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Local Meat Industry: Opportunities and Challenges in Central Appalachia

Lewisburg, West Virginia | June 19-20, 2012

Convened by the Central Appalachian Network In partnership with: The Greenbrier Valley Economic Development Corporation Swift Level Farms The West Virginia Food and Farm Coalition

Executive Summary

On June 19th and 20th, 2012, the Central Appalachian Network and its partners convened a gathering of 45 people from across Central Appalachia in Lewisburg, WV, to discuss how to strengthen the regions local meat industry. Participants hailed from every part of the industry production, processing, inspection, finance, sales, and support. They worked together to: Understand the core challenges the industry is facing, Develop solutions to address these challenges, Create the relationships necessary to implement these solutions, and Identify clear next steps to move this work forward. This paper is intended to share the knowledge and ideas brought forth during this gathering with a broader audience, to increase the collective understanding of key issues being faced by the local meat industry, and catalyze efforts to address them. The paper consists of five main sections: An introduction, which gives background information on the gathering itself, and illustrates key concepts and trends surrounding the local meat industry in Central Appalachia, including why local meat is such an important issue in the region A section on processing, which reviews three different ownership and operating models that small meat processors are using in Central Appalachia. This section also reviews two core challenges that must be overcome for small local meat processing to remain viable in the region A look at six key issues facing the local meat industry as a whole. Here, participants offered strategies for strengthening the industry by addressing these issues in both the long and short-term A list of partners and resources for implementing these strategies And a conclusion, with clear next steps for supporting and strengthening the regions local meat industry Through a series of open and honest discussions, we reinforced our initial belief that the local meat industry is a sector with enormous economic potential for the Central Appalachian region. We also recognized the challenges that face this industry, and worked with people from every part of the industry to gain a deeper understanding of these challenges and develop some great ideas for addressing them. Perhaps most importantly, we brought together a diverse group of knowledgeable, experienced, and highly invested individuals and organizations who are ready to work together to move this industry forward in ways that will contribute to creating a more just and sustainable Appalachia. The Local Meat Industry: Opportunities and Challenges in Central Appalachia 1

Introduction

To develop a collective understanding On June 20th, 2012, the Central Appalachian of the core opportunities and Network (CAN), in partnership with the challenges facing the local meat Greenbrier Valley Economic Development industry in the region. Corporation, Swift Level Farms, and the To work together to come up with West Virginia Food and Farm Coalition, solutions for advancing this industry, hosted a gathering in Lewisburg, WV to both short-term and long-term. To develop clear and actionable next discuss how to strengthen local and regional steps to implement these solutions. meat value chains. To create relationships and make connections between people who are This event is part of CAN and its partners ready and able to move forward. larger work to strengthen local food value chains, which we define as supply chains that are infused with the triple bottom line values of simultaneously promoting financial, social, and environmental goals. As CAN and its partners have worked to strengthen local food value chains across five states in Central Appalachia, local meat has emerged repeatedly as an area of both opportunity and concern for farmers, processors, and local food advocates. This gathering is an attempt to hold a conversation about some of those concerns, to bring together actors from every part of the local meat value chain, to learn from each other and plan for action.

Gathering Objectives

In planning this gathering, we began by identifying an area where there is great opportunity (i.e., local meat production The Central Appalachian Network and processing), coupled with unique The Central Appalachian Network (CAN) is a challenges. Our goal was to bring together network of nonprofit organizations a diverse group of people who are dedicated to working for a more just and knowledgeable, experienced, and invested sustainable Appalachia. CAN acts as a in this field to figure out where change regional convener and network builder, needs to happen. In order to achieve this with a current focus on supporting local and goal, we made sure to bring in attendees regional food systems. CAN is supported by from all of the Central Appalachian states the Ford Foundation, the Mary Reynolds (KY, OH, TN, WV, VA), and from every part Babcock Foundation, the blue moon fund, of the local meat value chain. Our planning and the Appalachian Regional Commission. team was similarly diverse, and having those diverse voices in the planning process really helped to ensure that the gatherings discussions and presentations would bring out the knowledge of each group in the room, and move the whole system forward. The Local Meat Industry: Opportunities and Challenges in Central Appalachia 2

What is a Local Meat Value Chain?

