BELLINGHAM, Wash. -- The Internal Revenue Services has notified the North Cascade Meat Producers Cooperative it qualifies for tax-exempt status, which includes exemptions from federal and state securities regulations.
Pat Grover, president of the cooperative, said the securities exemption is more critical than the tax exemption at this point as the co-op seeks to raise money for its new startup.
"We currently have 30 meat producers on board who have purchased memberships in the cooperative," he said. "These exemptions will support the cooperative's plan to offer non-voting equity investment opportunities to our producer members and other parties, as well as offering private placement opportunities for those interested in investing in our efforts to ensure the sustainability of farming and increase the availability of locally produced meat throughout the region."
Co-op members operate farms in Island, Skagit, Snohomish and Whatcom counties, producing pasture- or grass-finished beef, pork and lamb. They plan to develop a new meat brand -- North Cascade Meats -- and to provide custom and USDA meat processing services.
Originally the co-op had considered building a processing facility but has decided instead to provide the services through an existing processor.
"That will cut down our costs considerably," Grover said.
The co-op has received a loan commitment from the Whatcom Community Foundation and will also seek grants, such as a USDA Rural Development Grant.
The Northwest Agriculture Business Center is providing technical assistance to the new business. Project manager Jeff Voltz said the million people who live in the four counties can consume the equivalent of 140,000 beef cows, 300,000 hogs and 28,000 lambs a year.
"More than 98 percent of this meat comes ... from outside the Puget Sound region," he said. "There is a burgeoning demand for locally produced products and a huge market opportunity for local meat production."
Grover credited U.S. Rep. Rick Larsen, D-Wash., for helping expedite the co-op's application for IRS Section 521 Farmers Cooperative status.
-- Steve Brown