Application to Develop a Business Plan for a USDA-certified Mobile Livestock Unit

Final Report for FW03-106

Project Type: Farmer/Rancher
Funds awarded in 2003: $14,988.00
Projected End Date: 12/31/2007
Region: Western
State: Washington
Principal Investigator:
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Project Information

Abstract:

SUMMARY

Our vision is to develop a mobile USDA meat-processing unit and the fixed infrastructure to support it. This would assist producers in increasing their profit margin through value-added sales of meat they produce.

OBJECTIVES

1) Producer outreach to finalize a list of interested producers
2) Exploration and determination of an organizational structure to own and operate the unit
3) Determination of how producers who wish to use the unit will be organized
4) Identification of issues to be addressed in a cooperative marketing effort
5) Evaluation of a consumer advertising campaign
6) Exploration of the potential for developing other cooperative efforts to improve the quality of meat production and improve producer returns in the county
7) Possible network for disseminating information and findings to member producers
8) Hiring of a qualified consultant to write a business plan
9) Hiring of a qualified attorney to formalize ownership and membership structure and review liability issues

RESULTS

This project has the potential to be a tri-county project, while also involving the Colville Indian reservation. We have begun collaborating with conservation districts, granges, Farm Bureau and others supporting this endeavor.

In investigating structures, we have looked at an array of possibilities, including cooperative, LLC, 501c(3) and Public Development Authority. We needed to find the legal structure that would give us the most flexibility in asking for and receiving funds from a wide variety of sources. We found that a cooperative unit couldn’t own a mobile unit under certain grant programs, and found the Public Development Authority (PDA) to be most suitable. We have adopted it as our legal entity.

We presented our idea to a local municipality, Okanogan City County, to draft a resolution that creates the PDA. The mayor appointed an ad hoc committee that met with the city attorney, who is doing research into the PDA process. We are meeting with the Okanogan County Commissioners and a committee formed from the Okanogan City Council to find the best way to form the PDA.

IMPACTS ON AGRICULTURE

The potential of a mobile USDA-inspected processing unit and accompanying infrastructure to give a greater share of the consumer’s dollar directly to the producer will make a significant and positive impact on ranchers. Having a local unit will reduce the time needed to handle the animals as well as eliminate the transportation stress on the animals and owners. The two closest processors are three and five hours away.

Through this project, producers could realize greater returns on their product if they take the effort to make it value-added and find a market. Though a profit is not seen in the first year, new market areas are opened, including restaurants, stores and selling individual cuts to customers and farmers markets.

PRODUCER ADOPTION

Some of the new activities that are anticipated include changes in finishing livestock (pasture-finished, grass-fed), extended breeding cycles (to ensure a year-round supply), on-farm composted offal and direct marketing strategies. Additionally, producers will receive training on composting offal, so that the entrails that stay on the ranch can be dealt with in an environmentally sound fashion and returned to the soil as nutritional amendments.

This project seems to have the most appeal for the small- and mid-sized livestock producers. Larger (200+ head) producers are skeptical as to the feasibility and logistical ability to process enough beef, and high-demand cuts, to consistently satisfy vendors.

RECOMMENDATIONS

To be successful, one must include a plan for the necessary infrastructure in the form of a cut-and-wrap facility and cold storage, both USDA approved, to support the mobile unit. Most of these operations quickly outgrew the mobile unit and small hanging cooler. We came to realize that upgrading current custom-exempt facilities to USDA status would be expensive. What is needed is a hanging cooler of sufficient size, a cut-and-wrap room and a flash freezer that can hold needed quantities.

The size of our county makes it impossible to find one convenient location for everyone. As a result, three regional gathering sites for processing need to be incorporated, with the additional USDA requirements of covered corrals, isolation quarters, telephone and Internet access and an office.

Cooperators

Click linked name(s) to expand
  • Jean Berney
  • Larry Brownlee
  • Tara Brownlee
  • Karla Christianson
  • Norman Suverly
  • Mark Timmerman
  • Tina Timmerman
  • Boyd Walton
  • Roy Webster

Research

Participation Summary
Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.