbling block for
value-adding processes
in animal agriculture.

By John Maday
Drovers magazine

JANUARY 2004

FOOD SYSTEMS

ınsıder

FSI

Meat + Poultry - January 2004

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