Blockchain technology, an open-source system of conducting business, has been touted as the hero of those seeking greater business flexibility and communication, but its complexity and need for a great many participants makes its adoption by the livestock industry seem far off.
With an estimated 40% of US food wasted each year, it’s clear that more needs to be done to control supply so that it meets, but does not exceed, demand.
What is needed, said Gary Rodrigue, IBM Food Trust WW leader, at a National Institute for Animal Agriculture meeting in Overland Park, Kan., recently, is greater visibility across the supply chain. He envisioned a system that provides instant, back-and-forth communication with permission.
BLOCKCHAIN HAS POTENTIAL
Blockchain has the potential to be that transparent, yet secure, system of communicating needs and desires across a supply chain, Rodrigue said. Blockchains are not proprietary but are considered to be “open source,” meaning anyone with permission can use them.
The problem now is figuring out how to deal with the mammoth data problem such a system would entail, Rodrique said. Another issue is the privacy of all involved. He acknowledged that both issues were huge.
Once those issues are worked out, blockchain systems could be used for greater efficiency in the cattle and beef industries.
Another cattle trader said blockchain had the potential to be used for disease traceback.
Up until the last few years, all supply and demand communication has been done through a pipeline of sorts. A supplier and buyer forge a relationship, and anyone who wants to compete must forge a new relationship, or pipeline, with a buyer or seller.
That worked fine for millennia, but tomorrow’s consumer is demanding more choices and information about the food they eat. And economics demands greater efficiency and less waste.
Rodrigue talked of almost instant communication between buyers and sellers via blockchain that has multiple access points. If a buyer needs certain products, a variety of potential suppliers with access to the blockchain can offer to supply that buyer’s needs without the buyer having to contact each one individually.
An open-source platform that will allow the layering of applications, perhaps on cell phones, could answer the call, he said.
It is an open-source platform with no central administrator among people who know nothing about one another, said Steve Wilson for Constellation Research in a ZDNet article explaining blockchain.
Bitcoin’s blockchain functionality and security comes from the network of thousands of nodes, or access points, agreeing on the order of transactions, Wilson said.
“The diffuse nature of the network ensures transactions and balances are recorded without bias and are resistant to attack by even a relatively large number of bad actors,” Wilson said.
CATTLE, BEEF RECAP
At the Fed Cattle Exchange video auction Wednesday, 148 head of fed cattle sold at $116.75 per cwt.
Cash cattle traded last week late at mostly $118 up to $118.50 per cwt on a live basis, up $1 to $2 from the bulk of the previous week’s action. On a dressed basis, cattle traded at mostly $183 up to $183.50 per cwt, up $3 to $3.50.
The USDA choice cutout Monday was up $0.47 per cwt at $213.08, while select was up $0.77 at $199.18. The choice/select spread narrowed to $13.90 from $14.20 with 108 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Friday, was $147.85 per cwt, up $0.72. This compares with Monday’s Jan settlement of $144.50, down $0.72.