Final Report for FW01-036
Beneficial Farm, a diverse small farm that operates a 60-family vegetable cooperative 20 miles southeast of Santa Fe, worked with fellow egg producers to try to develop a cooperative based on commonly shared values, production methods and marketing strategies.
The project team concluded that there was not enough information available to render a definitive answer about what conditions must be present to support a legal, incorporated cooperative for small-scale egg producers.
What does work is informal resource sharing, which allows for freedom and flexibility for producers and can carry a fledgling "association" for a long time on its development path. Institutionalizing such associations into a cooperatie requires a firm foundation beyond the support of grant money.
Beneficial Farm proposed and carried out the Regional Poultry Producers Improvement Project to address obstacles to local farmers and ranchers (New Mexico and Colorado) who wish to include poultry in the mix of their diverse operations.
Among the obstacles that the project sought to overcome were:
1. Consumer preferences and awareness of poultry production issues that impact the establishment of production standards for a regional label.
2. Dealing with producer issues that are involved in developing a label.
3. Developing the quality of birds on a local level that are capable of producing eggs that will meet the standards consumers seek.
1. Conduct market research with consumer to develop appropriate production standards and to test the vialiabilty of joint marketing and labeling of poultry products.
2. Develop joint marketing and labeling of poultry products.
3. Research and develop a locally adapted strain of laying hen as the foundation stock for an expanding egg, chick and pullet operation.
The project team conducted surveys, in-store demonstrations, point-of-sale advertising and test to gather qualitative and quantitative dat to answer the following questions:
What information is important to consumers regarding the production and management process.
What "minimum" production standards need to be adhered to? What standards would be seen by consumers as optimal? How do we reconcile the differences.
Is a regional Label feasible? Appropriate?
What does a label say to consumers? About consumers?
How important is organic certification? Does certified add value? If so, how much?
To develop a plan for joint marketing and labeling of poultry products, the cooperators worked together to answer these questions:
How do we jointly handle product? Money?
How are the products packaged, distributed, delivered and marketed and by whom?
Will a producer produce for another producer's label?
Is a producer cooperative feasible or desirable?
The project team will continue with current research and development of a locally adapted strain of Barred Plymouth Rock laying hen as foundation stock for egg, chick and pullet operations. It will continue with feed and hatching trials to answer the following questions:
What locally available, economically viable feed rations are suitable to the strain and egg quality standards demanded by the market?
What percent level of hatchability can be achieved under the best operations conditions that can be created?
How will this strain perform in other locations?
This study led to some baseline conclusions about the desirability and feasiblity of promoting locally produced, high quality poultry products from locally bred, high quality stock:
Accessing the market: There is a substantial and growing market for fresh, high quality, barnyard- or field-raised eggs that can command a premium prices in local retail stores. The ability to provide a year-round supply is critical as is the presentation of the product in a high quality, professional package. Pooling of a product under a common label helps producers meet year-round commitment. Within a group, some producers may face difficulties at the same time as others are not, thus assuring supply through decentralized production.
Access to supplies: Groups of producers, whether informal associations or legal cooperatives, can improve their access to key supplies, like egg cartons, because they are better able to order in bulk. Producer groups can also access feed ingredients more reliably and conveniently. And one producer may be able to receive, producer or store a key ingredient, sharing with others to help cut costs.
Localizing feed: Producer groups can often find interesting local feed options not always accessible to single producers.
Replacement stock and breed adaptability: Because purchasing day old chicks from out-of-state facilities is becoming more difficult and costly owning to airline rules, establishing local hatcheries can minimize those difficulties while, at the same time, developing breeds acclimated to local conditions.
Educational & Outreach Activities
The projects most effective outreach was through an article in the Weston Price Foundation newsletter that emphasized the group's efforts to get away from soy and corn as principal feeds four poultry. The article can be accessed at www.westonaprice.org/farming/realeggs.html.
Objective 1. Conduct consumer market research.
The consumer survey was conducted at the dairy department of two local stores. Here are the questions and a summary of responses.
1. What information is important to consumers regarding on-farm production and management?
Customers said they want to know the nutritional value of the eggs, what the hens are fed and the living conditions and treatment of the chickens. They want to know that the eggs are fresh and that the chickens are fed organically and treated humanely.
Project coordinator Steve Warshawer notes that providing consumers with nutritional information on eggs produced on different farms with varying management practices and climates may not be economically practical. It may not even be feasible on a single farm at different times of the year under barnyard conditions.
“We feel that the living condition and treatment of the chickens, combined with information on the quality of their feed, are sufficient to meet the consumer’s needs for information,” says Warshawer.
2. What minimal production standards need to be adhered to?
Respondents said: 1) no hormones or antibiotics, 2) no genetically modified organisms, 3) fresh, 4) no pesticides or herbicides and 5) grown organically.
3. What standards would be seen as optimal?
As optimal standards, respondents cited: 1) no hormones or antibiotics, 2) no synthetic vitamins or nutrients, 3) feed with no animal byproducts, 4) access to outdoors, fresh air and sunlight, 5) cage-free, 6) free-ranging, 7) no crowding and 8) chickens retain their beaks.
4. How do we reconcile the differences?
Consumers diverge on the subject of organic certification. While viewed as optimal, the extra cost of certification may not justify the small increase in value for the producer, who may be producing organically anyway. At the same time, animal byproducts are often perceived as slaughterhouse waste, yet many animal byproducts, such as whey and skim milk, may become important sources of animal protein. With these contradictions in mind, says project coordinator Warshawer, the minimum standards, bolstered with consumer education, may be sufficient.
