1. Farm Foundation Traceability and Quality Assurance Roundtable November 19, 2003 Kansas City, MO National Animal ID: Value Traceability Opportunities Glenn Smith USA Country Manager AgInfoLink USA

2. Providing traceability systems and business solutions to the food supply chain to increase profitability, promote food safety, and ensure regulatory compliance. A Member of the Alliance

3. Page 3 © Copyright 2003 AgInfoLink USA. All rights reserved. Government & Regulators Consumers Food Chain FoodOrigins Tools Answer Key Questions  How can we improve input/product consistency?  How can we segregate defective and unaffected product quickly and safely?  How can this not be just another cost?  How can we improve input/product consistency?  How can we segregate defective and unaffected product quickly and safely?  How can this not be just another cost?  Where did “it” come from? Where is “it” now?  What processes has “it” been through?  How do we contact all the players using “it” with X number of hours?  Where did “it” come from? Where is “it” now?  What processes has “it” been through?  How do we contact all the players using “it” with X number of hours?  “What is in my food?”  Where did this food come from?  Is it safe?  “What is in my food?”  Where did this food come from?  Is it safe?

4. Page 4 © Copyright 2003 AgInfoLink USA. All rights reserved. Traceability has two facets  Improved consistency  Higher yields  Lower cost per unit of production  Supply chain management  Justify brand claims – attribute x delivers result y  Lower cost new products Value Traceability Regulatory Traceability  Food safety requirements  Food security “record keeping”  Process Certification – like organic  Trace-back / forward / middle  Environmental requirements

5. Page 5 © Copyright 2003 AgInfoLink USA. All rights reserved. Can’t Tell Book By Cover Which Animal Produced Highest Profit?

6. Page 6 © Copyright 2003 AgInfoLink USA. All rights reserved. Tale of Two Steers Feeder Calf: $62.00/cwt$61.00/cwt Feedlot Wt: 508 lbs590 lbs Days on Feed: 161 ADG: 4.3 lbs/day2.4 lbs/day Quality Grade: Choice minusSelect minus Net Return: $322.93 profit$15.56 loss Want more of these cattle

7. Page 7 © Copyright 2003 AgInfoLink USA. All rights reserved. Reduce Variation 1999 Grid Demonstration Project, Iowa State University 66 Pens Evaluated Average Value Variation $358 Least Value Variation $156 Greatest Value Variation $746

8. Page 8 © Copyright 2003 AgInfoLink USA. All rights reserved. “On the average, I’m happy…”

9. Page 9 © Copyright 2003 AgInfoLink USA. All rights reserved. "By using individual animal ID and creating a P&L for each animal, we were able to identify any cow whose calf didn't return at least a $15/head profit. If we eliminated these animals from the herd, we would have removed 13% of the herd but increased the average return per head by over $40." - John Todd, Rollins Ranches, FL Increase Returns

10. Page 10 © Copyright 2003 AgInfoLink USA. All rights reserved. “With individual animal data, I showed my stocker customer that eliminating the bottom 10% of poor performers would have lowered his cost of gain from $0.41/lbs to $0.36. This would have added $29 / head profit!” -Mark Williams, Triple W, KY Reduce Costs

11. Page 11 © Copyright 2003 AgInfoLink USA. All rights reserved. By managing flour procurement based on these factors, bakery performance can improve by an estimated 1.4 – 2.0% Yield Improvements

12. Page 12 © Copyright 2003 AgInfoLink USA. All rights reserved. AgInfoLink – Linking the chain Packer Distributor Retailer Seed Stock Cow Calf Stocker Feedlot Processor Capture and Share Info Among Many Owners Key is to LINK the chain – Bridge the Information Islands Table

13. Page 13 © Copyright 2003 AgInfoLink USA. All rights reserved. Products and Services  Data collection  Data transfer  Data warehousing  Data sharing  Reporting and analysis  Data Benchmarking  Predictive Analysis

