Feasibility, planning and purchase of Mobile Processing Unit (MPU) for Scaling up Free Range Poultry Meat Processing for High Volume Retail Market

View the project final report

• 2014 annual report

Commodities

• Animals: poultry

Practices

• Animal Production: free-range
• Education and Training: extension, farmer to farmer, mentoring, networking, workshop, youth education
• Farm Business Management: cooperatives, marketing management, e-commerce, farm-to-institution, feasibility study, market study
• Sustainable Communities: local and regional food systems, sustainability measures

As a group of poultry producers providing products direct to consumers through the High Plains Food Co-op (HPFC), we are challenged with the problem to meet the ever growing demands of the customers we serve. Because of customer interest in naturally raised poultry, we are unable to keep up with the demand for poultry meat. While all processing is currently done by moving our equipment into and sharing space in a local USDA processing plant, 1 to 2 days a month, we are past the point of needing to scale up the current processing system. A mobile poultry meat processing facility is being considered to mediate this problem. Comprised of producers (Northwest Kansas, Southwest Nebraska and Eastern Colorado) selling products to over 300 consumers in the Denver area, HPFC currently markets all the poultry products that can be produced and processed. A recently completed expansion plan found poultry processing availability to be the number one barrier to producer expansion. If this barrier is resolved it is anticipated that 10 producers could grow their 2013 poultry production by 100%, add $700 to $1,500 monthly revenue to their farm business and add 3 to 5 jobs in the rural communities for young farm families to grow. The combined increase in total monthly farm revenue could exceed $40,000 within 5 years.

In 2013, 2 producers supplied 100 broilers to HPFC customers per month. These were processed by hand at a local USDA inspected plant with producers bringing in their own equipment and doing all set-up, take down and clean-up within the plant’s business hours. Arrangements were made with the local USDA inspector to be present and the local plant’s HAACP, SOP and SSOP plans, checklists and GMPs were used. Processing labor was recruited from agricultural workers in the area. Packaged and processed whole broilers were sent on HPFC delivery trailers to Denver area customers. Since the plant is primarily a beef processing plant, this arrangement is limited, temporary and has expanded to the maximum level the owner is willing to do. In order to meet market demand, we need to be processing 500 chickens a month by the end of 2014 and processing 2000 chickens a month by the end of 2017. Our current method of processing is not sustainable long term. We started exploring the feasibility of a mobile poultry meat processing facility.

 This project proposal is to complete the feasibility, do implementation planning and help us purchase a MPU trailer and equipment. We must determine how to scale up processing, the best scale of equipment, the storage needed, the feasibility of our project and create an implementation plan. We are exploring innovative methods like mobile processing and we will need to be innovative in solving difficult challenges like permitting, labor, meat inspection, water quality, wastewater treatment and disposal. At the end of the project we expect to have a plan to address these challenges and a fully operating MPU. In addition, we will lay out the feasibility and planning steps that occurred through the project to share with others.

If we can solve this processing scale up challenge then we can expand our farm production operations, add more producers to our group, expand poultry products sales and add jobs for our rural communities. We believe we have the market and production figured out. If the processing barrier is addressed an estimated 6,000 to 12,000 whole chickens could be sold in 2014-2015 through volume accounts like CSA’s, restaurants, small grocers and churches along the Front Range. We are servicing three of these accounts now and have three more wanting to join.

The following timeline assumes a project start date of May 1, 2014 and any adjustment to the start date will impact the project schedule accordingly. We anticipate easily able to complete the project in less than 22 months.

• Project Organizing May 2014 June 2014
• Estimate Operating, Capital and startup costs May 2014 June 2014
• Feasibility May 2014 June 2014
• Site determination and permitting June 2014 July 2014
• Equipment purchasing and fabrication June 2014 August 2014
• Implementation August 2014 September 2014
• Scaling Up Business Plan for 2015 October 2014 November 2014
• Progress Report October 2014 November 2014
• Final Report December 2014 January 2015

This is an aggressive timeline, but matches the seasonal poultry production schedule and the HPFC projected sales for 2014-15, indicated in their recently completed expansion plan. Project organization, financial planning and project feasibility will be done in the first 60 days followed by site(s) determination, permitting, equipment purchase and fabrication for the MPU to be completed by the end of August. It is desired to have full implementation of the MPU by fall and winter to meet the need to stock-up on processed chickens for the cold non-production time from late December through mid February. To complete the project a 2015 High Plains Poultry business plan and progress and final reports for the project will be prepared. This will allow for the final report to be presented at the HPFC 2015 Annual Meeting on January 10th.          
         
We plan to share the following results from this project:

• The steps and process we took to explore the feasibility and planning
• A summary of the solutions we come up with to address the project challenges
• A summary of the High Plains Poultry scale up 2015 business plan and innovation we develop in the project

We plan to share these results at the annual HPFC meeting in January 2015 which is typically attended by 100-150 producers and consumers. We want to attract more producers to begin producing poultry products. We will also present the project results in the spring of 2015 to 3 to 5 local FFA/Vo-Ag classes in our region to attract young people into poultry business (an estimate average of 15 per class). We will present the project results to a Rawlins County entrepreneurship fair held each spring with 300 adults and youth attending to inspire and attract young people into the poultry business. We will make the project results available to the Rocky Mountain Farmers Union (RMFU) regional network throughout Colorado, New Mexico and Wyoming. They are closely and directly involved with the development of farm to table production through numerous cooperative organizations in their service area. RMFU has been a strong supporter of HPFC from its inception. We will make applicable project results available to 3 Extension Districts in the area and their related 4-H clubs. The project leader is a board member of one of those districts. We will make the project results available to the National SARE network and create a PowerPoint presentation slide show for viewing.
         
We expect to determine the feasibility, develop an implementation plan and begin implementing that plan. The primary results we are after are increased production, increased processing and increased revenue. Current production numbers were noted previously. Additional production, processing and revenue measures will be taken and documented before/after the project. We also expect to add jobs which will be identified and documented before/after the project. Ultimately we need to be processing 1500+ chickens per month by the end of 2017. We will need to implement our innovative solutions and begin scaled up processing by January 2015. That will be ultimate proof that our solution works. We intend to demonstrate a model solution for others to follow. This will help small producers prepare their poultry products for market and expand their operations to add additional family members. We also intend to document the feasibility and planning steps we take so others can follow it.
         
Each producer in our group is striving to make their operations more sustainable by utilizing less outside inputs, increasing diversity and selling directly to consumers who care about where their food comes from. Having a collective of farmers operating the unit together is expected to enhance the learning, production support and efficiencies for each producer while providing help with processing labor.
         
Economic viability: We need to achieve an economically feasible scale with meat processing in order for it to be sustainable and we expect to determine that level of scale in the feasibility. If we can help producers grow their operations to above $3000 per month, we believe that is a threshold for their operational sustainability at the farm level.
         
Environmentally sound: Each of our poultry producers believes that producing free range chickens living and growing in their natural habitat without the use of synthetic chemicals and antibiotics is the most environmentally sound solution to poultry production. All poultry sold by these producers are pasture raised, free to roam in their natural environment in open enclosures protected from predators and have access to fresh green grass daily. We also need to consider the environment in our processing operations and will include evaluation of water and wastewater usage/disposal in our study. 
         
Socially responsible: A high priority value for us is helping our rural communities thrive and sustainable agriculture is a key. We want to expand our farm operations in a sustainable way so our kids can come back home to the family farm and raise their kids. That is the most socially responsible thing we can do in helping our rural communities grow. We hope to create 3-5 new jobs for young adults to come back home.