New Poultry Processing Options in Oregon

Author: Lauren Gwin, Department of Agricultural & Resource Economics, Oregon State University

Publish Date: Summer 2011

You may have heard about “the chicken bill,” passed by the Oregon legislature and signed by the governor on May 19th, 2011. All the details are not yet worked out, but this new law should give very small poultry growers more options for processing and selling their poultry of any type.

What the new law says

HB2872 allows a person to process and sell up to 1000 poultry per year without being licensed by the Oregon Department of Agriculture (ODA) as a slaughter or processing establishment. The poultry must be raised by you, from eggs or from chicks you buy when they are no more than two weeks old. You can only sell these birds direct to end consumers, from your farm. Restaurants may want to buy “direct” from you, but they are not end consumers; restaurants must buy from licensed processors.

However, “no license” does not mean “no rules.” If you want to process and sell poultry under this law, you’ll still have to follow federal, state, and local (city/county) laws and regulations around sanitation during processing, disposal of wastewater and offal (which could be through composting), recordkeeping, and even location (county zoning rules still apply). The OSU Small Farm Program is working with ODA on a simple guidebook that explains the rules, some of which remain to be resolved in ODA’s rulemaking process for the new law.

People who followed the bill’s progress – in favor or in opposition – may be surprised to learn that the new law does not actually exempt a processor from all license requirements. The statute itself states that ORS (Oregon Revised Statutes) 619.026 still holds: establishments, including all equipment, “shall be kept in a clean, healthful, and sanitary condition.” At the bare minimum, this means equipment is cleaned at least daily; meat and meat products are securely protected from flies, dust, dirt, or other contamination; people doing the processing have clean clothes; and organic waste matter is removed daily.

The statute also confirms ODA’s authority (ORS 619.046) to make additional rules. ODA will determine what “securely protected” looks like in practice. You probably won’t have to build a processing facility that meets all the state building and sanitation requirements (e.g. four walls, floor and roof, no open windows, etc.). It is not yet clear whether farmers’ market sales will be allowed. These items will be worked out during rulemaking.

Why a new law?

The original intent of HB2872 was to allow very small scale poultry producers to process small numbers of their own birds for direct, on-farm sales without spending a lot of money on a “bricks and mortar” processing facility that would meet state licensing requirements (again: four walls, floor, roof, no open windows, etc.).

Until very recently, state regulators interpreted federal poultry processing regulations very narrowly: to raise and sell poultry, you had to process it under USDA inspection or in your own state licensed facility (operating under the producer- grower 20,000 bird/year limit federal exemption). Even USDA inspected plants are required to have a state license, but here I use “state licensed” to refer to plants that are operating under one of the federal exemptions from continuous, bird-by-bird inspection. They are inspected at least annually by ODA inspectors for compliance with building/sanitation requirements.

That narrow interpretation was too tight for many would-be small-scale poultry marketers to squeeze through. Building a state licensed facility hardly makes economic sense for a grower who raises and sells a few hundred or even 1000 birds per year. USDA inspected processing on a fee-for-service basis for an independent grower is virtually non-existent in Oregon. Scio Poultry bravely struggled through the long and difficult process to become USDA inspected, only to find that not many growers were willing to pay the actual cost of inspected processing; for inspection earlier this year.

By the time HB2872 was first taken up by the Oregon legislature, ODA came to accept a new interpretation of federal law. A grower can take her poultry to a state-licensed processor, who buys the birds, processes them, then sells them back to the grower, who is then acting as a distributor and can sell them on to her customers.

We won’t get into all the details here, but suffice it to say, HB2872 has become somewhat less critical. Yet it will probably be useful to producers who are still far away from even state-licensed poultry processors. 

Next steps

ODA will likely begin the rulemaking process this summer. We’ll write about the results – and tell you when the Small Farms Guidebook to Small-Scale Poultry Processing is available – in a future issue of Small Farm News.