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Ranchers build their own slaughter facility

The Cattle Producers of Washington Livestock Processors Cooperative Association has launched a new federally-inspected slaughter facility in Odessa, Wash. The service offers a marketing arm option for rancher members, and industry members say there's big demand for such an operation throughout the region.

New facility processes meat for local markets

By Matthew Weaver

Capital Press

ODESSA, Wash. — Friends and neighbors would often ask rancher Willard Wolf where they could buy his beef.

“I’d have to tell them, ‘I don’t know where you can go do that other than the grocery store,’” Wolf said. “You have to have a place you can get federal inspection for me to legally sell it to you.”

Now Wolf and other ranchers in eastern Washington have another option for marketing cuts of their beef, pork and other meats. They formed the Cattle Producers of Washington Livestock Processors Cooperative Association, whose new slaughter facility opened last month in Odessa, Wash. Federal inspections began at the plant this week, allowing ranchers to sell cuts of meat to consumers.

They built the $3 million facility using funding from ranchers, local food interests and a state-backed loan.

Wolf, 73, is president of the association and ranches in Valleyford, Wash.

Without the slaughter facility, “you have to go somewhere else and let somebody else buy those cattle. They’ll process them at their federally inspected facility, and then they get the retail (price),” rancher Jeff Schmidt, a director of the roughly 80-member association, said. The new facility “is a great way to bypass a couple middlemen.”

Before the facility opened, ranchers’ options were limited, he said. Slaughter plants around the region are generally smaller, older and busy, making it difficult to schedule a time for processing cattle.

Schmidt, of Othello, Wash., intends to process 200-300 steers a year at the new facility.

The slaughter facility will also allow some ranchers to increase production.

Sue Lani Madsen, an Edwall, Wash., goat producer and past president of the cooperative, has purchased land to increase the size of her herd to supply the local market for goat meat.

Madsen said the Odessa facility is one of only a few “new from scratch” slaughter plants in the nation. Only a handful remain in Washington state, she said.

“Lots of people have the idea — we’ve made it past that to form the co-op and gather the financing, get the plans done, get the plant built, hire people and start,” she said.

Madsen said the plant would be "beyond" breaking even when it reaches the equivalent of processing 15 head of cattle a day.

Madsen also served as project manager for the Odessa Public Development Authority. She said the operation will spin off additional businesses in the community.

One such company is Empire Ranches, the marketing arm of the association. It was created for the facility and the ranchers that use it, said president David Pendergraft.

Ranchers aren’t required to use the marketing firm, but he calls it an “option or perk for being a member.”

“We are able to spend all of our time and use our skill set to determine and create a market for the producers in our local area and use their stories to showcase who they are to the consumers,” Pendergraft said.


Marketing models

The marketing company will use two models for helping ranchers sell their meat.

In one model, the company purchases livestock from the producer, delivered to the plant on a specified date. The rancher is paid a premium based on the quality of the animal. Empire Ranches is then responsible for selling the entire carcass.

In a profit-share model, the company works with individual ranchers to supply meat to specific customers, with both parties investing in the program and sharing the profits.

Both models have demonstrated promise and increased benefit for the rancher compared to current options, Pendergraft said.

“We have a model that is based on fairness and we were able to cut down standard fees that are usually applied,” he said.  “We want to make sure the rancher has the time, effort and resources to raise the best quality animals, and we are there to make sure they get compensated for that work.”

Members pay a harvest fee of $85 for cattle, plus 58 cents per pound for the hanging carcass. Special cuts or packaging add extra costs.

Members pay a harvest of fee of at least $90 for hogs and at least $80 for goats and sheep.


Paradigm shift

Touchet, Wash., rancher Joel Huesby, former owner of the Thundering Hooves livestock operation, served as a consultant.

“There’s enough critical mass, I think that’s a big point to make the plant viable,” he said. “It remains to be seen how many (ranchers) actually schedule and use the facility over the coming months.”

Huesby recommends ranchers start slowly, test the market and understand their customers.

“What does my customer want? How can I provide that?” are questions producers need to ask, he said, noting most ranchers tend to focus on production first.

That approach won’t fly in niche marketing and small-scale processing, he said. “It’s a complete flip from most people’s paradigms.”

In a study slated for release this fall, Darin Saul, associate director of the University of Idaho Office of Community Partnerships,  found plenty of consumer demand, livestock and need for a slaughter facility.

Saul said the plant represents a rare type of economic development that benefits small rural communities and provides opportunity for small ranches.

“One of the great strengths of the CPOW (Cattle Producers of Washington) effort is that it is producer-led and they have been persistent in overcoming the many obstacles along the way,” Saul said. “They have all the pieces in place, now they need to get it up and running and prove profitability.”

If CPOW proves successful, Saul said, it will demonstrate that small-scale livestock processing is viable.

Another livestock producer group is exploring the feasibility of building a slaughter facility in the Lewiston, Idaho, or Pullman, Wash., area. Lewiston regional initiatives planner Jacqui Gilbert said those efforts are in the information-gathering stage.

Typically, small processing facilities are designed to serve a particular area, Madsen said. The size and scale of the new plant can be replicated across the state, whether another organization starts one or the association does. The Odessa plant was purposely designed not to expand beyond its current “sweet spot,” she said.

“We’re going to have more demand than we can fill, and we’re going to be looking to see — where does the next plant go?” she said. She bets another facility could start in two years.


Co-op model key

Madsen said the co-op model solved the problem many groups have in getting started — determining ownership and governance. Each rancher bought one membership of the facility for a $600 one-time fee and is approved by the association board. The association ensures members are active ranchers. Each member gets one vote.

“We want to make sure it really is rancher-controlled, that it does not get taken over by or bought out by a larger concern,” Madsen said.

That makes the facility and its products even more attractive to some consumers who want locally raised meat and a relationship with the rancher, she said.


Quality important

Even if an animal is satisfactory by USDA standards, management has been instructed not to accept just anything, Wolf said.

“Anything that comes in there that is of a quality that we don’t want our name on, it will be rejected,” he said. “There’s animals that go to slaughter in this country that are in pretty tough shape. We’re just not going to accept those.”

Wolf hopes the plant provides an opportunity to help younger generations enter the ranching business. The average age of a U.S. rancher is 62 years old. He envisions even more income opportunities for ranch families that use computer and marketing skills.

Wolf said the co-op wanted to do something for the industry.

“Whether they take advantage of it or not or we make it totally successful or not is up to the farmers and ranchers that are in business,” he said. “It’s got to be somebody who wants to move forward. All we’re trying to do is give them the chance to do that.”

Online

www.livestockprocessors.com



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