Playing the cards right on animal welfare

Apr 2007... The time is now to address animal welfare expectations while options remain on the table, says livestock industry consultant Earl Dotson.

From “triggering events” such as Arizona’s Proposition 204 banning crates for sow and veal calves to the new welfare initiative recently announced by Burger King, the already complex issue of livestock animal welfare faces a new level of ramped-up, fast-evolving expectations. But there are options and profitable opportunities for those who accept the new realities and take steps to get ahead of the game, says livestock industry consultant Earl Dotson.

“We may not like what’s happening and we may not agree with it, but I do believe it will come to pass. We’ve got to recognize that, and look at what we can get out of this situation that’s a positive.”

Dotson is president and CEO of Validus, an Iowa-based company, specializing in third-party certification for farmers and food companies. Validus offers environmental, food safety and animal welfare audits for poultry, beef, egg, dairy and swine producers. Earl has specialized in producer education throughout his 23 year career in the U.S., which included several years with National Pork Producers Council before launching Validus.

In a presentation at the Livestock Care Conference, March 23 in Red Deer, hosted by Alberta Farm Animal Care (AFAC), Dotson provided an overview of key developments shaping the livestock animal welfare debate. In the wide-ranging talk, titled “Audits: Obligation or Opportunity?” he also provided insight on how those in the livestock industry can navigate this complex issue to not only avoid pitfalls but to align themselves to capture opportunities in the new environment.

The key is to not delay in addressing the animal welfare issues, says Dotson. “Animal welfare issues are something livestock producers will have to address. The only question is now or later. The longer you wait to address the issues, the more options will be taken away from the table.”

Agriculture under attack

Today’s reality is that animal agriculture is under attack, says Dotson. Advertisements from People for the Ethical Treatment of Animals (PETA) have appeared in mainstream newspapers and magazines with alarming headlines such as “KFC cruelty” and “From shell to hell.”

At the same time, consumers have changed, he says. They are less connected with agriculture and their trust in agriculture practices has eroded. Consumer perceptions are also complicated by tremendous cultural confusion in society regarding the role and function of animals.

“Fifty years ago the average consumer in North America had a direct connection to agriculture, but today the vast majority are at least three generations removed from the farm,” says Dotson. “This brings a new level of challenges as consumers want assurances their food is safe and comes from animals that have been well looked after.”

The general lack of trust in agricultural practices is something that has changed in the last 10 years, says Dotson. “We’ve lost the ‘good guy’ image. We could have 100 examples of being right, but the one time we say something and it’s found not to be true, they trust us less. One rotten apple in the bunch spoils them all.”

Validus has spent hundreds of thousands of dollars on consumer surveys in key markets. In one survey component rating the believability of different individuals and groups on the question of treatment of animals, veterinarians and the Humane Society of the U.S. (HSUS) came out on top while hog farmers and dairy cattle producers came out near the bottom.

Dotson says agriculture itself is to blame for a large part of this perception. “When we’re challenged, we are quick to attack the attacker and we defend everything we do with science. We could do that 15 years ago, but not today.”

Loss of ‘good guy’ image

The bigger agriculture grows, the less sympathy it gets, he notes. “Many agriculture issues have become subservient to production, because production equates dollars. When I watch TV from Iowa and I see a tractor go across the screen in spring that costs more I know than the house that I’m living in, how sympathetic am I?”

A telling barometer of the livestock animal welfare issue was the passing of Proposition 204 in Arizona last November, which banned crates for gestating sows and for calves. “Both HSUS and the livestock industry spent seven digit figures on this, and HSUS won. We can defend crates with science, but the vote wasn’t about science. It wasn’t even about crates. It was about the fact that people who don’t understand ag don’t like the idea of sows and calves that can’t turn around.”

It’s tempting to dismiss the result as “it’s only Arizona,” says Dotson. But the results showed the writing on the wall. Within days of the result, meat giant Smithfield Foods announced plans to phase out sow stalls over the next 10 years. Canada-based Maple Leaf Foods made a similar announcement less than a week later.

“In my opinion, that was a very smart move on Smithfield’s part, because they got to pick 10 years,” says Dotson, pointing out that PETA, fronted by executive director Wayne Purcelle, had an agenda aimed at phase outs over five years. “Smithfield trumped Purcelle – he can’t force them to go back. The announcement was a bombshell, but Smithfield got ahead.”

There’s a lesson in that for the livestock industry as it grapples with ongoing battles over animal welfare issues, says Dotson. “Addressing issues sooner is better than later because options disappear.”

Dealing from position of strength

At the current stage of the livestock animal welfare debate, livestock producers still have choices, he says. Aside from doing nothing, key options include: to pursue self certification using self-endorsed programs and policies; to support government oversight and regulation; or to support third-party certification and verification.

Self-certification is unlikely to meet consumer expectations and government regulation is typically undesirable, notes Dotson. That leaves third-party certification and verification as an option worth serious consideration.

“A key to how you respond is transparency,” he says. “With Proposition 204, I believe the lack of transparency really cost the livestock industry. Early in the campaign, the press said ‘can we see a farm.’ Our answer was: ‘No. Biosecurity concerns.’ That just doesn’t cut it with the public.”

The public can’t expect to see everything, but third party certification and verification can give them confidence, says Dotson. “That’s what’s it’s going to take. If you have the right third party backing up what you’re doing, then it’s believable.”

Consumer surveys also show the public doesn’t expect perfection, as long as the process is transparent and shows continuous improvement. “This is one thing that 85 percent of the population gives us. We don’t have to be perfect. But show us you’re doing something to improve. It’s got to be measurable and it’s got to be verifiable.”

Those who get on board with third part certification and verification will have value-added opportunities in the emerging marketplace, he notes. Progressive retailers are looking for a competitive advantage and need suppliers who can deliver that.

“We’ve seen what’s happened with organic and the same thing can happen with animal welfare,” says Dotson. “Consumers are showing they are willing to pay a premium for food made in their manner of preference or in what they consider to be a socially responsible manner.”

Capturing market opportunities

Organic is the fastest growing commodity today and it’s not cheap, he points out. “Studies show 67 percent of America buys organic on a regular basis. We couldn’t have said that two years ago – it’s growing that fast. Today the milk case at Wal-Mart is one-third organic.”

U.S. based Whole Foods Market has already introduced an “animal compassionate” label to alert shoppers to products from livestock that were raised according to humane-handling guidelines the company itself developed. “What starts at Whole Foods could soon end up at Wal-Mart,” says Dotson. “An animal welfare certified dairy product that increases sales by 10 percent would be considered a huge opportunity by any food store.”

The wave is already well on its way, he says. “Non-traditional products are expected to control about 40 percent of the markets by 2008.”

Again, getting in early is key, says Dotson. “The value gained will only last until the product becomes a commodity or until it is required of all products.”

Fast pace requires fast action

Fighting the tide is a losing proposition, he says. “We made that mistake on the environmental side. The longer we fought, the more options were taken off the table.”

Just days after Dotson’s presentation at the Livestock Care Conference, Burger King, the world’s second largest hamburger chain, announced it would begin a progressive phasing in of buying eggs and pork from suppliers that do not confine their animals in cages and crates. The company also said it would give preference to chicken suppliers that use gas rather than electric shocks to render birds unconscious before slaughter.

“With animal welfare, if we start now with programs that are transparent and verifiable to the public, we can buy time to deal with changes and have more control over those changes,” says Dotson. “At the same time, we can avoid missing out on the market opportunities that come with this change. We have a lot more options that we can pursue and barter with today than we will have five years from now – I can guarantee you that.”