Local meat value chains include all of the actors that take meat from production all the way through the final consumer, including input suppliers, producers, processors, aggregators and distributors, and markets. In addition to these core elements, the value chain includes all of the supporting actors as well like regulators, trainers, veterinarians, waste management, marketing and advertising firms, and advocacy/non-profit organizations.
Aggregators/ Distributors Accessible Markets Informed Customers

Inputs

Producers

Processors

Local Meat Production and Processing in Central Appalachia

I get a lot of calls wanting the local, grass-fed, no hormones, etc it aint about the money, its about Can I get the product? Andy Nelson, Nelsons Meat Processing More and more, consumers are looking for locally-produced, pasture-raised, hormone-free meat. Demand is growing in the region and across the US, but some critical barriers must be addressed so that Central Appalachias local meat industry can meet that demand.

Opportunities. As we have talked with people across Central Appalachia about local food
value chains, they have repeatedly stressed that meat is important. Appalachian land that is too hilly, rocky, or shady to produce fruits and vegetables may be perfect for meat production. And there is plenty of room to expand local sales for example, West Virginia only gets 2/1000ths of its food from local sources! Moreover, consumers have consistently demonstrated their willingness to pay a premium price for local and grass-fed meats. In addition to its economic benefits, local meat production has social and environmental benefits as well. Pasture-based animal agriculture provides healthy food for consumers, improves animal welfare, and encourages environmentally sound farming practices.

Challenges. Despite these opportunities, we hear farmers say that there is often not
enough local infrastructure to process the animals they are raising. In many rural communities, the number of small butcher shops and slaughter plants declined, as large- scale industrial processing became the norm. Further, we hear small meat processing businesses say that they are struggling under the rules and regulations that the federal government places on meat processing.

It appears that we have a potential crisis looming in local meat value chains across Central Appalachia. Small meat processors are essential, but are struggling mightily. If we want local meat value chains to thrive, we need local meat processing that is profitable, accessible, and affordable for producers. This is the concern that spurred this gathering. The Local Meat Industry: Opportunities and Challenges in Central Appalachia 3

Approaches to Local Meat Processing: Three Brief Case Studies

At the gathering, we heard a panel discussion about various approaches to developing the infrastructure needed for meat processing. Below, we outline three brief case studies of varying approaches to local meat processing in Central Appalachia. 1. A traditional for-profit business. Andy Nelson owns Nelsons Meat Processing, a meat processing plant in Milton, WV. Andy grew up cutting meat at his fathers grocery store, which eventually closed. In 1997, during a downturn in the trucking industry (where he had been employed,) Andy decided to create his own job by going back to his roots and renting and renovating a closed-up slaughterhouse. He eventually built his own facility nearby, and owns and operates his plant as a for-profit business. He has grown steadily over the years by, as he puts it, treating people the way Id like to be treated, and recently bought out a local competitor in order to expand his capacity and his value-added processing services. He has a diverse business, processing custom orders from farmers, butchering and processing hunters deer, transporting meat regionally with a refrigerated truck, and processing for the prison system, as well as processing some of his own animals. He shares other processors challenges around regulations and the timing of producers processing needs. He also notes that he has many struggles with getting consistent, reliable labor for his plant, noting, I have 10 or 11 employees on average when they all show up. 2. A social enterprise. Marksbury Farm Market is in the grass business; they see their business as a way of converting good Kentucky grass into animal protein in a sustainable way. They are a small scale, locally-owned butchers shop, farm market, and processing facility near Lexington, KY. The company is a social enterprise, combining financial, social, and environmental goals. Marksbury was formed as a partnership between 4 investors who knew that they could make an impact, and a good living, by operating a facility that encourages the ethical treatment of animals and care of the land, and which capitalizes on the growing market for sustainable local meat. Their primary income stream comes from selling local animals raised on pasture according to Marksburys strict environmental and animal welfare standards to wholesale markets: restaurants, grocery stores, and institutions. They also do custom processing for local producers, keeping strong ties to the community while staying out of those producers primary markets by focusing on wholesale. Finally, Marksbury is dedicated to transparency in its operations to the point where every package of their meat can be traced back to the animal it came from.

