January 24, 2013

Local, sustainable meat industry faces big challenges

Cattle grazing on pasture in Polk County.

by Nate Rafn
Salem Weekly

Pay a visit to any farmers' market in Oregon and you could easily assume that local ranchers are doing just fine. You might see your local pig farmer sitting at an attractive booth, interacting with customers and making sales. While it appears to be a rosy picture, Oregon's direct-to-consumer meat industry is actually dealing with several challenges that could put ranchers and slaughter facilities at risk.

Slaughter Facilities in Oregon:

Oregon is home to just 9 United States Department of Agriculture (USDA)-inspected slaughter facilities.

USDA-inspected establishments generally specialize in slaughtering or processing cattle, pigs, and lambs, although the volume and type of animals being processed varies from business to business. USDA inspection allows growers and processors to sell their meat products to the public.

According to a 2009 report by the Oregon Department of Agriculture (ODA), less than 5% of livestock raised in Oregon is slaughtered and processed here under USDA inspection.

Livestock represents $1.1 billion of Oregon's $5 billion agricultural economy. As of January 2011, Oregon's livestock inventory included 1.3 million head of cattle and calves, 670,000 dairy and beef cows, 264,000 sheep and lambs, and 13,000 hogs.

Jerry Gardner, Business Development Manager with ODA, would like more of Oregon's livestock to be slaughtered and processed locally.

"The fact is, four meat processors slaughter about 80% of all U.S. steers and heifers," says Gardner. "Improvements in technology... have made it possible to efficiently process large numbers of animals. Small-scale meat processors have not been able to compete."

The butcher shop at Pastaworks in Portland specializes in local beef and pork.

According to Gardner, Oregon's meat processing capacity is unable to match the volume of livestock produced by the state's ranchers.

"Oregon slaughter facilities probably process about 40,000 head per year," says Gardner. "That is about two weeks worth of production for larger plants in the mid-west."

With most slaughter facilities and butchers maxed out, Jim and Wendy Parker are forced to schedule their animals weeks in advance.

The Parkers own and operate Heritage Farms NW in Polk County. They raise heritage breed pork for local restaurants and individual customers. According to Jim and Wendy, their pork business is a complex balancing act.

Wendy mentions high transportation costs, long hours to make deliveries, and scheduling with overbooked slaughter facilities as primary challenges.

"Currently there are less than five of these processors in Western Oregon that will work with small farmers and all of them require hours of driving time to get there and back," says Jim Parker. "All of them currently seem to be at capacity."

B and D Meats, a USDA-inspected slaughter facility in Roseburg, Oregon, shut down last July. Gardner believes the closure was caused by a need for facility upgrades and insufficient cash to pay for them. Fortunately, B and D Meats is still operating it's retail storefront.

However, the Roseburg closure has had a ripple effect throughout the Willamette Valley. With one less USDA-inspected meat facility operating in the area, other slaughterhouses have to pick-up the slack, while small-scale ranchers, like the Parkers, are encountering long waiting periods to get their animals butchered.

The Parkers' complaints are echoed by David McKibben, cattle rancher and co-owner of McK Ranch in Dallas.

"We have to work with processors who are over-scheduled and have the USDA breathing down their backs all the time," says McKibben.

The view among many small-scale ranchers and meat-packers is that USDA regulations are simply too burdensome to promote a healthy local meat industry.

Lauren Gwin, Research Associate at OSU, says that these perceptions are long-standing and far older than the local food movement.

"First, there are certainly individual inspectors out there who can be difficult to work with, and smaller plants don’t often feel empowered to question or appeal decisions, even though they can and should," says Gwin. "Second, yes, regulations can be complex, but there are many small plants around the country who are handling them well enough. They are just a cost of doing business."

Food safety requirements are not going to ease up, says Gwin.

Rendering Capacity:

On-farm livestock mortalities and meat processing byproducts are generally taken to a rendering plant, where they are converted into stable, value-added products such as tallow and bone meal.

Since the 1960s, Oregon has had two rendering plants that largely handled animal mortality and meat processing byproducts resulting from butchering of livestock and game. Redmond Tallow and Southern Oregon Tallow both closed in 2006.

The closures were due to several factors, including an inability to modernize equipment, low prices following a "mad cow" scare in 2003, and a failure to achieve needed economies of scale.

With no rendering plants currently operating in Oregon, slaughter facilities and meat processors have two options for disposing of animal byproducts.

Materials are currently being shipped to rendering plants in Washington State, Idaho, and Northern California. This is largely seen as unsustainable, due to increasing fuel costs.

Landfill disposal of animal byproducts is allowed at approximately 13 locations in Oregon. This is also a short-term solution that Oregon's Department of Environmental Quality is working to address.

The expansion of rendering capabilities throughout the 20th century was responsible for the profitable utilization of animal byproducts. Without modern rendering technologies, America's massive meat industry would not exist as we presently know it.

For Oregon's sustainable meat industry to thrive, we need in-state rendering to make it happen.

Moving the Industry Forward:

The numbers from ODA suggest that most of Oregon's cattle ranchers are selling livestock "on the hoof" to companies that operate slaughter facilities and feedlots outside state lines. Jerry Gardner calls these ranchers "price takers," a term that is not inherently good or bad. It just means that prices vary and ranchers don't have much say in it.

David McKibben was a "price taker" for many years, running a cow-calf operation.

"Cow-calf did not produce enough annual income to meet the expenses of the farm," says McKibben. "Direct market allows us greater flexibility to derive more income per beef. We are not at the mercy of the cattle buyer."

Direct marketing offers its own unique demands. But it gives ranchers in Oregon an opportunity to increase their profit margin.

"Consumers are the key ingredient," says Jerry Gardner. "Unless consumers are willing to seek out locally produced and processed meat products, and unless they are willing to pay for this service, small-scale meat processors will struggle to compete. A certain segment of the population is willing to support local producers and processors. This segment is small but growing."

Jim Parker sees the deficiency in local USDA-inspected meat processing as part of a transition period in a broader movement favoring local foods.

"When our meat industry started going to [feedlots], the need for local processors went away," says Parker. "Now with the 'buy local' movement growing... we have maxed out the few processors that are still around. If we are to continue to buy local we also need to be able to process local in order to keep costs down."

In the meantime, Jerry Gardner is working with entrepreneurs who are interested in Oregon's meat industry. Lauren Gwin does the same, working with OSU on a website that provides detailed information on the business of meat processing.

Nate Rafn is the executive producer of Living Culture, and creator of Dinner at the Rafns' supper-club. Learn more at www.livingcultureonline.com and www.dinnerattherafns.com.

1 comment:

  1. Nate, this was a really interesting article. We buy all our meat direct, and I had not idea how complex this is.


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