Enhancing Feasibility for Range Poultry Expansion

Final Report for LS99-105

Project Type: Research and Education
Funds awarded in 1999: $175,740.00
Projected End Date: 12/31/2003
Region: Southern
State: Kentucky
Principal Investigator:
Steven Muntz
Heifer International
Expand All

Project Information

Abstract:

Tools were developed to assist range poultry producers in improving feasibility to expand their operations. An entrepreneur’s toolbox to guide farmers in their desire for expansion was released through NCAT (National Center for Appropriate Technology) in 2003. Several other publications (a report on southern processing plants, a report on breed selection, a poultry nutrition report, a summary of laws regarding on-farm processing and a small scale poultry processing report) have been completed and are currently available through NCAT’s ATTRA program (Appropriate Technology Transfer for Rural Areas) and/or the American Pastured Poultry Producers Association’s (APPPA) website. Poultry processing needs were seriously addressed in Kentucky, Alabama and Mississippi, resulting in the first legally approved mobile processing unit built in Kentucky, modification of processing laws in Mississippi and the upgrading of a small USDA plant to include poultry on the Mississippi-Alabama border. These processing resources will help limited-resource farmers to raise pastured poultry and improve farm income.

Project Objectives:

The objectives of this project were to:

Develop a Feasibility Study Toolbox and Template

Improve infrastructure in terms of processing, nutritional and feed resources, and the quality of poultry stock for range production.

Introduction:

The production of poultry on pasture can contribute greatly to the development of vibrant and healthy regional food systems. There is strong and growing demand for birds raised locally without medications and in a wholesome, environmentally-sound manner. As a result of this demand, numerous producers have established successful small enterprises. Many of these producers raise less than 1,000 birds per year in order to take advantage of federal exemptions from processing inspection that are allowed in many states. In a previous 1996 project Heifer International, in cooperation with several partners, carried out a Southern SARE research and education project (LS96-76) to test the pastured poultry model with limited resource farmers in five southern states. Over thirty farmers participated and while the results of the project indicated potential for the enterprise they also raised many additional questions and issues. At the top of the list was access to legal processing facilities as some states did not allow the federal exemptions. Other issues included feed, labor and type of birds used. In order to expand their enterprises, producers need improvements in feasibility assessment and decision making processes. This is critical as farmers often focus primarily on production without adequately addressing economic feasibility, processing and marketing. The focus then, of this project, was to address the variety of additional questions raised by the1996 project and to help farmers understand how they might expand their enterprises through a feasibility assessment and business planning tool.

Cooperators

Click linked name(s) to expand
  • Holly Born
  • Anne Fanatico
  • David Redhage
  • Marion Simon

Research

Materials and methods:

Four geographical teams (AR/OK, KY, AL, and MS) worked closely together to meet our objectives. These teams each had their own team leader and communication among the teams was coordinated by Steve Muntz, Project Coordinator, and facilitated by a group listserv. Evaluation and planning of the project was conducted at the end of each year by teleconference with key participants.

Objective 1: Develop a Feasibility Study Toolbox and Template

Through extensive farmer involvement in HPI’s first pastured poultry project (SARE project LS96-76), we were well aware of the feasibility assessment and processing infrastructure issues faced by range poultry producers. In addition, to assure the usefulness of this work to as many end users as possible, we surveyed American Pastured Poultry Producers Association (APPPA) members regarding their feasibility assessment and infrastructure needs. NCAT staff designed a survey for APPPA which was inserted in an issue of their newsletter (national circulation of 500). One hundred producers responded to the survey and the data was collected and evaluated by NCAT/ATTRA.

With the aid of farmers, natural food industry advisors, and others we developed the publication: “Growing Your Range Poultry Business: An Entrepreneur’s Toolbox”. This toolbox addresses key feasibility assessment issues including: personal and family considerations, marketing, production and production systems, profitability, financial reality and budgets for small processing plants and additional scenarios. Two case studies of larger producers are included to provide real-life examples of how specific producers grew their businesses. One of these producers also created several “decision trees” for the toolbox which provide a visual guide for production, feed, processing, marketing, and distribution decisions. The toolbox also identifies numerous resources and resource partners that could be helpful to farmers as a template for feasibility assessment and/or funding. Throughout the publication general coaching tips are provided based on the experiences of many of the pioneers in this industry.