The Local Meat Industry: Opportunities and Challenges in Central Appalachia

3. A community-owned enterprise. Alleghany Meats, a

venture that includes slaughter and processing, as well as live-animal marketing and education, started as a result of a study, led by a local nonprofit (The Highland Center,) to figure out how to increase the viability of the local meat industry in Highlands County, VA and the surrounding counties. This study found that the local industry couldnt thrive without a closer processing facility. In response, a comprehensive feasibility study was conducted, which found that the community could support its own processing center. The whole community worked together to raise the money and match the grants and loans needed to create this facility; 93 local investors put in at least $5,000 each to bring the community the infrastructure that it needed. As a result of this community-led process, the area has a facility that truly serves its business and educational needs. In its first year of full-scale operation, Alleghany Meats is already generating rave reviews from producers, and the increased supply of local meats has driven up sales at the local farmers market by 200%.

Core Challenge for Processors: The Regulatory Environment

Over the past year, CAN has discussed the opportunities and challenges facing the local meat industry with meat producers, processors, and others involved in the meat value chain. Over and over again, weve heard that one of the core challenges facing the meat industry in the region is the regulatory environment, specifically as it relates to the regulation of small processors. At the gathering, we explored these issues in detail.

The HACCP System. Producers who want to

sell meat across state lines in the US are required to have their meat processed at a USDA certified plant. In turn, all USDA certified plants must have what is known as a HACCP (Hazard Analysis and Critical Control Point) plan in place for each kind animal they process, and for each kind of value-added product they make.

Impacts on Small-Scale Processors. Small

processors frequently have to develop numerous extensive HACCP plans, because they process a wider range of animals and value-added products than even many large plants do. Processors have to justify each of these HACCP plans with scientific studies and tests, and set up extensive record-keeping systems to monitor their plans and their processing. The Local Meat Industry: Opportunities and Challenges in Central Appalachia 5

For smaller plants, these requirements add disproportionately more operational costs per pound of processed meat. And a new set of proposed validation requirements from the USDA is poised to add another layer of testing for each one of these HACCP plans, further increasing the regulatory burden. This burden is compounded by the fact that many small processors dont have formal HAACP training; training events are infrequent (generally once a year per state), and cost busy processors two full days of work time and about $500.

Many small-scale processors feel these requirements place them at a disadvantage. As one participant in this gathering said, It makes absolutely no sense for me to be subjected to the same regulations with a 12,000 square foot facility that Tyson Foods has with a 300,000 square foot facility. Furthermore, a former USDA supervisor of inspectors who attended this gathering noted that the HACCP regulations are interpreted and enforced inconsistently, which means that different processors face different regulatory challenges.

Thus, small meat processors challenges are related both to federal policy (the HACCP system) and the ways the policy is implemented on the ground (the inconsistent enforcement of USDA HACCP regulations.) These regulatory burdens have contributed to the decline of many local processors, which eliminates jobs, raises costs for producers, and hampers economic growth.

Another Shared Challenge: Peaks and Valleys in Processing Demand

The other key challenge noted by processors revolves around the fact that most farmers raise and finish their animals on roughly the same schedule, with demand for processing services peaking in the fall and early winter, and bottoming out in the late spring and early summer. This means unsteady employment for workers, further exacerbating the difficulties that many small processors have with finding reliable labor for their plants. Moreover, since processors have to make most of their yearly income during the relatively short peak season, they have to keep prices higher than they would otherwise if they were able to process at a higher volume year-round. And because most of the years processing demand comes at once, a bottleneck effect occurs, where the labor force and infrastructure of small plants are hard-pressed to meet this short-term spike in demand. The irony of all these seasonality issues is that the biggest season of demand for local meats happens around the summer grilling time and farmers market time just when most small processors are experiencing the lowest demand for their services. Notably, the problem of seasonal peaks and valleys is one that people were already starting to solve during the gathering, as processors and producers talked to one another and made arrangements to have animals finished and processed during off-season times. These conversations clearly demonstrated the importance of bringing together people from every part of the local meat industry to build relationships and solve common problems. The Local Meat Industry: Opportunities and Challenges in Central Appalachia 6

Strategies for Strengthening the Local Meat Industry

Key Issues in the Local Meat Industry

1. 2. 3. 4. 5.

