Livestock production contributed nearly $123 billion to the U.S. economy in 2006. In response to concerns about animal disease outbreaks, the U.S. Department of Agriculture (USDA) announced in December 2003 that it would implement a nation-wide program -- later named the National Animal Identification System (NAIS)-to help producers and animal health officials respond quickly and effectively to animal disease events in the United States. In this context, the author determined (1) how effectively USDA is implementing NAIS and, specifically, the key issues identified by livestock industry groups, market operators, state officials, and others; (2) how USDA has distributed co-operative agreement funds to help states and industry prepare for NAIS and evaluated the agreements' results; and (3) what USDA and others estimate are the costs for USDA, states, and industry to implement NAIS. In conducting its work, the authors reviewed USDA documents; interviewed agency, industry, and state officials; and consulted 32 animal identification (ID) experts.this is an edited and excerpted edition.