Objective 2: Improve infrastructure in terms of processing, nutritional and feed resources, and the quality of poultry stock for range production

A mobile processing unit (MPU) was designed, planned and built in Kentucky by a team that included Heifer International field staff, farmers, Partners for Family Farms, 1890 and 1862 land grant university personnel and the Kentucky Department’s of Agriculture and Health. The unit was built from a 20 foot gooseneck cargo trailer and customized by a small Kentucky company. A docking station with concrete pad, ice machine and all utilities for the MPU was built in Frankfort Kentucky. Another was started in Morehead, KY and will soon be completed. The MPU may only be utilized at an approved docking station. The MPU was given several test runs, and numerous operating and food safety plans were developed including Standard Operating Procedures, Sanitation Standard Operating Procedures, Hazard Analysis Critical Control Points, Good Manufacturing Practices and a Recall Plan.

Similar teams were assembled in Alabama and Mississippi to plan MPU’s for their states, but regulatory agencies were not as willing to cooperate in these states as they were in Kentucky and the teams had to find different alternatives. In Mississippi two workshops (2001 and 2002) were held to raise the awareness of poultry processing issues and encourage cooperation among numerous stakeholders including poultry producers, state legislators, state officials, and supporting organizations. In Alabama, Heifer field staff and collaborators began working with Blackwater Farms, a pastured poultry operation in Daleville, Mississippi, on upgrading an existing beef/goat/emu processing facility on the MS-AL border to include poultry processing.

In addition to these state processing efforts, regional and national progress was also made. NCAT developed a publication detailing the many aspects of small scale processing and comparing different processing options. Legal research was accomplished through this project and a summary of federal and state laws regarding on-farm processing for all fifty states was completed in 2001. Also compiled was a publication listing inspected poultry plants in the Southern SARE region that process or would consider processing poultry from independent producers.

Poultry raised on pasture have somewhat modified nutrition requirements than those raised in confinement. Through this project, a report, entitled “Pastured-Raised Poultry Nutrition” was developed that covers feed ingredients, feed preparation, feeding issues, and ration formulation. Finally, a report on genetic options for pastured poultry producers was developed. This cutting edge information helps small producers in the USA and even abroad.

Research results and discussion:

Natural poultry production is a two-tiered industry. Big business is getting into natural and organic production with large flocks, but the hundreds of pastured poultry producers who raise small flocks do so on family farms. NCAT established a baseline snapshot of pastured poultry producers and their enterprises in early 2000 through a survey of the APPPA membership. Of the 100 respondents to the survey, 87% produce products other than poultry. Nearly 80% raised less than 1000 broilers per year and 63% had gross incomes from broiler production of less than $5,000. Direct marketing was the key marketing method (80%). Both broilers and layers were raised by 69% of respondents and 31% also raised turkeys. Processing was accomplished on-farm in a non-inspected facility by 73% of respondents. Ninety percent of respondents were interested in a government inspected mobile processing unit (MPU) available for on-farm use (55%) or within 50 miles of the farm (35%).

Most (82%) of the responding producers wish to expand their business, but only a small percentage (5%) hope to expand beyond 10,000 broilers per year. Of those wishing to expand 40% indicated that they would do a feasibility study and 48% would do a marketing study. Only 4% would be willing to pay over $500 to conduct a feasibility study or a business plan.

Cornish-cross is the primary meat breed used by producers and 65% indicated satisfaction with their breed. There was significant interest in purchasing chicks from pastured breeding stock, particularly if there was no price difference (89%). Still, over half (56%) indicated a willingness to purchase higher priced chicks which originated from pastured breeding stock.

Feed sources for producers are mixed. Most producers use a custom feed (70%) but many have trouble finding the necessary ingredients. Commercial feed is used by some of responding producers, but many have trouble finding feed that is non-medicated. 72% of respondents indicated an interest in organic feed. Ration formulation can be an issue for producers and 29% indicated a willingness to pay for formulation services.

Finally, 85% of responding producers indicated an interest in collaborative work or purchases.

This snapshot survey proved very informative to us as we were beginning our project. Over the next three years significant advances for this small industry were made in several of the areas identified from the survey. These advances (described below) should lead to greater success for those desiring to participate in the industry.

1. Feasibility. The entrepreneur’s toolbox developed through this project is the perfect starting place for potential new growers, small growers who wish to expand their production, groups of growers who wish to work together or those who may wish to pursue the development of a small-scale processing plant. The toolbox is a holistic planning tool that helps producers consider all aspects of the business. It is the first such tool available for the industry and its use should result in greater professionalism and a higher degree of success all the way from the first chick to the first check.