Unsupportive policy environment Access to capital and financing Need for training and education Need for consumer education We identified six key issues: (1) an Lack of collaboration within the unsupportive policy environment, (2) a lack of community access to capital and financing, (3) a need for 6. Need for additional or improved training and education within the industry, (4) processing infrastructure a need for consumer education, (5) a lack of collaboration within the community, and (6) a need for additional or improved meat processing infrastructure. We then worked in small groups to develop strategies for addressing each of these six issues, and got feedback and suggestions on these strategies from everyone at the gathering. The strategies have been summarized below.

At the gathering, participants also engaged in a participatory process to identify the most important issues facing the local meat industry in Central Appalachia.

Strategies related to policy

Propose adjustments to existing regulations that make them more appropriate and realistic for small processors. Create a new regulatory basis for small processors to reduce pathogen sampling. Base USDA overtime rules for inspectors on a 40-hour week, not an 8-hour day. Increase capital from local banks via local agriculture targeted CDs and 401(k)s. Increase access to funding from community development financial institutions. Provide standardized loans for small farm incubation projects in meat production, similar to the high tunnel program in the USDA NRCS Environmental Quality Incentives Program (EQIP.) Develop a meat-cutting apprenticeship program, involving processors, educators, and state entities. Teach producers how to properly finish animals for slaughter. New training programs at land-grant universities to support the local foods movement.

Strategies related to capital and finance

Strategies related to industry training

Strategies related to consumer education

Form a local meat trade association focused on educating consumers. Develop a local meat and/or local foods marketing platform and identify media outlets across the region. Develop ag literacy curricula on agriculture, food, and nutrition for K-12 education. The Local Meat Industry: Opportunities and Challenges in Central Appalachia 7

Strategies related to community collaboration

Promote a watershed approach that connects various state and federal agencies across designated watersheds. Develop a Community Incubator Team made up of local leaders and organizations. Expand the conversation among government agencies to support local meat infrastructure, aiming for something similar to the West Virginia Department of Educations recent hiring of a farm-to-school coordinator. Strategies related to meat processing infrastructure Find or create an aggregator to purchase livestock and market and distribute products across the region. Connect with existing food hubs to start a new food hub / meat storage business. Work with existing processors, meat markets, and butchers to coordinate schedules throughout the year.

Low-cost or no-cost strategies

Participants in small groups identified several low-cost or no-cost strategies, which can be implemented immediately with relatively little effort or money. These are outlined below. 1. Policy: Create a pamphlet outlining policy issues related to meat processing, send it to Representatives and Senators across Central Appalachia, then bring existing legislative contacts together to present information and recommendations. 2. Capital and Finance: Develop a scan of what is available in private and public funding for meat processing infrastructure. 3. Industry training and education: Develop a mentorship program, where experienced farmers support emerging farmers. Work with regional sustainable agriculture and economic development organizations to develop and implement this program. 4. Consumer education: Hold community workshops where local farmers explain and provide demonstrations related to sustainable agriculture, local foods, and local meat value chains. 5. Community collaboration: Organize a meeting with Federal and State Departments of Commerce and Agriculture to see if they can support the development of infrastructure needed for local meat value chains. 6. Industry infrastructure: Bring in an established local meat aggregator (an entity that purchases livestock and markets and distributes products) and talk with businesses that are already purchasing products about creating a product pool.

The Local Meat Industry: Opportunities and Challenges in Central Appalachia

Partners and Resources for Implementing these Strategies

As small groups developed strategies related to the six issues outlined above, some groups also identified potential partners that could help strengthen the local meat industry in Central Appalachia. Some of these key partners and resources are listed below.

