By Baylie Evans, Writer

June 5, 2018


Branding, barbed wire and blockchain

Wyoming legislation opens doors to blockchain companies

Wyoming is aggressively pursuing blockchain tech companies. Businesses in the state already enjoy no corporate, personal or franchise taxes and low property and sales taxes, but state leaders knew it would take more to stand out.

In March, the Wyoming Legislature passed five bills that position Wyoming as a welcoming state for blockchain companies.

HB 19: Exempts virtual currency from licensing requirements.

HB 70: Exempts blockchain tokens from state securities and transmissions laws.

SF 111: Exempts virtual currencies from property taxation.

HB 101: Allows corporations to use blockchain to create, record and store records.

HB 126: Allows LLCs to form sub-LLCs that shield each from the risk of liability from the others.

DEVILS TOWER, Wyoming - Barbed wire fences cut across the grassy prairie of Campstool Ranch, stretching out under the watchful gaze of Devils Tower National Monument near Hulett, Wyoming. 

It’s branding day, and the cowboys and cowgirls here have kicked their spurs, lassoed their ropes and herded their cows and calves into a corner for vaccinations, branding, castration and ear tagging – the same way they have since the 1800s on this land. 

Today, in addition to the same hot-iron “DD” brand that generations of cows before them have received, these calves will come away with an extra piece of ear jewelry: a computerized blockchain tag that could revolutionize how ranchers keep records. 

High-Tech Meets Heritage 

“Branding and barbed wire are the original provenance tracking system for agriculture,” said Rob Jennings, an advisor to the Wyoming Blockchain Coalition. “This is high-tech meets heritage.” 

To an outsider, it appears not much has changed here on the Campstool Ranch since 1878 when Wyoming Sen. Ogden Driskill’s ancestors settled it.  

“Cows are cows,” Driskill said. “If you pull up an old black-and-white from the 1880s here on this same ranch, you’ll see exactly the same thing happening. It’ll look the same. Cowboys are dressed the same. Their horses look the same.”  

Ranchers have been innovating and moving their industry forward since day one, though. They constantly consider genetics, work to improve the health of their cattle and their land and are always on the lookout for technology to make their processes more efficient.  

Driskill, with support from the Wyoming Blockchain Coalition, helped draft legislation this year to attract blockchain technology companies to, and grow them from within, Wyoming. Additionally, Driskill volunteered his ranch and a herd of calves for a pilot project dubbed BeefChain.”  

In doing so, Driskill is leading what could become one of the next big steps in agricultural technology. As far as the pilot project participants know, this is the first instance of blockchain technology being applied to the beef industry in the United States.  

BeefChain 

“In the simplest terms, blockchain is a distributed ledger,” Jennings explained. “It enables us to have stored data in an immutable record that is verifiable by multiple parties. We’re making those records available and transparent.” 

Blockchain is the same technology powering up-and-coming innovations like Bitcoin and other cryptocurrencies. With distributed, public recordkeeping – as opposed to records that are kept on a single server in one centralized location – and complicated processes for making changes, it’s more secure, accurate, detailed and transparent than other methods of record keeping.  

In addition to cryptocurrency, blockchain technology has the potential for countless uses in Wyoming and worldwide, such as tracking government documents, improving the transparency of campaign finance, reducing healthcare costs by eliminating information duplication, and – as this pilot project aims to prove – adding value to Wyoming beef by tracking its origin from pasture to plate.  

Cargill used blockchain technology during the 2017 holiday season to track its Honeysuckle White brand turkeys. The hatcheries entered data including the genetics of the parent flock, facility sanitation, and transportation time and temperature. The poultry farm entered data on the turkey’s food and water, its housing conditions and its veterinary reports. The processor recorded its food safety control measures, microbiological testing results and packaging information. And the distributors and retailers entered similarly detailed data. The result allowed consumers to enter an on-package code into the Honeysuckle White website and see the farm on which their turkey was raised, the food it ate, the results of its veterinary care, how it was processed, the temperature at which it was stored on the delivery truck and the date it arrived at the local grocery store. The consumer didn't have to take one person's word for any of it; the data were verified, secure and encrypted. 