2. Small-scale processing. Significant milestones were accomplished through this project in the area of processing. Access to processing is critical for small-scale producers, but many don’t know the basics involved in processing or how they should go about processing for their operation. At the same time, some people see the opportunity arising to provide small scale processing facilities to the increasing number of producers. With these issues in mind, NCAT developed “Small-Scale Poultry Processing”, a comprehensive review of the many issues faced by producers and processors or potential processors. The document compares types of processing and explores numerous other issues such as packaging, delivery, aging and waste management. Layouts for small scale plants and mobile processing units (MPU’s) are provided, equipment needs are reviewed and economics are considered.

MPU Development. After countless hours working with various federal and state departments, developing numerous planning documents, setting up management structures and operating agreements, a Mobile Processing Unit (MPU) for small livestock species was approved for operation in the state of Kentucky. The MPU is exempt at the 20,000 bird level per producer from federal inspection for poultry and was approved for chicken, turkey and freshwater shrimp processing through Kentucky’s state department of Health. This is a huge accomplishment in light of the fact that prior to development of the MPU, Kentucky did not have a processing plant in the entire state that would legally process poultry for independent producers seeking to resell their product. Trainings for MPU usage were conducted in 2001, 2002 and 2003. To date, approximately 3,800 chickens and 4,000 pounds of freshwater shrimp have been processed through the unit. The Kentucky MPU is considered a pioneer of mobile processing in the USA and many aspiring groups, including the Humane Society of the United States, and individuals have visited or requested information about the MPU.

Law Modification in Mississippi. Significant processing milestones in Alabama and Mississippi were also attained. As a result of the two meetings sponsored by Heifer and SARE in Mississippi, a new law passed stating that state law may not be more stringent than federal law regarding exemptions for poultry processing.

New USDA Plant in Mississippi. Another outcome of the meetings mentioned above is that Heifer field staff and collaborators in Alabama began working with Blackwater Farms, a pastured poultry operation in Daleville, Mississippi, on upgrading an existing beef/goat/emu processing facility on the MS-AL border. By June 2004, with ongoing assistance from Heifer, the Mississippi Department of Agriculture, USDA-FSIS, and other entities, Blackwater expects to be ready to process chickens and turkeys under USDA inspection out of this facility.

Producers outside of Kentucky, Mississippi and Alabama now have additional tools to help them with processing decisions. Many producers would like to know what their states allow in terms of on-farm processing of poultry. Unfortunately they often do not know who to ask about this issue. When they begin their research they generally find themselves in conversations with low-level regulatory officials who don’t really understand their questions and who pass them on to another agency, which in turn passes them somewhere else. It is now possible to avoid much of this frustration through the publication “Legal Issues For Small-Scale Poultry Processors” which was compiled in 2001. Now producers have a starting place to determine if their states allow the option of on-farm processing. Though individual producers should conduct more in-depth research on this topic, they now have the basic background for their states and contacts on how to find additional information.

Producers in the SARE’s Southern Region have the additional tool of a newly available document “Poultry Processing Facilities Available for Use by Independent Producers in the Southern Region”. This document is provided for those producers who do not wish to process on the farm and are looking for an inspected plant to which they may take their poultry for processing. The brevity of this document is a milestone itself. In the thirteen states and two U.S. territories researched only eleven plants were identified whose managers were willing to consider doing custom slaughter and processing for independent producers. Six states and the Virgin Islands had no options available to them at all. Although this widespread lack of facilities has been assumed by many producers, it is confirmed by this research.

3. Nutrition. Most current information regarding poultry nutrition was established based on the dominant model of confined poultry. Through this SARE project, producers now have a new tool with which to understand nutrition for poultry raised on pasture. The publication “Pasture-Raised Poultry Nutrition” was completed in 2002 and explains the feed requirements of pasture-raised poultry and how to meet them.

4. Genetic Options. While the systems of production are quite different, pastured poultry producers often purchase and raise birds selected for intensive production in large houses. This is often done because of lack of information about breeds more adapted to outdoor production. “Which Bird Shall I Raise” identifies the genetic options, including slow growing “Label Rouge” type broilers, popular in Europe, available to pastured poultry producers. It also considers the various factors in deciding upon these options and provides contact information for some of the less frequently available lines.

