Executive Summary
Wyoming beef producers are world-renowned for their high standards and best-in-class product but rarely receive the premium they deserve for their commitment to quality. BeefChain’s mission is to create a new “rancher-centric” supply chain utilizing blockchain technology to recapture the value now realized by third-party feedlots and processors.
By enabling unique animal identification and ensuring origin, Beefchain allows the rancher to receive premium pricing for premium beef and provides consumers with greater confidence in the meat they consume.
Background
The majority of cattle operations in Wyoming are traditional family-owned ranches.
Each fall, the ranch sells calves to a feedlot operator that fatten the animals before selling to a meatpacking beef processor. Absent corporate backing or mineral royalties, ranchers must finance the carrying cost onthe cattle – which introduces significant financialrisk to everyday business risk (weather, feed/labor costs, etc.). Fundamentally, ranchers are price takers and often struggle to cover debt service.
Problem(s)
Consumers already pay a premium for what is labeled “grass-fed” beef but have no way of verifying such claims. Separately, the rancher who diligently raised a cow on the open range often receives a price similar to that of a cow raised in unknown conditions. The price premium is captured further up the supply chain when the feedlot operator/processor sells to the retail channel which passes it through as their markup. The rancher gets the lower, functionally identical price at the sale lot – two steps removed from the end customer.
Solution
BeefChain creates a model for the rancher that accomplishes two objectives. The first is to bring technology to therancher in order to enhance traceability and prove humane handling. BeefChain’s RFID tags and other IoT device supload unique cow/calf information to the blockchain to establish immutable, auditable provenance to better capture the free range, grass-fed premium.
The second is to create an end-to-end supply chain solution we call “Rancher to Retail” through BeefChain invest-ment in feedlot and processing operations. These operations will allow BeefChain to offer exclusive, long-term relationships with buyers across the globe.
Market Opportunity
During 2017, 11,400 Wyoming ranches generated $1.1 billion in cattle sales. The state has approximately 2.1 million cows and most family-owned ranches carry permanent herds composed of 90% brood cows, 5% bulls, and 5% dry cows. If we conservatively estimate that two-thirds of all brood cows produce calves, this leads to a potential market of 600,000 calves.
BeefChainTM has already partnered with six multi-generational Wyoming ranches and tagged nearly 1,600 calves.
These “first-in-the-world” blockchain calves, totaling over 500,000 lbs of high quality Wyoming Certified Beef, will be ready for delivery in early fall of 2019.
