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We examine the impacts of adopting animal identification and tracing systems on the U.S. meat and livestock industry. Using a multimarket equilibrium displacement model, we find that a modest increase in domestic demand for beef would offset the costs of an animal identification system. Similarly, an increase in beef export demand equivalent to Japan's beef export market share prior to the 2003 U.S. discovery of bovine spongiform encephalopathy would offset animal identification system costs.