Coordination key to slaughter facility success, study finds
By MATEUSZ PERKOWSKI
A lack of coordination with meat packers is often a bigger barrier to success for "local" livestock producers than insufficient slaughter capacity, a new study finds.
Small livestock producers hoping to sell their meat locally often see a dearth of nearby slaughterhouses as a major obstacle, but they often don't generate enough animals to justify new facilities, according to the USDA study.
Even a very small, 2,000-square-foot slaughter plant with limited services would need to process about 460 cattle a year just to break even, the study said.
Since poultry slaughter generates less revenue, that would be the equivalent of about 77,000 birds a year, the study said.
Unless a facility can count on local farmers to supply such numbers of livestock on a consistent basis, it won't pencil out economically, said Lauren Gwin, a research associate at Oregon State University and one of the study's authors.
"These are complicated manufacturing facilities, even the small ones," Gwin said.
Processors may also face the problem of being overrun by demand during certain seasons, when many local farmers have animals ready for slaughter, but then not enough to cover costs during slow months, the report said.
With uneven cash flow, it's hard for processors to justify employing skilled laborers year-round, which can diminish the quality or type of services they can offer to producers, the study said.
Gwin said she hopes the study will serve as a "reality check" about the viability of slaughterhouses and offer ideas about how to improve the relationship between farmers and processors.
The report includes case studies of several successful processors from across the U.S. and finds that many share similarities, such as having "anchor" customers who provide a steady supply of livestock through the year.
In some cases, processors become their own "anchor" clients, by buying livestock, processing it and selling the meat under their own brands, the report said.
Scheduling is also crucial, said Gwin.
The Island Grown Farmers Cooperative in Washington is mostly known for its mobile slaughter unit, but the key to its successful system is cooperation among farmers to keep the facility busy, she said.
"They make it work year after year," Gwin said.
Distance to slaughter is seen as an impediment for farmers, but the realistic solution may be aggregation of livestock and better communication among farmers, rather than new slaughter facilities, she said.
Farmers can arrange to pool resources to ship livestock and pick up meat at one time, instead of everybody performing such tasks independently of one another, Gwin said.
"It takes a lot of organizing, but it can be done," she said.
To read the USDA study, go online to www.ers.usda.gov, then click on the "Publications" link at the top of the page. Open the file named "Local Meat and Poultry Processing: The Importance of Business Commitments for Long-Term Viability."