Outbreaks presents opportunity; livestock producers to sell locally
Fri, 06/19/2020 - 9:26am classified@mont...
The COVID-19 outbreak has coincided with a demand for locally-sourced meat, according to Dr. David Fernandez, Extension livestock specialist and interim dean of graduate studies for the University of Arkansas at Pine Bluff.
Livestock producers who are planning their fall marketing strategy can consider selling their meat locally to take advantage of the opportunity to capture more of the retail dollar and develop customer loyalty that will last after the pandemic.
“The pandemic has caused a lot of people to start looking for locally-sourced meat because the traditional production and distribution system involving large slaughter and processing units is having difficulty keeping up with demand,” he said. “As employees at these facilities become infected and cannot come to work, or as an outbreak occurs in a plant and the plant has to be shut down, disruptions are caused in the meat supply.”
Because of these industry challenges, consumers are increasingly buying from farmers markets and small grocery stores that source local meat products. This represents a great opportunity for producers to capture the retail price of their meat and even charge a premium price, Dr. Fernandez said.
“The popularity of farmers markets continues to increase as consumers shop for quality, locally-sourced products,” he said. “By including local and regional farmers markets as part of their marketing plan, producers have the opportunity to develop brand recognition, which could translate to reliable sales year after year.”
Dr. Fernandez said those who want to sell meat at farmers markets are required to slaughter and process their animals under U.S. Department of Agriculture (USDA) inspection.
According to guidelines by the Arkansas Department of Health and Arkansas Agriculture Department, after commercial slaughter under USDA inspection, pre-packaged meat products must be passed and labeled. Each item sold must be commercially packaged and correctly labeled (including common name of product, net weight and USDA safe handling instructions) and bear the mark of USDA inspection, unless exempt. All products must be kept frozen and kept in freezer units capable of keeping all products frozen until sold.
“When considering whether to sell meat at farmers markets, producers will need to take into account the time and travel required,” Dr. Fernandez said. “You have to be available on market days, and you have to travel back and forth to the market.”
At the market, producers will need to have cash on hand to make change and must be able to deposit the money they earn. Many farmers markets now have the ability to process credit cards.
In addition to farmers markets, producers can consider marketing their meat to local retailers such as international grocery stores and restaurants or Halal or Kosher markets, Dr. Fernandez said.
“You have to have the type and quantity of animals the businesses require either year-round or during specific holidays,” he said. “These retailers are often networked to similar retailers nearby, which can expand your market. Again, you also have to be able to have your animals slaughtered and processed under USDA inspection.”
Another marketing option for producers is to offer their animals directly to the public through on-farm sales. In this case, producers must be prepared to negotiate directly with the end consumer. They will be able to capture more of the retail price of the meat, but they must have the type of animal the consumer wants on hand when they want it.
Dr. Fernandez stresses the importance of checking state and local regulations about the sale and slaughter of livestock on one’s own land because the regulations differ between states and change periodically. Selling meat that has not been slaughtered under USDA inspection is a federal crime and the government prosecutes those who violate this law.
“Arkansas farmers can only sell live animals on their property – unless they have had their animals slaughtered under USDA inspection,” he said. “And it is illegal for producers to sell a live animal to someone then help the new owner slaughter and process the animal on-site. Those who violate this law can get into a lot of trouble.”
USDA exempts processing of red meat (cutting it into retail cuts or wholesale cuts) if:
• a producer sells less than a certain dollar amount. In 2019, the limitation was $75,700. Updates on limitations can be obtained by contacting the USDA Food and Safety Inspection Service at (202) 447–3219.
• as long as the meat is not canned. Canned meats must be produced under USDA inspection.
“If producers meet the exemption clauses, they could technically process meat in their own ‘commercial kitchens,’ facilities that abide by strict regulations by the Arkansas Department of Health,” Dr. Fernandez said. “However, these facilities cost at least $25,000 to build, making them prohibitively expensive considering the exemption threshold. It’s possible that a number of producers could get together and cooperatively build a commercial kitchen for a partnership or LLC and work with the Small Business Administration to find funding.”
On-farm marketing is a cash business. Therefore, producers should have cash on-hand to make change and should have a safe place to keep cash after receiving payment.
“It is also important to take biosecurity into consideration when offering on-farm sales,” Dr. Fernandez said. “You cannot know how many farms your customer has visited or whether they have been exposed to any animal diseases. Keep visitors out of areas where you keep your breeding animals, and only allow them access to animals you will sell.”
Dr. Fernandez said producers can consider selling club kids and lambs for 4-H or Future Farmers of America projects. While there will not be any fairs or youth shows scheduled this year due to the COVID-19 pandemic, producers should keep this option in mind as they develop their breeding program.
Compared to steers, kids and lambs are easier for children to work with, relatively inexpensive and easier to sell after the show. However, producers who plan on selling kids and lambs for these shows should do some research and understand the judges’ preferences because the customers will be hoping to win.
“The most familiar and easily accessible market for most producers is the livestock auction,” he said. “Auctions have regular sales, and market reports can give producers a fair idea of how much they can expect to make. However, each week can have different prices depending upon the number of buyers present, the number of animals to be sold and the size of the animals the market demands at that time. Animal quality is often of secondary importance.”