Participation Summary

Educational & Outreach Activities

Participation Summary:

Education/outreach description:

The following publications were developed as a result of this project. Most are available on a sustainable poultry website developed by NCAT at www.sustainablepoultry.ncat.org or a hard copy may be obtained by calling ATTRA at 1-800-346-9140. The website also has a highlight about this project to continue reaching small farmers.

Creating Kentucky’s Mobile Processing Unit. 2002. Tess Caudill, Kentucky Department
of Agriculture, Steve Muntz, Heifer International, Sue Weant, Partners for Family Farms.
7 pp. Available from Heifer International (110 N. Maysville St. Mt. Sterling, KY 40353)
or the Kentucky Department of Agriculture (Tess Caudill, KDA, Frankfort, KY) or by
calling ATTRA at 1-800-346-9140.

Growing Your Range Poultry Business: An Entrepreneur’s Toolbox. October, 2002.
Anne Fanatico, National Center for Appropriate Technology and David Redhage, The
Kerr Center for Sustainable Agriculture. 62 pp. Available from
www.sustainablepoultry.ncat.org or hard copy by calling ATTRA 1-800-346-9140.

Kentucky’s Mobile Processing Unit, Poultry Training and Use Manual. 2001. Jeff
Dombroskas, Heifer International, Tess Caudill, Kentucky Department of Agriculture,
Dr. Benjy Mikel, University of Kentucky, Steve Muntz, Heifer International, Dr. Tony
Pescatore, University of Kentucky, Mac Stone, Kentucky State University. Available to
participants in MPU Facility Manager training for $50.

Legal Issues for Small-Scale Poultry Processors, Federal and State Inspection
Requirements for On-Farm Poultry Production and Processing. December 2001.
Compiled by Janie Hipp, J.D., LL.M., Edited by Skip Polson. 72 pp. Available from
www.sustainablepoultry.ncat.org or hard copy by calling ATTRA 1-800-346-9140. Also available from www.apppa.org

Pastured Poultry Producers Speak Out! Summary of a Questionnaire. 2000. Anne Fanatico, National Center for Appropriate Technology. 10 pp. Available by calling ATTRA at 1-800-346-9140.

Pasture-Raised Poultry Nutrition. November 2002. Jeff Mattocks, Poultry and Livestock
Nutritionist, The Fertrell Company. 37 pp. Available from
http://www.apppa.org/APPPA/resources.htm or hard copy by calling ATTRA at 1-800-
346-9140. Also available from www.apppa.org

Poultry Processing Facilities Available for Use By Independent Producers in the
Southern Region. April, 2002. Skip Polson, Heifer International. 12 pp. Available from
www.sustainablepoultry.ncat.org or hard copy by calling ATTRA 1-800-346-9140
Also available from www.apppa.org

Small Scale Poultry Processing. May 2003. Anne Fanatico, National Center for
Appropriate Technology. 40 pp. Available from
www.sustainablepoultry.ncat.org or hard copy by calling ATTRA 1-800-346-9140.

Which Bird Shall I Raise? Genetic Options for Pastured Poultry Producers: Meat-type
Chickens and Turkeys. February 2003. Skip Polson, Heifer International and Anne
Fanatico, National Center for Appropriate Technology. 11 pp. Available from
www.sustainablepoultry.ncat.org or hard copy by calling ATTRA 1-800-346-9140.
Also available from www.apppa.org

These publications are distributed to hundreds of farmers and agricultural professionals
each year. In addition, ATTRA did a mailing of the Small Scale Poultry Processing
publication and the Entrepreneur’s Toolbox to about 200 people in
2003. Most of the publications were also distributed through Kentucky State
University’s “Third Thursday Thing” (a SARE PDP supported project) in May of 2003.

In addition to the publications, numerous outreach activities were held throughout the life of the project. Key events are summarized below:

June 6, 2000: MPU Ribbon Cutting Ceremony, Frankfort, KY. Approximately 50
people participated in the formal introduction of the MPU to Kentucky, including the
Kentucky Commissioner of Agriculture and acclaimed author and farmer Wendell Berry.

June 24, 2000: “Food Safety Meets Market Access” meeting, Gainsville, FL.
Approximately 40 farmers, regulators, and others gathered to share concerns regarding
poultry processing issues.

May 29-30 2001: MPU Training, Frankfort, KY. The first formal training conducted to
approve MPU Facility Managers. Ten individuals were approved.

