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Positive steps outlined to boost small meat processing in Colorado

Candace Krebs
The Ag Journal

COVID-19 processing and supply chain disruptions have driven widespread interest in diversifying the existing portfolio of small to mid-sized meat plants, in an effort to make the food system more resilient and offer greater economic development opportunities for producers and rural communities.

The Economic Development Council of Colorado recently held a virtual roundtable to explore the needs, opportunities and challenges surrounding small meat infrastructural development.

Several agriculture leaders on the call talked about their frustrations but also pointed to existing programs and precedents that could offer a foundation to build on.

For producers who need livestock slaughtered, there is simply no availability out there, said Colorado Senator Jerry Sonnenberg, a third generation farmer from Sterling.

His family recently invested in a reefer truck they plan to convert into a mobile slaughter trailer because they had no other choice, he said.

Nancy Roberts raises American Scottish Highlanders on her ranch in the mountains south of Buena Vista. Finding cost-competitive USDA-inspected processing options and freezer storage is difficult for ranchers like her who want to direct-market their meat.

“We could not get access to processing. That’s what we are up against,” he said. “The question is how do we increase our ability to process animals and meet consumers’ need for local products?”

Sonnenberg did have several ideas. The first was to adopt a similar initiative to one in Wyoming that allows ranchers more flexibility to sell state-inspected meat. 

He also pointed to Colorado’s Cottage Foods Act, which grants allowances for processors of low-risk foods to operate out of their own home kitchens.

“It does have some restrictions,” he said, citing requirements to enroll in food safety classes and remain below a $10,000 limit on gross sales. 

How to handle the liability aspects of food production does require careful consideration, he added.

“How do we protect producers, and still inform the consumer, so that there is an understanding that they both have responsibilities (for safe handling and cooking)?” he said. 

Liza Marron, executive director of the San Luis Valley Local Foods Coalition, pointed to another exemption adopted by the state in recent years that allows on-farm processing of poultry sold direct to consumers. “Can that be extended to beef and pork and other things?” she wondered.

“Up to 20,000 birds a year is not that small,” she added of the poultry exemption.

Many processors want to step up to federal inspection but don’t have the resources to do it. Still, the San Luis Valley has the opposite problem: the area’s only USDA processor decided to drop its USDA inspection this year because business was already so brisk without it.

That left many direct-market producers hanging, including Nancy Roberts, a rancher from Nathrop in Chafee County, who had 80 head scheduled for USDA processing at the plant over the next year.

“It’s been a real challenge for me this year, and I know I’m not the only one,” she said. “We’re paying a premium (for slaughtering), which makes it hard for us to compete with companies like Sysco (the country’s largest food service distributor). We do have people who are interested in doing this, but they don’t have the capital to go into meat processing.”

Renting long-term freezer storage to address seasonality of production and fluctuation in demand is also cost-prohibitive, she said.

Robbie LaValley, a rancher from Delta and co-owner of processor and retail store Homestead Meats, highlighted some additional market competition challenges. Unlike small plants, large plants are able to harvest and sell offal, with an average impact of $100 per head, she said.

“Larger processing facilities are able to sell offal and receive value, where smaller facilities pay to remove offal from the plants to either landfills or composting,” she explained.

Her company is currently exploring joint transportation options — similar to the hide truck that currently goes around to multiple small plants— and alternative markets for things like blood for pharmaceutical purposes. 

“Another thing we have tried to investigate is offal going into compost, but there are significant regulatory hurdles,” she said. “I think that warrants a bigger picture conversation with Colorado Department of Health and Environment.”

Another thing that would help small plants is extended loan repayment plans when new equipment is needed. 

“We were looking at a roll-stock (packaging) machine, and it was $80,000,” she said. Kansas has a program that allows small plants to defer the upfront cost of equipment over a five-year period, allowing businesses time to generate production — and sales revenue — to cover repayment, she said.

Jennifer Martin, a Colorado State University assistant professor of meat safety and quality who was previously at Texas Tech, said small processors need more technical assistance and resources.

“The regulatory side of this industry can be quite confusing for processors across the state,” she said. “Perhaps rather than investments in financial support, we need to be increasing access to technical resources and making the regulatory pathways more clear. We also need to be looking beyond the immediate crisis and making sure we are setting up small processors for success in the future.”

While there’s clearly an immediate need for more capacity, “we have to be mindful of the challenges processors will face” longer term, she added, such as labor availability and environmental requirements.

“This is not necessarily a glamorous industry, and that’s a challenge we have to be mindful of,” she said.

One positive development for Colorado is that Martin has been hired to take on an extension role starting in January. “This is the first time CSU will have a dedicated meat science extension position within the prior decade,” she said. “Before, the need just wasn’t as apparent.”

Martin said she planned to use her new position to partner with communities that house small meat plants to find strategies for increasing the local labor pool.

“That will be part of my job: to identify opportunities to provide skills training and connect with professionals looking for jobs in rural communities,” she said.

Another potential solution, already common within the veterinary industry, is to set up a plan to recruit rural kids, send them off for further training and bring them back to their home communities to fill meat-processing positions.