Christopher Brown's questions to Where Food Comes From (WFCF) leadership • Q2 2024
Question
Christopher Brown asked about the business impact of the USDA's final rule mandating RFID tags for its Animal Disease Traceability (ADT) program, inquiring about its effects to date, the company's internal adaptations, and the outlook for the next year.
Answer
CEO John Saunders responded that the rule has spurred a migration of customers to compliant '840' tags. He noted that while tag revenue has been negatively impacted by government subsidies providing free tags and smaller herd sizes, this has been offset by growth in verification revenue. Saunders explained that Where Food Comes From has adapted its technology to allow producers to integrate these free tags into its system for a fee. He projected a 3-to-5-year timeline for the subsidies to end, after which the company would be well-positioned to capture the expanded market of producers required to use electronic tags.