Last year was good for Cargill’s sustainable beef pilot project — good enough that the company is turning it into a standing program.
The pilot is currently the only source for beef verified under the Canadian Roundtable for Sustainable Beef (CRSB) standards. Producers audited to the standard can expect an extra payment for their cattle, assuming that animals are only sold to other certified farms and feedlots and are processed through the Cargill facility, currently the only processor in Canada to pass a CRSB accepted audit.
Why it matters: Cargill is the lone supplier of CRSB-approved beef. It’s past the pilot stage and says demand is exceeding supply.
The program paid over $230,000 back to farmers in 2018, Emily Murray, Cargill general manager of beef sales to McDonald’s, told the roundtable during the group’s semi-annual meeting in Winnipeg April 25. Payments ranged from quarter to quarter, depending on the volumes fed into the program, but ended the year with an $18.48-per-head credit.
Cargill is looking for ways to bump up supply in the coming year. Demand has far outstripped available volumes, according to company estimates.
McDonald’s is very interested in the program’s health. The restaurant chain is currently the only end-user to boast the CRSB’s certification mark, and sources at least 30 per cent of the beef for its Angus burger line from the Cargill program.
Jeffery Fitzpatrick-Stilwell, North American sustainability manager for McDonald’s, said it will be critical to convince farmers to complete their audits and start feeding into the certified supply chain in the future.
“We’re hoping to incentivize that and use the marketing to connect to producers to get more of them to say, ‘Oh, hey, McDonald’s is really committed to this. It’s starting to tell our positive story. I’m going to do my bit too and I’m going to get that audit done so that my cattle are now part of that story going forward,’” he said.
Cargill is in talks with other customers, Murray said, but noted that tight supply is also bumping up price, something that has cooled some efforts to lock down customer commitments.
Turning to tech
The company hopes better internal software and external data sharing might help increase program efficiency and address some of its supply-and-demand issues.
The current system for farmer payments is heavy on manual reporting and spreadsheets, tying up administrative time, Murray said. That system may be unsustainable as the program grows and more volumes flow, she added.
Better computer systems will draw some of that information automatically, make the program more agile and allow Cargill to answer consumer questions more quickly, Murray said, something that, in turn, may help foster new customers. Those improvements will also get farmer payments distributed more quickly, she said.
“Once we’ve generated the supply within that data system, now we can really optimize how we allocate to individual customers,” she said.
“It will actually help us manage the demand a little better as well,” she added, noting that the company is cautious about promising volumes to new customers due to lack of information right now.
Cargill expects the improved information will allow it to better match its supplies with a potential customer’s supply chain.
The company expects those internal improvements to be in place within a matter of months.
Cargill is also hoping to turn some of its data back to the farmer.
“There is data sharing going on in the industry in terms of, the cattle movements are being tracked, aggregated, and I’m getting reports,” Murray said. “When I submit an ear tag that we’ve retired to BIXS, they come back to me with; yes, this animal qualified because I’ve tracked their movements through the system; no, it didn’t qualify or I don’t know, which for us, right now, counts as no.”
Cargill hopes to eventually provide farmers with easy access to the certification status of their cattle.
That information could be used as proof to a potential buyer, Murray said. She hopes that, in time, will help producers create the links necessary to keep cattle on verified operations and eligible for the program.
“People can decide in real time,” she said. “Right now, people don’t really know. Unless you’ve got direct buy at an auction mart, you don’t actually know if your cattle are going to qualify or not until you see the cheque come.”
The company is currently testing the accuracy of its tracking and data systems with a small group of feedlots and producers.
“Once we do that test, we’ll have a better sense of how long it’s going to take to roll it out to everybody else,” Murray said.