Some states are addressing the bottleneck in the industry by allowing state inspectors to approve direct-to-consumer and interstate sales. And new federal legislation could make those efforts possible nationwide.
This time last year, Tyrone Gustafson’s small Iowa slaughterhouse and butchering facility, Story City Locker, was operating at about 80 percent capacity. Today, he estimates the demand has surged to approximately 120 percent and his slaughter and butchering schedule is booked out through the end of 2021.
“[The pandemic] changed everything,” Gustafson said. “We had a lot of farmers that would take a majority of their livestock to the commercial processors, the big guys, but they had so many friends, neighbors, and family members contact them wanting to buy directly from them. We’re working overtime to try and keep up with the demand that exists from people buying direct, buying in bulk, just wanting to know where their food comes from.”
Business is also booming, in part, because the U.S. Department of Agriculture (USDA) opened up new sales channels for Iowa farmers who use the slaughterhouse. Iowa joined a federal program earlier this year allowing farmers and ranchers to sell animals slaughtered under the supervision of state inspectors across state lines, bypassing a logjam created by the limited number of USDA-inspected slaughterhouses. The program allows Story City’s customers who farm in western Iowa to sell their meat at the bustling Omaha farmers’ market just a few miles across the border, an example of the type of regionalized food economy that the program aims to promote.
Iowa is one of eight states admitted to the Cooperative Interstate Shipment program and one of 27 authorized for state-inspected slaughterhouses. Both programs of the USDA’s Food Safety and Inspection Service (FSIS) were designed to address a narrowing bottleneck in meat processing. Meanwhile, state and federal lawmakers are pursuing new grants and other regulatory fixes to spur a revival of small slaughterhouses. Their efforts are timely as the pandemic has highlighted the shortcomings of a long and consolidated food chain and prompted more consumers to seek locally produced food.
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“I think the ideal model would be to adopt real, trustworthy inspection in the states, with local veterinarians, vet techs, and animal science grads providing inspection, allow trade among states, and let USDA, with their essentially non-inspection model, and emphasis on serving big multinational corporate interests, worry about imports and exports,” said Mike Callicrate, a Kansas-based cattle rancher and advocate for rural communities.
Policy Solutions for a Lopsided System
The widespread consolidation in the meat industry—four firms control more than 80 percent of the beef processing market, for instance—and federal laws requiring large animals to be processed at a slaughterhouse under the supervision of a USDA inspector have left many small meat producers in a bind.
There are approximately 800 federally inspected livestock slaughterhouses in the U.S. and about 1,900 state-inspected or custom facilities. That’s down from nearly 10,000 meat processing plants in 1967, when the law mandating USDA inspection was passed.
As the pandemic has shone new light on the failures of this system, U.S. representatives Chellie Pingree (D-Maine) and Jeff Fortenberry (R-Nebraska) are aiming to encourage the development of more small- and medium-sized meat packing plants. In late September, they introduced the Strengthening Local Processing Act (SLPA) to do just that.
When outbreaks of COVID-19 in large meatpacking plants led to temporary closures, it resulted in pork and beef shortages in stores and farmers having to euthanize their animals, Pingree says, “It became painfully clear that sometimes it’s better not to have everything consolidated.”
“That said,” adds the Congresswoman, “there was this whole interest in people looking around their own communities, their states, their rural areas and saying, ‘Why not support my local farmers at this moment in time?’”
The SLPA would increase funding to help states to create their own, federally exempt, inspection processes. Currently, states can apply for an exemption to the federal law if they prove their own inspectors adhere to the same standards as the USDA, but that meat can’t be sold across state lines without separately applying for the Cooperative Interstate Shipment program mentioned above.
While they await changes at the federal level, several states have also launched supplementary programs to expand local meat processing.
Wyoming passed a law this spring allowing ranchers to sell cuts of meat direct to consumers without the need for USDA-inspected slaughter. Wyoming ranchers can now sell shares of a herd of livestock and then allow those shareholders to buy cuts of meat when the animals are processed. The law is a creative way to scale rules that allow farmers to bypass inspection requirements by selling live animals to customers before they are slaughtered, but it has some limitations. Ranchers can only use the law to sell meat directly to consumers in the state; meat sold at retail and restaurants still has to be processed under the supervision of a USDA inspector.
Iowa launched a grant program in August with $2 million in CARES Act funding to increase small-scale meat production in the state. Meat processing plants with 25 or fewer employees can apply for funding to cover a variety of expenses, including the cost of upgrades necessary to qualify for the interstate sales program or shift to a direct-to-consumer sales model. Story City Locker applied for equipment upgrade grants and expects to hear back by the end of the year.