Potential partners and resources for policy change:

Animal Welfare Approved Farm to Consumer Legal Defense Fund The Leopold Center at Iowa State University National Sustainable Agriculture Coalition Niche Meat Processors Assistance Network

Potential partners and resources for industry training and education:

Center for Environmental Farming Systems Center for Regional Food Systems at Michigan State University Virginia Tech College of Agriculture and Life Sciences West Virginia Small Farm Center

Potential partners and resources for meat processing infrastructure:

Eastern Carolina Organics Local Food Hub in VA Marksbury Farm Market Monroe Farm Market in WV US Department of Agriculture The Wallace Center at Winrock International

Potential partners and resources for community collaboration:

10 Percent Campaign in NC 30 Mile Meal Project in Ohio Greenbrier Valley Economic Development Corporation Virginia Food System Council West Virginia Food and Farm Coalition

The Local Meat Industry: Opportunities and Challenges in Central Appalachia

Conclusions and Next Steps

Opportunities highlighted, connections created. Through the conversations that

happened at and because of this gathering, we reinforced our initial belief that the local meat industry is ripe for further growth and expansion in the Central Appalachian region. And, as we watched deals being made and relationships being established, we saw again just how important it is hold gatherings like this one. These gatherings bring together knowledgeable, experienced, and highly invested individuals and organizations from all parts of a value chain, and help them see how they can work together for mutual benefit. By catalyzing connections and collaborations, this gathering helped move this industry forward in ways that will contribute to creating a more just and sustainable Appalachia. Potential next steps for CAN Next Steps. Throughout this gathering, we Bring together land-grant worked to develop a collective analysis of the universities and community colleges opportunities and challenges in the local meat to discuss how they can support industry. We thought about what needs to local food systems. happen to move this industry to the next level, Bring together staff members of and problem-solved around the challenges Central Appalachian Senators and that make it difficult to get there. Representatives to address policy We came up with real solutions for issues and recommendations. strengthening local meat value chains; some Host regional gatherings to further are low-cost, immediate solutions, while this conversation and move others may require longer-term planning and strategies forward. investment. And finally, we developed some Continue to support this work clear and actionable next steps to implement through the Small Grants Program. these solutions. Use the CAN mailing list to share Two of the organizations involved in planning information about the local meat the gathering, the Central Appalachian industry in the region. Network and the West Virginia Food and Farm Potential next steps for the Local Coalitions Local Meat Infrastructure Working Meat Infrastructure Working Group Group, will take the lead on implementing Collect information about all of the some of these next steps. Some potential next meat processors in WV. steps for these organizations are outlined to Create a directory of processors, the the left. services those processors provide, How you can help. Each participant in the and important regulations for gathering, and everyone who reads this paper, various markets and products. can work to continue these conversations, and help implement some of the strategies from pages 7 and 8 in their own communities, counties, and states. We can all reach out to our federal and state legislators to present the policy concerns discussed in this paper, either as individuals, or as representatives of groups and organizations with which we are involved. And, as consumers and businesspeople, we can all continue to purchase from, support, and spread the word about local meat producers, processors, and markets in Central Appalachia. The Local Meat Industry: Opportunities and Challenges in Central Appalachia 10

Gathering Sponsors and Partners

The Central Appalachian Network Appalachian Center for Economic Networks Appalachian Sustainable Development Center for Economic Options Mountain Association for Community Economic Development Natural Capital Investment Fund Rural Action The Greenbrier Valley Economic Development Corporation The Greenbrier Valley Local Foods Initiative Swift Level Farms The West Virginia Food and Farm Coalition First National Bank The One Foundation

One Foundation

Contact Information

Central Appalachian Network

Email: can@cannetwork.org Website: www.cannetwork.org Find us on Facebook.

Central Appalachian Network Coordinator

Thomas Watson, Rural Support Partners Email: thomas@ruralsupportpartners.com Website: www.ruralsupportpartners.com This paper was developed and written by Rural Support Partners in cooperation with the Central Appalachian Network.
Cover photo and page 4 photo courtesy of the Marksbury Farm Market. All other photos by the Central Appalachian Network.

The Local Meat Industry: Opportunities and Challenges in Central Appalachia

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