Publish Date: Summer 2013
As interest in local meat and poultry grows, farmers and others point to processing as a key bottleneck, calling strongly for new plants to be built. Yet building more meat processing plants won’t yield more local meat unless farmers and processors change how they do business with each other, according to a new report. “Farmers and ranchers say, ‘There aren’t enough processors.’ But how can processors stay open, let alone grow, without enough steady, consistent business to pay their bills?” said lead author Lauren Gwin, a researcher with the OSU Small Farms Program. “‘I’ll call you when I need you’ is convenient in the short term but doesn’t give either side any long-term stability or growth.”
The report, “Local Meat and Poultry Processing: The Importance of Business Commitments for Long-Term Viability,” analyzed challenges and innovations in local processing, focusing on seven successful processors around the U.S. Gwin and co-author Arion Thiboumery, an Extension associate at Iowa State University, found that long-term business commitments between processors and farmers were essential to success.
“If farmers, on their own or in coordinated groups or brands, commit to bringing a steady supply of livestock, processors could then commit to providing consistent, high-quality services,” Gwin said. “When processors have committed business, they know they can cover their costs, which allows them to maintain and – we hope – expand what they can do.”
Gwin and Thiboumery found different examples of commitment in practice. For Lorentz Meats and TFC Poultry, two Midwest processors, a few anchor customers provide most of their revenue. This allows them to process for small farms that bring far fewer animals each year, and only seasonally.
Island Grown Farmers Cooperative is known for running the first USDA-inspected mobile slaughter unit. Yet perhaps more critical to its success and staying-power is that all members commit to slaughter dates a year in advance, even for livestock not yet born. Smucker’s Meats has an active scheduling system with a waiting list, to make sure the inevitable cancellations are immediately filled.
Commitment goes both ways: for example, Smucker’s Meats and Heritage Meats help their farmer customers with marketing and distribution. More business for farmers can become more business for processors.
“Without local processors, you simply have no local meat,” Thiboumery said. “We even saw examples of farmers investing financially in their processors – helping them add needed equipment or improve services.”
Gwin and Thiboumery also examined efforts around the country where nonprofits, universities, and state and local agencies are working together to provide technical assistance to local processors and their farmer-customers. Casey McKissick, Director of NC Choices in North Carolina, explained his group’s approach: “we get all these calls about business plans for new processing plants. But what about the plants that are already in business? What can we do to support them?”
The USDA’s Economic Research Service published the findings this week at http://1.usa.gov/17nmjGl under a cooperative agreement with Gwin and OSU. The Niche Meat Processor Assistance Network, led by Gwin and Thiboumery, published a version of the report with policy recommendations, including technical assistance for processors and farmers, clarification of specific regulations, and targeted public investment. NMPAN is a national eXtension network, based at OSU, which includes university extension faculty, federal, state, and local regulators, nonprofits, farmers and ranchers, and processors. NMPAN provides technical assistance and information about meat processing for local and regional markets.
Funding for the report was provided by the U.S. Department of Agriculture.