No excess room at small plants
Representative Thomas Massie (R-KY) and Representative Chellie Pingree (D-ME) re-introduced the PRIME (Processing Revival and Intrastate Meat Exemption) again this year. The two have introduced the bill in the past, but haven’t succeeded in passing it.
The bill would loosen regulations to allow meat such as beef, pork or lamb from custom kill plants (not state or federally-inspected) to be sold to consumers, restaurants, hotels, boarding houses, and grocery stores.
Ranchers can currently sell animals to customers, while the animal is live. The rancher or customer can then deliver the animal to a custom plant for butchering. But neither the rancher nor the customer can sell that meat piece by piece if it was slaughtered at a custom plant.
Currently meat must be slaughtered at a state or USDA - inspected plant in order to be sold piece by piece (not in a whole, half or quarter carcass) across state lines. Meat butchered at a state inspected plant can legally be sold within said state, but some states, like Nebraska don’t have a state inspection program.
Even at USDA-inspected plants, not every carcass is inspected, but the federal inspector and the plant follow certain protocols and the inspector looks at and tests a certain percentage of the meat.
The PRIME Act would potentially give ranchers another option for marketing their meat, and would give local restaurants, grocery stores and other food service establishments the ability to more affordably source local meat. With custom plants reportedly already over-full and over-booked, they may need to expand staff or hours to meet added demand. R-CALF USA supports the PRIME Act.
With many grocery stores struggling to fill their meat counters, packing plants closing and slaughter numbers down, many consumers are seeking out cattle producers in order to purchase meat direct from the source. But many are now finding that while there is no shortage of fat cattle there is a major shortage of custom processing facilities left in the county. Many of them are booked six to eight months in advance.
Ranchers often arrange a slaughter date before they even start fattening the cattle. Forty or fifty years ago, almost every little town had a small packing plant, but during the seventies and eighties the majority closed their doors, say local ranchers. As the large meat packing plants expanded, so did the regulations and inspections required. The small mom and pop plants were often in old buildings and couldn’t keep up with the new regulations. Decreased demand played a part as the small rural communities grew smaller when the younger generation moved away.
Kim Ulmer owner of Huron Continental Marketing in Huron, South Dakota saw the huge need for independent slaughter facilities as the main beef packers continue to make record profits while cattle producers lose money. He along with thirteen other individuals purchased the old Bad River Pack building in Fort Pierre, South Dakota, which had been USDA certified back in the 1970s. The new packing house is called U.S Beef Producers. “Right now we are seeing record high meat prices at the store, record setting losses for cattle producers and record setting profits for the packers. If it keeps up there will be no producers left. We have to get in the business if we want to keep raising cattle. This has been a different challenge for me, to wake up and learn a new industry. Joe Reints is one of our investors and has been working beside me to clean, disinfect, paint rails and learn beef processing. Steve Kost of Dakota Prairie Bank and Kyle Peters of South Dakota Economic Development put together 250,000 dollars to help us, once we had half the financing,” Ulmer said. “We needed someone to accept the challenge, it was a risky investment on a business that wasn’t even open yet, but Steve is a rancher and believed in our plan.”
He also credited South Dakota governor Kristi Noem and David Borde of Fort Pierre Economic Development for getting behind the project. “The packers are showing their greed, the mistake we made was we let the government regulate us out of business, the USDA manual they sent me is 504 pages long, strict is ok but they should send someone to help us understand it. We should be regulated into business not regulated out of business.”
The plant is now South Dakota Custom Kill certified and plan on being USDA certified by June first. They currently are doing custom processing as they learn the business. The plant is hoping to be processing fifteen head a week by then and increasing the numbers over the summer. U.S Beef Producers will market the beef as producer to plate or producer to grocery store. The partners don’t want to see producers go out of business and as an auction owner and buyer Ulmer hopes to help his customers by giving them the opportunity to market their own beef. “There is a shortage of kill floor space, nothing can happen without it. We are setting up this up first and learning the business and hope to franchise the system.”
Dakota Packing Co, in Hettinger, North Dakota is one custom plants turning down business every day. “Everybody is out at least two to three months. There just are not enough of us little guys left in the country. I turn down at least five or eight head a week, I just don’t have the time. It’s not a job very many folks want and nobody wants to work, it’s hard to find help,” said Ed Verhulst, owner of Dakota Packing Co. “Equipment costs for meat packing is outrageous, it’s high maintance, we use a lot of hot water and electricity and there is not much profit left in meat packing. Meat processing is a lot like milking cows, it has to be on a schedule and it has to be done. I’ve been doing this for 45 years, I don’t need any more money, I need someone to work.”
Verhulst recommends that people call their local meat processors and get on their list, he also mentioned that with the panic buying chest freezers are hard to find. “We need young guys to learn the business and then go build a new plant, there are government funds to help with the costs. We need more small meat shops around the country.”
The Butcher Block is a small custom meat processing plant in Mullen, Nebraska, it is run by Doug and Betty Deibler, the couple has been involved in meat processing for nearly forty years. “We can’t handle more work, I turn down calls every day. We can’t find good workers so it’s just us,” Betty Deibler said. “The regulations are getting worse and its hard work.”
They also purchase boxed beef to sell retail, do some catering and have to deal with inspectors for every aspect of their business.
Herman Schumacher of Herreid, South Dakota operates LDL Cattle Company a 10,000 head feed yard that sells the majority of their cattle to DemKota Ranch Beef in Aberdeen, South Dakota. DemKota processes quality meat for both local and international markets. They have several different brands of beef and are able to process 1,500 head a day in their state of the art facility, but have cut back some production now due to the virus causing a shortage in workers.
“We have tried to put the entire food supply through a very narrow pipeline. When one plant shuts down it disrupts the entire supply and has a ripple effect. The USDA says we are over producing yet 20 percent of our beef is imported. There used to be a butcher shop in every town and they were regulated out of business and we all went to Walmart. Now our little grocery store has never been busier and we are seeing people looking out for each other,” Schumacher said.
Roger Huck, plant manager at Sturgis Meats in Sturgis, South Dakota is already booked for processing through the middle of August. He feels that most of the backlog is due to a lack of qualified help and that the country needs more plants, especially more inspected plants. “It’s going to help our business, people are wanting meat and will go anywhere to get it. It cost me more to process a beef than the big packers, we aren’t a beef factory. I can’t compete with the grocery stores on retail beef since we are a manufacturing plant,” Huck said. “We need more kill and more people, nobody out there is training except the small plants. I’ve cut back on our hanging time and added to our kill schedule, we can process around 32 to 35 head of beef a week. Life is a cycle, I have to be able to get the finished product out the front door to be able to bring more in the back door. But people are getting tired of waiting, if they go somewhere else that is money we won’t be able to make. And I have 22 employees relying on me. I hate to say it but we need more competition.” F
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