14. Page 14 © Copyright 2003 AgInfoLink USA. All rights reserved. Real Solutions, Real Customers

15. Page 15 © Copyright 2003 AgInfoLink USA. All rights reserved. AgInfoLink – Building private networks

16. Page 16 © Copyright 2003 AgInfoLink USA. All rights reserved.

17. Page 17 © Copyright 2003 AgInfoLink USA. All rights reserved. Backbone Support: Connecting Networks

18. Page 18 © Copyright 2003 AgInfoLink USA. All rights reserved. Regulatory Traceability: Supporting USDA / FDA  USDA / FDA charged with ensuring “rapid response” to ensure food safety by approving national systems and standards  This mandate is further driven by recent legislation which specifies new information requirements for individual supply chains  Country Of Origin Labeling in the 2002 Farm Bill  Bio-Terrorism Preparedness Act of 2002  National Animal ID pending  AgInfoLink private network tools enable supply chains to meet information requirements and support rapid response  Private networks collect data from partners and can provide information and reporting to meet both COOL and Bio-Terrorism requirements  These private networks connect to related networks and overall regulatory systems through secure, permission-granted protocols

19. Page 19 © Copyright 2003 AgInfoLink USA. All rights reserved.  Without traceability, there is no way to limit the scope of a product recall in the instance of contamination. Recall It All Traceability Provides Security

20. Page 20 © Copyright 2003 AgInfoLink USA. All rights reserved. Traceability delivers containment When a contamination incident occurs, the ingredient history of the product is traced and the potentially contaminated source ingredients are isolated. Most of the system remains “safe.” Selective Recall

21. Page 21 © Copyright 2003 AgInfoLink USA. All rights reserved. Market Access  Japanese consumer consciousness toward traceability is relatively high, driven by  StarLink GMO’s  SnowBrand mislabeling  Chinese spinach pesticide contamination  Higher end retailers have created “premium priced private labels” to restore confidence  Food Safety is considered a “private sector problem requiring private sector solutions.”  Retailers (AEON/Jusco) developing voluntary traceability for beef  Importers (Nippon Ham, Prima Ham) developing own traceability requirements  Government finalizing requirements for domestic traceability for meats; some pushing for mandatory import traceability.

22. Page 22 © Copyright 2003 AgInfoLink USA. All rights reserved. Japan: Private Label Retail Programs  Retailers in Japan are promoting premium-priced private label brands equated with quality, safety and trust based on origin Source: Aeon/JUSCO

23. Page 23 © Copyright 2003 AgInfoLink USA. All rights reserved. Japan: Private Label Retail Programs  Aeon/JUSCO has introduced a beef brand supported by a certificate of assurance from the Tasmanian governor and an endorsement by the Australian ambassador, which runs on in-store video ads. JUSCO stores aim to be top 10 global supermarket chain in 5 years. Source: Aeon/JUSCO

24. Page 24 © Copyright 2003 AgInfoLink USA. All rights reserved. Why Individual Livestock Identification and Traceability?  Value Traceability Systems  Improved management  Increased efficiencies  Reduced waste  Targeted Production  Create new values and reduce costs  Regulatory Traceability  Animal Disease Surveillance  Market Access  Rapid Response

25. Page 25 © Copyright 2003 AgInfoLink USA. All rights reserved. Recommended High Level Architecture Data Service Providers Beef Info Exchange USDA Other Custodians

26. Page 26 © Copyright 2003 AgInfoLink USA. All rights reserved. Key BIE Architectural Elements  No data would populate government database until approved emergency  Ownership/location data would be pulled from Trusted Data Custodians (e.g., BIE) to government, never pushed  BIE would provide government database daily AIN list  Relationship between Data Service Provider members of BIE to BIE database could be either “push” or “pull”

27. Thank You! AgInfoLink USA 1860 Lefthand Circle, Suite G Longmont, CO 80501 800.287.8787 www.aginfolink.com Glenn Smith USA Country Manager 478.747.6539 glenn@aginfolink.com