Not everyone wants to invest in the labor and marketing finesse required to direct-market meat and grain to specialty buyers, but ancillary business opportunities are also created by catering to those who do.

Not everyone wants to invest in the labor and marketing finesse required to direct-market meat and grain to specialty buyers, but ancillary business opportunities are also created by catering to those who do.

Chad Franke knows something about both sides of that equation. Since returning to his roots as a small farmer in northeastern Colorado, the former mechanical engineer has gone from producing high quality Berkshire pork to building a new feed mill on his farm near Roggen that will cater to small-scale farmers like him.

“It’s not an easy opportunity. You’ve got to build your markets, you’ve got to take that risk and build those relationships, but the markets are there,” he said.

In his case, one opportunity led to another in a segment of the industry that remains drastically underserved but carries a price premium: the booming direct-to-market small farm niche, which is flourishing, especially in north central Colorado.

“We are in the epicenter of the local foods movement,” he said. “There are people paying insane prices because they want to know where that food came from and be able to talk to the farmer who raised it.”

When Franke and his wife Carolyn first decided they wanted to raise their family in a rural environment, Franke gave up his engineering job in Golden and began looking for something he could do from home. Agriculture seemed a natural fit since he grew up on a fifth generation farm northeast of Akron that remains in his family. (His mother and his sister live on the farm today.)

Franke was raising a few pigs to sell as freezer pork when he learned that Dave Ellicott, the owner of Innovative Foods LLC, a custom processor at Evans, needed more Berkshire pigs for a special branded pork program.

“It’s fresh, never frozen, high-end pork, sold under the Black Diamond label through local Whole Foods markets,” Franke said. “We started running the numbers and it looked good, so we secured a small USDA beginning farmer loan to get up and running. We also became Global Animal Partnership-certified.” His wife continued to work full-time in Denver, which helped buffer the risks of starting a new venture.

“It did very well for us. We had 20 sows and a couple hundred pigs on the place at any one time. We were farrowing three or four times a month,” he recalled.

Meanwhile, Franke was purchasing his feed from a small mill in northwest Kansas, Mizer Milling Inc., and Seed House at Atwood. He would drive over and get a month’s supply at a time.

“They cater to small producers,” he said. “It was very good feed, and it was priced competitively. Most feed mills in northeastern Colorado sell semi-truckloads at a time. The Greeley elevator closed three years ago, and it was one of the last places that sold to small producers and concentrated on them. Most mills have a feed mix that would have worked for us, but they sell it in 2,000 pound totes.”

To add efficiencies to his operation, Franke started buying the feed by the semi-load and distributing it to other small producers in his area.

“That’s now grown to the point that we can’t keep up with that model, so the mill owner in Kansas put some money in, and we’re building a feed mill to take care of these smaller customers. It will be located on our farm,” he explained.

Franke and his wife decided to liquidate most of their pigs last February, although they still keep a few head around to sell as freezer pork.

“Now we farrow two or three times a year rather than four or five times a month,” he explained. “It was doable but to get away for a vacation of any kind was difficult. And for the amount of time and money invested, we either needed to get bigger or get smaller and have some additional flexibility.” Many of his pigs were sold to other small producers who will continue to supply the Black Diamond pork label.

“Right now they are processing 60 pigs a week, so it’s gotten to be a pretty big program,” he said. “They are up to about 10 Whole Foods stores in the region, and the market isn’t maxed out yet.”

While relatively expensive, the Black Diamond pork sells out within hours of hitting the shelves, even without being advertised, he said.

“Right now they are running out of processing space, so that’s the hurdle they are working on now,” he said. “But the demand is there.”

Franke’s experience is proof that niche opportunities exist, but they come with unique challenges.

“Beef is a little more difficult than pigs, because your animals are all ready to go at the same time, and you can’t spread your production out,” he explained. “Most people aren’t going to buy two pigs for the year, they are going to buy a half here and half there, and you have to be able to cater to that or it doesn’t work very well.”

Another problem is the gap in affordable services for small producers, since small custom butchers and feed suppliers are increasingly rare.

That’s a problem Franke is hoping to address with his new feed mill.

“My typical customer will be somebody with 10 to 20 sows, just big enough to need a good amount of feed but not a semi-load at a time. These are the people selling to niche markets,” he said. “It’s also the person who buys 10 pigs to feed through the summer, who is buying less than four ton of feed a year, but big enough to buy 1,000- or 2,000-pound bags rather than 50-pound bags, which are inefficient and create unnecessary waste.”

He also wants to expand his capacity to supply certified non-genetically modified feed.

“We have one customer who is certified nonGMO right now, and another customer with around 200 chickens and 10 sows who wants to feed nonGMO and put that stamp on their meat when they sell it,” he said.

With Colorado’s limited soybean production and processing, Franke’s company is currently obtaining soy meal from further east. However, the company is able to source its base grains within the region, including corn, milo and oats, which make up about a third of the feed by volume.

“When we bought some of the equipment from the old Greeley elevator, we found out they still have people asking them where to go to get feed,” he said. “We get calls from people who are 50 miles away. Last summer I even had someone driving all the way from Glenwood Springs with a pick-up and trailer and getting five or six tons of feed at a time.”

“There’s a real opportunity, and there’s a real need here,” he concluded.