Final Report for FW04-040
We studied the feasibility of purchasing and operating a Mobile Poultry Processing Unit (MPPU) in Washington’s Methow Valley and surrounding areas, believing it the most feasible form of processing.
After gathering information, completing our project and investigating and evaluating processing facilities, we concluded the following:
1) Building a local mobile unit or stationary Washington State Department of Agriculture (WSDA_ processing facility for poultry requires processing a breakeven number of poultry that greatly exceeds current local production but one that the local market could support.
2) Building a WSDA stationary poultry processor is comparable in cost to building an MPPU. But it has more non-financial benefits: easier to permit, easier to schedule, more efficient, provides better product quality control and has the least impact on our farming operations.
3) A market exists in the Methow Valley and surrounding areas for locally grown organic, natural or other direct-niche-marketed poultry. A standard high-volume production model for poultry is not feasible in our area because of distance from feed sources and markets.
We found the best way to serve our needs and the needs of other local poultry producers is to build and operate a small WSDA stationary processor that can double as a certified kitchen. We base this conclusion on indirect benefits and the initial costs. Ideally, by establishing a local poultry processing facility we will also increase the economic viability of small family-owned farms in the Methow Valley and surrounding areas.
We aimed to determine the best way to meet our poultry processing needs and those of other local producers, thereby increasing local poultry production and the economic viability of small family-owned farms in the Methow Valley and surrounding areas.
As with all livestock production, processing an animal is only one component in a sequence of steps to bring a product to market. To study the feasibility of the MPPU, we needed to understand the components involved in poultry production: production, processing and marketing.
To determine the major limiting factors in production and marketing, we raised 200 broilers and 50 turkeys in our project. We raised the animals from day old chicks, processed them and marketed locally.
As a basis of comparison to evaluate processing, we financially compared four different processing facilities at a scale supportable by local production. The four processing facilities included a WSDA mobile processor, an on-farm processing facility meeting the Washington State 1,000-bird exemption, transporting to Spokane for processing and a stationary WSDA processing center. Research to develop each plan included review of existing facilities, correspondence with other operating MPPUs, cost estimating and cash-flow projecting.
We worked in conjunction with local producer Florence Sawyer to raise, process and sell 200 free-range broilers. Crown ‘S’ Ranch raised, processed and sold 50 free-range turkeys. One important goal was to obtain hands-on experience with the production, processing and marketing of poultry, with our two primary costs being feed and processing.
Our experience in the processing portion reiterated the benefits of producers controlling the processing facility. When birds are not slaughtered at the desired weight, their marketability is negatively influenced. For example, we were required to schedule processing two weeks in advance but found it extremely hard to predict what time the birds would hit our target market weight.
We have found that by targeting the niche market of natural free-range poultry (supplemented only with organic feed), there is a large market willing to pay a premium for our product. At $4.95/lb, our product was priced high but sold quickly.
We found the turkeys were easier to sell than the chickens because people spend more money on a “special occasion” bird. Our whole birds sold better to rural families with children. Most urban dwellers wanted the chickens further processed for ease of meal preparation. Having proper presentation (shrink-wrap bags and good labeling) is essential to selling poultry.
Through consumer education and with a larger production model, we could reduce the costs of production, thus reducing the selling price and increasing the local market.
After researching and evaluating our four processing options, we recommend building a WSDA stationary processor with a basic four-bird plucker and scalder that can double as a certified kitchen, which allows us to further process our poultry and to produce value-added products. Ideally, establishing a local poultry processing facility will also increase the economic viability of small family-owned farms in the Methow Valley and surrounding areas.
BENEFITS OR IMPACTS ON AGRICULTURE
Based on this project, Crown ‘S’ Ranch constructed its own multipurpose stationary WSDA poultry processing facility and certified kitchen. This approach gives us better control over our product; provides additional fertilizer for our pastures, allowing us to increase the number of supportable grass-fed cattle; provides the ability to further process our poultry; allows us to produce value-added products and provide the farmers/producers of our community with a local WSDA processing facility.
The producers questioned were excited about the prospect of local processing, primarily because they would like to raise meat birds for themselves and maybe a few friends. Most producers/farmers view raising poultry as a high-labor, low-profit venture. Thus, creating a niche market is equally as important as building a local processing facility to cause an increase in local poultry production.
REACTIONS FROM PRODUCERS
Farmers/producers liked the idea of being able to buy and sell poultry locally. During this project, we found there is a high demand for locally grown and processed birds from retail stores, restaurants and families.
Further studies that could benefit the farmer/producer include:
1) Exploring direct niche marketing to determine what niche market would work best for our community.
2) Assistance in setting up the framework to direct market poultry such as labeling, packaging, website and an advertising campaign.
3) Further exploring and solving the difficult areas of poultry production discovered through our project, including customer education, transportation, packaging, marketing and labeling.
4) If the poultry industry takes off and expands in our community, further study would be required to upgrade processing capabilities.
To communicate our findings to farmers/producers we held our first community outreach meeting in July 2005 at the Community Center in Twisp, Washington. There was a very low turnout, two individuals, which we originally attributed to the time of year. July is an extremely busy time for farmers/producers.
We waited until early March 2006, a less busy time for farmers/producers; however, the turnout to this second community outreach meeting was also low, three individuals. We believe the interest was low because most producers/farmers view raising poultry as a high-labor, low-profit venture.
We contacted our local paper, the Methow Valley News, and they did an extensive article in April 2006 on our Mobile Processing Feasibility Study. This article conveyed information obtained in our study to our community. We have also posted our study on the Crown ‘S’ Ranch website www.crown-s-ranch.com.