An advocacy campaign by the nonprofit Rural Vermont also succeeded in changing state laws governing on-farm slaughter last year. Under the amended law, farmers can sell a living animal to multiple customers, then have it slaughtered and processed onsite or in a custom facility. Prior to the change, Vermont law prohibited ranchers from selling one animal to several customers, a rule that landed Rural Vermont policy director Graham Unangst-Rufenacht in hot water a few years back.
He raised small herds of grass-fed cattle for years before joining the organization, selling or donating the meat in his community. When state inspectors discovered he had multiple buyers per head of cattle, they put a freeze on his slaughtered animals. Ultimately, the state agreed to allow the sales to go through after contacting each customer and fining Unangst-Rufenacht $750. He says the experience helped him see how daunting the complex regulatory environment can be for small-scale livestock farmers who aren’t well-versed in policy.
“Awareness of how to do this art and practice of taking life in this way, in our community, and being able to sell that to your neighbors, that type of community-scale food sovereignty and resilience is important,” he said.
Despite creative policy-making in some states, the options for small livestock farmers across the country remain limited. Roughly half of U.S. states do no alternate routes for meat processing, forcing farmers to take their animals to a small number of USDA-approved slaughterhouses or sell them to large producers.
“We definitely need these other facilities,” said Temple Grandin, professor at Colorado State University, author, and leading livestock welfare advocate. “In some places, getting USDA inspectors is really difficult because they might only be slaughtering one day a week. What I would do is work on getting state inspection really, really good because it’s very important.”
Photo courtesy of George Page.
George Page would slaughter his large animals on the farm where he raised them, if he could. Instead, about every other week, Sea Breeze Farm loads hogs, steer, and sheep into a trailer and trucks them from Washington state to an Oregon slaughterhouse 200 miles away. It’s a stressful final day for animals raised humanely on pasture up to that point, and it costs Page a few thousand dollars a month on top of normal expenses.
“Almost all of the Washington state slaughterhouses have gone out of business,” Page said. “There were a few in the first 10 years that I was doing this, but they’ve all closed. There are incredibly few options.”
The SLPA aims to expand those options across the country. It would create grants for small-scale slaughter facilities and fund training programs to grow the number of professionals with the skills needed to process meat. Pingree doesn’t think the legislation is likely to move forward this year, but pledged to re-introduce it next year if she and Fortenberry are re-elected. She is also looking at opportunities to include the same language in the next farm bill.
Small farm advocates say the legislation is a step in the right direction, but falls short of solving the underlying challenge.
“Getting more money for state processing would be fantastic, and we would support that, but allowing more sales out of custom facilities would help even more for a couple of reasons,” Alexia Kulwiec, executive director of the Farm-to-Consumer Legal Defense Fund, said.
Currently, the USDA only allows custom slaughterhouses to process animals for personal consumption by their owner. If the agency were to begin allowing these facilities to be used for commercial sales, that would be a game-changer, she added. “Our members would be driving much [shorter] distances, which is better for their transportation costs. It’s better because it doesn’t stress out the animals, and usually farmers and producers feel that they have a stronger say in exactly how meat gets processed there.”
Another bill first introduced in 2015 called the Processing Revival and Intrastate Meat Exemption (PRIME) Act would also allow for that change. The bill’s sponsors re-introduced it this year as the pandemic underscored the problems created by a consolidated meatpacking industry.
Taken together, the two bills would remove some of the barriers to regionalizing meat packing, but change at the federal level is difficult due to the industry’s influence. The National Pork Producers Council is ardently opposed to the PRIME Act, for instance.
“The PRIME Act is very bipartisan and we’ve had a lot of interest in it during COVID-19, but it messes with the status quo and sometimes it’s not a partisan issue in agriculture, it’s a status quo issue where the resistance is,” Pingree said. “We won’t back down on that. We don’t put the same language in the PRIME Act into [the SLPA], we just try to look at a variety of other things that we could do.”
Even if federal legislation does move forward, it remains to be seen whether the missing middle of small- and medium-sized slaughterhouses will return to the levels seen in the 1960s. Slaughter is difficult work and overhead costs are high. Gustafson was turned away by several banks when he approached them with his idea for Story City Locker before he finally found one saw the value in a small meat processing operation.
“We took all the retirement [money] that we’d built up for 20 years and that still was barely enough to cover the initial cost of a down payment to build the building and to buy the equipment to start the business,” he said. “Capital is the biggest challenge.”