November 8, 2001: “Processing Regulations Affecting Small Farmers” meeting,
Jackson, MS. Over 40 people, including farmers, veterinarians, meat inspection officials
and legislators participated in this event which highlighted the meat processing struggles
faced by small farmers in the state.

April 26-27, 2002: “Small Poultry Processors/Range Poultry Expansion Feasibility”
meeting, Fayetteville, AR. Twenty-two participants reviewed and evaluated the
feasibility toolbox and shared information regarding small scale processing and
participated in educational tours of small and large-scale processing plants.

June 3-4, 2002: MPU Training, Frankfort, KY. The second annual training conducted to
approve MPU Facility Managers. Five individuals were retrained and eight new people
were trained.

October 17, 2002: “Saving the Small Family Farm” meeting, DeKalb, MS. Over 50
people participated in this event intended to inform legislators about meat processing and
other issues farmers face in providing a legal market for their product.

July 24-25, 2003: MPU Training, Frankfort, KY. The third annual training conducted to
approve MPU Facility Managers. Six individuals were retrained and eight new people
were trained.

Project Outcomes

Project outcomes:

This project has taken range and pastured poultry production to the next level of professionalism. New bridges have been built between producers, consumers, regulators, universities, legislators and non-profit organizations all in the attempt to firmly establish a successful range poultry industry in the south. Producers have many additional tools at their disposal to assist them in beginning and developing their poultry enterprise. Processing issues are finally being seriously addressed in states where little had been previously accomplished. While the industry is still in its infancy, signs of maturity are beginning. In Kentucky, for instance, in addition to the development of the MPU, a new USDA inspected processing plant will open in 2004. Also in Kentucky, a new small-scale hatchery and poultry supply company began operation in 2003. While not directly related to this SARE project, these new businesses, providing much needed infrastructure, are an indicator of an industry poised for expansion.

Economic Analysis

Budgets for pastured and day-range poultry systems as well as mobile processing units and small scale processing plants are reported in the NCAT publication: “Growing Your Range Poultry Business: An Entrepreneur’s Toolbox,” which was developed as part of this project. The publication can be downloaded from the ATTRA website: www.sustainablepoultry.ncat.org

Farmer Adoption

Producer interest in pastured and range poultry production continues to be high throughout the south, particularly in the states in which this project focused. In Kentucky a new organization, “New Traditions Poultry” is being formed to help provide leadership and organization to alternative poultry producers in Kentucky. In 2004 it will be possible for many Kentucky farmers to purchase their pasture-bred chicks from a state hatchery, purchase most feedstuffs locally and process in a plant (MPU or otherwise) within 75 miles of home. As a direct result of this project, in Mississippi and Alabama, Heifer International staff is working with Blackwater Farms to develop a regional poultry marketing network. Through a separate grant, Heifer has provided some funding and technical support in getting this network, which will includes pastured poultry producers from both sides of the state border, off the ground. Farmers working with Heifer International and other producers will be able to use the Blackwater facility for processing and will have the option of marketing their own birds or marketing through the network

To date, seven farmers have utilized the MPU and have processed about 3,800 chickens and 4.000 pounds of shrimp. Farmer adoption of Kentucky’s MPU has been slower than anticipated due to lack of access to a docking station for the unit, high establishment cost of docking stations, lack of affordable liability insurance products and limited numbers of farmers who are willing to do their own processing. The first two issues have been addressed, the third continues to be a struggle and the fourth will always be an issue. Recently an MPU Coordinator has been hired to take charge of all MPU activities and build support for utilization of the MPU. The MPU continues to be a groundbreaking pioneer for those interested in mobile processing.

It is anticipated that farmer adoption throughout the south will continue to build as publications developed from this project become more widespread.

Recommendations:

Areas needing additional study

It is exciting to watch a small industry that supports local and regional economies come into existence. The survey taken by NCAT/ATTRA in 2000 provides some good baseline data about this industry. A follow-up to that survey in 2005 and 2010 would prove very informative regarding the development of the range poultry industry, and the practices of range poultry producers.

Processing and the associated liability that comes with it continue to be limiting factors to successful marketing of value-added meat products by small farmers. Statewide efforts involving farmers, consumers, regulators and others will be necessary to improve this situation.

Interest in mobile processing units is very high in the country right now, in part, because of the work accomplished in Kentucky. A large animal MPU in Washington State began operation a couple of years ago and a poultry MPU is also planned. As more of these units come into production, shared learning will be critical in order to find the model(s) most likely to succeed in any given state.

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.