5. Is a regional label feasible or appropriate for producers within 150 miles of markets?
Boundaries of this nature appear to be soft. In other words, products from southern Colorado are understood to be similar enough to those from northern New Mexico that they could be included in a collaborative pool. The 150-mile radius is a guideline that could be adjusted if it could strengthen the association’s capacity to provide consistent product.
6. What does a label say to consumers or about producers?
The label should say how the producer feeds the chickens; how the producer treats the chickens; whether the producer is local; when the eggs expire (freshness); and whether the eggs are fertile or non-fertile.
7. How important is organic certification?
It is more important to the consumer that the eggs be grown organically than certified organic. When a consumer doesn’t know the producers, organic certification can provide assurance the product was produced naturally. But when the consumer knows the producer and the operation, such certification assurance may not be needed. For that reason, producers in the Beneficial Farm cooperative will communicate their values without depending on certification, which may only serve to add to the product’s cost.
Since the advent of the USDA Organic Standards, and the rapid increase of eggs certified organic under what this report calls "Industrial Organic Standards," the markeplace for high quality eggs has become more complicated for the small producer as well as the consumer. Consumers have begun to ask why naturally grown products like Beneficial Eggs are not cerfied organic, which places an additional burden on small, local producers to clearly position and identify their product. One technique is to use explanatory point-of-sale information and education of the dairy department staff in retail stores as well as in-store demonstrations that show the flavor of the eggs.
Objective 2. Assess the potential for conducting collaborative marketing using a regional label.
To assess the use of a regional label, producers were asked how they could jointly handle the product and the money as well as how the product would be packaged, distributed, delivered and marketed. A pilot test was then launched among willing producers. The system agreed upon was for the cooperating farms to sell their eggs to Beneficial Farm for $2.25 a dozen. Beneficial then resells the eggs for $3.10 a dozen, the difference covering packaging and distributions costs. The agreement was acceptable to all producers, although not all signed it.
Throughout the project, Beneficial Farm continued to distribute and market eggs for all pool members. At the same time, pool members were encouraged to continue to direct market their eggs, under the Beneficial label, through farmers markets, CSAs and farm stands. The project report states that it was easy to balance various sales opportunities and to personalize the arrangements farm by farm, with the flexibility have been rewarding for all participants.
Demand peaks during the holiday season while egg production peaks during the spring. Producers were asked to support market expansion by reducing prices to $2 a dozen during peak production to support new promotions in stores.
A Beneficial Egg label was created in April 2003 and updated in October 2004, the second-generation designed to allow an "over sticker" of supplemental producer information, including grade and size and including a UPC bar code. The new labeling will enable use of the Beneficial Egg carton for multiple graded products during expansion into new markets where grading is necessary without the need to print special cartons for each size and grade.
Two full seasons of product pooling and outreach to new producers found that producers who are physically closest to retail and direct marketing opportunities are less inclined to collaborate under a common label that are producers for whom distance and market access are more critical. At the same time, the more distant producers tend to have more resources for dealing with feed costs and handling. This combination of factors suggests valid reasons for small-scale producers to consider collaboration.
While these collaborations can be valuable, the project did not develop enough information to support the development of a legal, incorporated cooperative for small-scale producers. It appears, at least in the project area, that more and more small cooperatives are unable to achieve the "economic critical mass" needed to provide adminstrative, accounting, member development and related support for a cooperative. Informal resource sharing in such situations provides producers with the greater freedom and support.
Objective 3. Evaluate the creation of a dual-purpose chicken for meat and egg production through breeding, hatching and multiplying by using local resources.
Small producers typically buy hybrid hatchery chicks that arrive by mail and are then raised on feed trucked in from distant locations, a system not conducive to success on farms with widely ranging conditions. Further, it negates preservation and enhancement of genetic diversity.
The project proposed as a strategy localizing the feed source as much as possible to create a balanced, healthy feed regimen, at the same time hatching and multiplying stock raised on local feed.
The Beneficial Farm hatchery at 7,000 feet with low ambient humidity works poorly for hatching. To compensate, the farm has built a simple insulated room with a fan and humidifier, yielding hatching averages in a range of 55 to 75% in 2002. The rate is low by industry standards but acceptable in Beneficial’s climate. The lower hatch rate may contribute to vigor and livabity. Adaptability to decreased light and localized feedstuffs continues to be expressed in the strains of locally produced chicks, which had reached six generations at the time of this report.
Beneficial Farm has been shipping fertile eggs to other producers, with hatch rates of 88% achieved in some tests. This project is estimated to have positively impacted 30 farms in New Mexico, Texas, Colorado and Arizona by providing them with newly hatched chicks, fertile eggs for hathcing or ready-to-lay pullets.
Four farms now comprise the Beneficial Egg Producers Association and markets have expanded to include Albuquerque. In addition, another dozen farms rely on the association for feed and replacement stock.
The project contributed to local agriculture by working cooperatively and achieving buy-in from local retailers that local, high quality products are important to, and desired by, the consuming public. In the process, the small producers find themselves in the opening stage of a process that is crucial to them as the larger industrial organic food system continues to expand and dominate the organic landscape.
Poultry operations could benefit from the development of local sources of protein feed. Properly processed animal byproducts from slaughter operations and manageable on-farm production processed need to be investigated. Chickens need animal protein in their diets, and because bugs are scarce in cold weather, protein must be added to chicken feed during at least a portion of the year.
In addition, the project coordinator says, there is a need to differentiate foods produced on a small scale from those produced by the larger operations in the organic movement.