Blockchain is here. What is it? And how might it affect the beef and dairy industry? Read on to learn more about how this new technology is making its way onto the farm.
What is Blockchain?
Burt Rutherford at Beef Magazine explains the basic premise of blockchain. At it’s core, blockchain technology allows users to transfer information across a network of individuals in a secure and transparent way. The transactions, or transfers of information, aren’t held in a single location and are thus verified between parties. It’s then added to other transactions in the “chain” and a new “block” of data is created. That data becomes permanent and unalterable.
So, it’s not really a “thing” but a safe way for people to exchange information.
For agriculture, blockchain will bring a whole new level of transparency to different parts of the food supply chain. Each party that’s part of the blockchain would be able to trace the history of the product- all the way from the producer to the consumer. Presumably, consumers purchasing a steak would have instant access through the use of a QR code or number that could tell them the origin of the cow, where it was raised, slaughtered, processed and packaged before they purchase it in a grocery store.
For consumers, this means that they can be more connected with their food. Many people want to know where their food is coming from. Almost all consumers (94%), say they’d be more loyal to brands that provide transparency.
It also will increase the safety of food. Responses to food-related issues could happen much more quickly. If there were any meat that ever needed to be recalled, the traceability could be easily and quickly accessed through the blockchain and consumers could be notified sooner. Current traceback tests for many products can take days or weeks, thus increasing the likelihood that the problem products would be used or consumed.
Beef Industry Impacts
Blockchain is a new idea, and it’s hard to say when the technology will become more commonplace in the US. Right now, only one Australian company has utilized the technology. There’s also a UK-based startup called Provence that is working with three small beef operations in Arkansas to utilize blockchain. So it’s still the early days, but blockchain is probably coming.
Isaac Olvera is a market analyst with Informa Economics IEG in Memphis, and has looked at the impact that blockchain technology could have on the beef industry. He says not only does it help provide consumers with the transparency they desire from products, but that it could also help improve cattle prices for producers.
“Tapping into a growing Chinese middle class market could spur further export growth, thereby supporting the cutout and cattle prices throughout continued herd expansion.”
“From 2011 to 2016, beef consumption in China grew 20%, while pork consumption was up just 8% and broiler consumption declined by 5% over the same timeframe. The overall outlook for beef consumption in China into 2018 and beyond is a near 2% year-over-year increase, which likely will be supported by double-digit growth in beef imports from South American suppliers as well as Australia, with increasing shipments from the U.S. to China not built into Informa Economics IEG forecasts,” Olvera says.
Blockchain will provide the added transparency that consumers want, and make US beef more attractive in the global market.
Big Name Endorsements
Dairy Farmers of America
Dairy Farmers of America (DFA) just announced a new pilot project that will experiment with blockchain technology. They’ve partnered with food tech startup, ripe.io and are making efforts to provide more transparency along the food chain. The hope is that real-time data will increase consumer trust and confidence, and be beneficial to the dairy industry as well.
The project will utilize ripe.io’s platform and leverage data from a group of DFA member farms and manufacturing plants. David Darr is the Vice President Sustainability and Member Services at DFA, and is optimistic about the potential.
“We know that there’s a lot of application for blockchain technology within agriculture, and we ultimately want to help our dairy farmers be on the forefront. For now, our goal is to evaluate the technology and explore how it might benefit our supply chain.”
Nicole Heslip of Brownfield Ag News reports that Wal-Mart is now requiring all leafy-green vegetable suppliers to utilize blockchain technology. This is an effort on the company’s part to improve food safety for consumers. It should shorten the amount of time it will take to notify consumers about food safety issues with E.coli or recalls.
We’re only going to be hearing more about blockchain technology. It’s still very much in the trial stages as far as implementation in the US, but right now it appears to be a positive development for both consumers and beef producers.
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