The BeefChain pilot project aims to offer similar detail for Wyoming beef. The first phase included tagging about 300 calves with radio frequency identification (RFID) chips, which are manufactured at Y-Tex in Cody, Wyoming, on the Campstool Ranch. handful of other Wyoming ranches will follow with their own calvesWyoming startup company, also called BeefChain, will handle the bookkeepingdata entry and coding, making the process simple for the ranchers themselves.  

The ear tags will provide “absolute verification from birth all the way until somebody’s plate on the table,” Driskill said. “(Consumers) are going to know where (the calves) were, how they were handled … any vaccines they may have had. It provides that level of safety to someone who really (wants to know) where their food came from.”   

While ranchers and the U.S. Department of Agriculture do already track beef in various ways, blockchain technology makes that data more transparent and accessible to the public, Jennings explained. It has the potential to add a higher level of trust along the supply chain; ranchers can verify they receive a fair price for their product, and consumers can verify the source, care and quality of their food.  

“(We want) people that are eating Wyoming-produced beef to know the quality and the value that was put into raising that beef,” Jennings said. “Blockchain enables us to track that." 

In addition, Jennings said he believes international markets, particularly in Asia, will soon expect this level of detail and transparency when purchasing, meaning blockchain-tracked beef may be more competitive in the international market.   

Everything is theoretical at this point, Jennings emphasized. The goal is to find out if customers are willing to pay a premium for high-quality Wyoming beef that comes with access to detailed, verified sourcing information to prove its quality.  

Premium Price for Premium Beef 

Mariah Ehmke, an associate professor of agriculture and applied economics at the University of Wyoming, said she was excited to attend and be a part of this pilot BeefChain branding. 

“It feels like work that I’ve been doing in the greater world is coming home to Wyoming,” she said. 

Ehmke is leading an international group of agricultural economists working to solve the “exploding issue” of food fraud – the illegal deception in the production and marketing of goods for economic gain, which often leads to adulteration of food products. For examplefarm-raised salmon being marketed as wild-caught salmon. Or, closer to home, grain-fed beef being marketed as grass-fed beef.  

It’s a rising problem that has cost the world billions; even more than the cost of the illegal drug market and the illegal trade of small arms, according to Ehmke. Everyone needs food, she explained, and consumers don’t tend to be on alert for fraud when they’re shopping for, say, a gallon of milk or a pound of beef. 

Blockchain technology can significantly improve transparency to prevent this type of fraud, and help ensure everyone along the supply chain is paid appropriately for their product. It could help Wyoming differentiate its superior beef and build a brand people trust. 

“You can’t get much purer beef than the beef we have here,” Ehmke said.  

Still, getting producers to embrace the technology and see its value has been a challenge, she added. 

“This is exciting because we’re not having to come from the top down and say, ‘Hey, producers, you need to do this,’” she said. “The producers are very interested, and they’re seeing the potential value in it.” 

Ranching is a tough business, putting producers at the mercy of middlemen and market prices.  

Driskill estimates there’s $500 to $700 added to each of his cows along the supply chain from the time he sells them to the time they end up on someone’s plate. Driskill added that he also competes against inferior beef from other parts of the country. 

“The highest quality, best tasting beef in the world comes out of a five-state areaWyoming happens to be in the center of it and has the best,” he said. “Range beef is really an art.” 

And yet, his beef is thrown in and sold with lower-quality beef, lowering its value and making it even more difficult for him and his fellow ranchers to stay in business. 

 

“Our beef is better; pay us the premium that our beef is worth,” he said. “We’re not doing a gimmick. We’re literally monetizing a better-quality product.” 

 

To survive, many Wyoming ranchers have turned their livelihoods to tourism-based industries, such as dude ranches.  

“We want to be ranchers,” Driskill said. “We don’t want to be dude ranchers. So, we’re really trying to find a way to hone our beef production and raise our value so we can provide a better living for our families.” 

Each blockchain ear tag costs about $1.80, and adds only seconds to the branding process. As the first project of its kind, no one knows for sure how much value the tags will add, but Driskill is hoping it will be enough to help ensure at least another eight generations can raise cattle on this land.  

“We’re in an exciting time,” Driskill said. “The technology is really happening. People are starting to take notice.”  

Agribusiness

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