USDA Never Ever 3 certification helps producers access value-added markets

Sep 11, 2009

USDA "Never Ever 3" certification helps

producers access value-added markets

While producers are still trying to sort out the differences between natural, organic, and grass-fed beef, USDA has recently introduced a value-added certification to the mix in an attempt to clarify niche-marketing production claims and to provide producers with a marketing tool for their natural cattle. The year-old USDA "Never-Ever 3" (NE 3) certification indicates that cattle are produced according to "natural" standards, namely, that no antibiotics, growth promotants, or animal byproducts are ever used in the production of the animal. However, because USDA has long used the designation "natural" to indicate something else—minimal post-production processing and absence of artificial ingredients—it could not simultaneously use the "natural" designation to mean that no antibiotics, growth promotants, or animal byproducts were used in production. Therefore, the USDA’s NE 3 designation was developed to provide a government-approved third-party verification that certifies when beef is produced according to "natural" standards. Like the "USDA Organic" certification, USDA NE 3 certification can only be granted if the producer has been certified by USDA or a USDA-approved certification provider. However, unlike organic certification, which is mandatory for organic producers, the NE 3 certification is strictly optional for natural producers. Producers raising natural cattle simply have the option to become USDA NE 3 certified and to use this third-party certification as a marketing tool to gain entry to value-added markets.

There are many methods available to producers who wish to verify that their cattle are raised according to "natural" practices, ranging from the simple signing of an affidavit to participating in one of a range of third-party verification programs. NE 3, however, is distinguished by the fact that it is the only third-party verification system for natural production audited by USDA.

NE 3 is a "high-level" certification, meaning that it not only certifies that no antibiotics, growth promotants or animal byproducts are used in production, but also age and source verifies cattle as well. This gains a producer’s cattle access to the domestic natural market, but also to European and Japanese markets, making NE 3 certification a powerful tool. Further, it means that even if some cattle have to be removed from a producer’s natural program, they still may be eligible for value-added foreign markets.

For example, if a rancher has to treat 10 calves with antibiotics, he can no longer sell those 10 as natural. However, if he is NE 3 certified, it will be verified that his calves received no growth promotants and are age/source verified. This still makes the 10 treated calves NHTC (non-hormone treated cattle) compliant, which gains them access to European markets if they are 30 months or younger. If calves are verified to be 20 months or younger, they gain access to the Japanese market. Therefore, an NE 3-certified operation offers value-added marketing options for calves even when they have to be removed from the natural program.

There are three USDA-approved NE 3 certification providers: Samson LLC, IMI Global, and Verified Beef. The certification process with all three providers is essentially the same. After contacting the verification provider, a producer should expect to host an on-site audit of their ranch or feedlot, and to undergo training on documentation and handling. Once a producer is approved, special tags will be provided for the cattle and documentation is issued certifying that the outfit is NE 3 compliant. Cost of certification varies from provider to provider. Typically, producers pay a flat fee for certification of their operation, and then a per-head fee which includes tags and processing fees. Certification for NE 3 compliance is required yearly.

Scott Mueller, owner of Samson LLC, explains that his company takes a hands-on approach to working with clients. Although being NE 3 compliant does require significant record-keeping on the part of the producer, Samson LLC works to minimize the amount of paperwork producers have to manage. Explains Mueller, "(Part of) the service we offer is that when they are ready to ship cattle, we manage all the paperwork and pass it on to next person in the chain. Our objective is to let the producer produce, and we handle the administration of the program. We try and keep it simple."

Many ranchers will wonder if USDA NE 3 certification will eventually become mandatory for natural cattle, just as organic certification is now mandatory for organic cattle. According to Jim Riva, branch chief of the USDA Audit Review and Compliance branch, there is no plan to make NE 3 certification mandatory. "We’re putting this out there as a tool for producers," explains Riva. "I don’t ever see it as becoming a requirement; it is strictly a marketing tool. This is very simple. We are saying to the producer, you don’t use antibiotics, growth promotants, or animal byproducts, and we’ll verify that. I don’t see this as being anything that anybody has to do at all. It is strictly voluntary."

Riva did point out, however, that the market may eventually make NE 3 certification important for natural producers. For example, Tyson’s natural beef line is in the process of becoming strictly NE 3 compliant. If Tyson is successful in promoting NE 3 at the consumer level, then other packers may need to respond in kind. It will therefore be important for all natural producers to keep an eye on the NE 3 program’s acceptance in the industry. If NE 3 certification becomes sufficiently widespread, producers may not want to be left behind.

At present, USDA NE 3 certification represents only one of many tools available to producers to add value to their naturally-raised cattle. It remains to be seen whether NE 3 will become a new market standard. One thing, however, is clear. The more a producer can do to get his cattle to stand out from the crowd, and the more access to value-added markets he has, the more likely he is to cash in on premiums at sale time. Remarks Mueller, "What I have seen in the past is that the innovators have drifted toward these kinds of programs as a way of adding value to their cattle. Those who are trying to stand out from everyone else are the ones who are doing these kind of things. It is a way of differentiating themselves."

Richard Stober is general manager of Superior Livestock Auction, which now offers auction sellers an NE 3 certification option through IMI Global. Says Stober of NE 3 certified cattle, "This is the first year that any of this has come around, and I was amazed at the response we got. When those cattle came on (the video auction), I tell you, those phones lit up. There was a real strong interest in those cattle." — Andy Rieber, WLJ Correspondent