By Jacob Bunge
Cowboys are adding algorithms to their saddle bags.
Drugmakers, startups and cattlemen are betting that sensors and
data-sifting software can help keep cattle in Western U.S. feedlots
healthier than cowboys can alone. New tags clipped to animals' ears
aim to monitor movement and feeding patterns for early signs of
sickness.
With low cattle prices pinching ranchers' profits, developers
believe they can save feedlots money on drugs like antibiotics and
avoid treating healthy cattle. The tactic also appeals to some
health officials and consumers who say antibiotics are
overused.
Startups like Southfork Solutions Inc., Precision Animal
Solutions LLC, Quantified Ag and GrowSafe Systems Ltd. are
jockeying to get their sensors and tags into cattle pens, seeking
to carry a data revolution in U.S. agriculture into livestock
operations.
Animal pharmaceutical companies like New Jersey-based Zoetis
Inc. also see the technology as a way to diversify as restaurants
and food companies push to reduce the level of antibiotics used in
meat production. Food regulators also have sought to curb some uses
of the drugs.
The widespread use of antibiotics to raise chickens, hogs and
cattle has drawn criticism from government and consumer groups who
say it hastens the development of hardier bacteria, putting human
health at risk.
Developers say their systems can reduce medication costs by
about 15% per animal and save more sick cattle from death. But
longtime cattle hands remain leery that a computer program could
tell them more about a steer than they can glean from
horseback.
David Sjeklocha, who helps oversee about 240,000 cattle as
operations manager of animal health for Kansas-based Cattle Empire
LLC feedlots, had to persuade one cautious cowboy to stick to
recommendations provided by Southfork, an Idaho-based developer of
cattle sensors.
Southfork's system monitors the trips steers and heifers make to
the feed trough for signs they aren't eating enough and might be
getting sick.
Early in a pilot that began in late 2013, one cowpoke thought
Southfork's system was missing some sick animals and called Mr.
Sjeklocha from horseback: "He said 'Doc, this ain't right, if these
cattle are sick, they need to come out,' " said Mr. Sjeklocha, who
holds a doctorate in veterinary medicine.
Mr. Sjeklocha persuaded him to follow Southfork's system. Out of
the 12 animals the cowboy wanted treated, only two wound up being
ill; Cattle Empire saved money on labor and unneeded
pharmaceuticals.
Quantified Ag, which analyzes animals' mobility and temperature,
invested more than $1 million to develop its system and currently
charges around $18 an animal for the service, according to Vishal
Singh, chief executive of the Lincoln, Neb.-based company.
Southfork and Precision Animal Solutions are testing their
systems ahead of wide-scale commercial release, and have yet to
settle on pricing. Officials say the savings on drugs and labor
could be meaningful as feedlots face immense profit pressure.
Rapid expansion in the U.S. cattle herd has sliced wholesale
beef prices by 17% over trailing 12 months and caused the average
feedlot to lose a record $307 an animal in 2015, according to
estimates from data provider Livestock Marketing Information
Center. U.S. feedlots are on track to lose about $90 an animal this
year. Those estimates don't include financial hedging strategies or
the use of growth-promoting feed additives, which can improve
profitability.
Zoetis, the world's largest animal drugmaker by sales, began
investing in Southfork several years ago and earlier this year
acquired its technology. The companies didn't disclose terms of the
deal.
Jon Lowe, Zoetis's head of cattle business, acknowledged that
widespread use of the technology could cut some animal drug sales.
But he said Zoetis sees that trend as inevitable as livestock and
poultry producers scale back antibiotic use in response to consumer
demand.
"I don't think we ultimately lose in the long-term," he
said.
Elanco, an animal pharmaceutical developer owned by Eli Lilly
& Co., offers data-driven services aimed at maximizing
livestock growth and monitoring feeding rates. It isn't yet using
its system to identify sick cattle, a spokeswoman said.
T
o monitor cattle health, feedlots typically rely on cowboys to
ride through pens, watching for lethargic animals that are having
trouble breathing. Bovine respiratory disease, similar to
pneumonia, is among the most common ailments afflicting beef
cattle.
"They want to hide their symptoms from us because they perceive
us as predators, and rightfully so," said Quantified Ag's Mr.
Singh.
For some feedlots, the systems could help fill empty saddles.
While the technology isn't aimed at replacing cowboys, it might
make them more efficient, developers say. Instead of scouting for
sick cattle across dozens of pens, they will ride out with a
checklist identifying the right steers.
"Technology is going to be imperative for our business in the
future, for the simple fact that labor is so difficult to come by
today," said Todd Sigmon, a Colorado-based manager for Dinklage
Feed Yards. "Cowboys are somewhat of a dying breed."
Write to Jacob Bunge at jacob.bunge@wsj.com
(END) Dow Jones Newswires
September 20, 2016 05:44 ET (09:44 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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