September 18, 2015
If ranchers are selling cattle for $2 a pound, and grocery stores sell it for $8 a pound, an obvious way for ranchers to make more money seems to be to cut out the middle man and market the beef himself. That solution isn't as simple as it sounds, but new legislation might make it a little easier.
Current federal law says "custom exempt" meat-packing houses can only provide the service of processing meat. These smaller plants that do not have a federal meat inspector on-site at all times are prohibited from selling meat, and the meat they process can be consumed only by the owner of the animal, their immediate family or non-paying guests, according to the Minnesota Department of Agriculture website. That rules out selling the meat to restaurants, farmers' markets or privately by either the plant or the owner of the animal.
H.R. 3187, sponsored by congressman Thomas Massie (R-KY), and congresswoman Chellie Pingree (D-ME) is designed to take the oversight authority of custom exempt plants away from the federal government and place it in the states' hands. Also known as the PRIME act, the legislation would amend federal law to allow each state to determine what rules the custom exempt plants in their states should follow, and whether or not they could be approved for processing meat destined for retail.
"As a producer of grass-fed beef, I am familiar with the difficulties small producers face when marketing directly to consumers," said Rep. Massie, in a news release. Massie owns 50 head of cattle. "Despite consumers' desire to know where their food comes from, federal inspection requirements make it difficult for them to purchase food from local farmers they know and trust. These onerous federal rules also make it more difficult for small farms and ranches to succeed financially. It is time to open our markets to small farms and producers and give consumers the freedom to choose."
Pingree also raises cattle and she touts consumer demand for locally-raised and processed beef as a main reason for sponsoring the bill.
North Dakota's only congressman, Rep. Cramer has signed on to the PRIME legislation. Cramer said he supports the concept and the legislation. While Rep. Noem (R-SD) has not signed onto the bill, she is looking further into it, and Rep. Lummis (R-WY), continues to examine and carefully consider this legislation, according to a staffer. Other regional congressmen were unavailable for comment.
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Ranchers and farmers who want to market their own home-raised beef might not mind the idea of using a federally-inspected plant to process their animals, but the relatively small number of processing plants that are federally inspected, and the even smaller number that are willing to work with small-scale producers can make it impractical.
In Wyoming, there is just one such plant. South Dakota has five or six. Nebraska has more than 20 but several are corporate-owned by JBS, Hormel, Tyson and the like. Such plants are not available for a small operator looking to market his or her own beef.
Mimi Sidwell, who operates JX Ranch Natural Beef along with her husband Tom, near Tucumcari, New Mexico, said they use two different packing plants. A local "custom" plant slaughters and packages the beef they sell "on the hoof," which amounts to about 40 head of steers for about 80 customers each fall, she said. That beef is already owned by the customer, who purchased a whole, half or quarter of beef before the slaughter occurs. The beef cannot be sold in a retail setting, but must go directly to the owner.
Additionally the Sidwells take cattle to a USDA–inspected plant about two and a half hours away, in Texas, for retail processing. This beef can be sold anywhere in the country because it is processed in a federally-inspected facility. Mimi said she maintains a large e-mail list of customers, who she alerts when she plans to travel to a nearby city. They can place an order for beef that she will then deliver to a central point.
Roger Hick, manager at the USDA-inspected Sturgis Meats, in Sturgis, South Dakota, said he favors state, rather than federal oversight in most all situations. He doesn't support this legislation as written, however, as he worries about the ability of some states to regulate their own industries. "There are very reputable meat processing plants out there. But not all of them."
His biggest focus is keeping his customers healthy and safe, Hick said. "In this industry food safety is number one."
Craig Erickson, part owner in Erickson's Meat Market, Bowman, North Dakota, said his custom exempt plant utilized federal inspectors at one time but the paperwork load became too expensive. Now his business is inspected about once every three months to maintain his license.
"Most of our business is the custom slaughtering," he said. He and his staff can slaughter about 20 beef per week now, whereas with the rules and papework required under the federal inspector, they could manage only eight or nine.
Local customers are able to purchase halves or quarters of beef from a local cattleman while it is still on the hoof, and have it processed at his plant, Erickson said, but he is not able to sell any beef unless he buys it already inspected, from IBP, for example.
"I like the idea of being able to sell local beef. People want local access and I'd like to be able to provide it, but I don't foresee it going back to where a custom exempt plant can sell meat piece by piece," Erickson said. "I can't badmouth the inspection. I think we need it. We've got a real clean place and we always keep up to par on it." While he said having an inspector "looking over his shoulder" can be an inconvenience, he also likes to have the third party to verify that he is not overlooking anything, sanitation-wise.
"I'd hate to just have some Joe Blow cutting meat and selling it from his garage," Erickson said.
Sidwell believes states should have oversight of their own meat plants. "I don't see anything wrong with it. Any time we can put more power in the hands of the states, and less in the hands of the feds, it is a good thing."
While she considers herself pretty lucky in that regard, Sidwell said some ranchers in her region marketing their own beef have to travel at least five hours to a federally-inspected meat plant.
Hick believes the massive amount of paperwork required is enough to discourage most smaller processing plants from seeking a federal inspector. "There is a ton more regulation that goes into being able to sell meat. They have to operate within a Hazard Analysis Critical Control Point, or HACCP plan which basically makes you look at your system and find its shortcomings – generally at the packaging point, because that is the warmest point," he explained.
Hick said he had just spent four days writing the humane handling program plan for his company, which consists of about 18 pages. His plant, which serves as a regional office for the USDA FSIS inspectors houses three such regulators – one oversees the slaughter floor, one watches the processing and one is a regional director.
While some states, like South Dakota, maintain their own inspectors, some – like Kentucky – do not, Hick explained.
He has never worked at a larger processing plant, but Hick said he believes they are able to use better technology and implement more expensive but efficient processes. "They are like streamlined machines. The smaller plants don't have money or resources to have some of the more expensive equipment," he said.
While Hick doesn't see the PRIME act as a threat, he also doesn't believe a lot of "custom exempt" plants will end up selling beef, and he said uninspected plants would have the unfair advantage of little to no paperwork being required.
"I think if they are going to process meat they need to follow the rules," he said.
The legislation could end up threatening public safety, Hick believes, because while states enforce adequate state inspection and would conscientiously enforce strict safety regulations, some may not. "There are too many operators out here that might take advantage of the situation. But this is a self-regulating industry where your customers don't return if you sell a poor product."