2005 Annual Report for FNC01-351
Developing Added Value, Convenience Products From Free-Range Pastured Chickens
Summary
Tom Neuberger of Canistota, SD along with six other group members used a 2001 SARE grant to develop more added value and convenience products from free-range pastured chickens. The farm used for this project consisted of 160 of grass that was used by the chickens in this project, as well as cattle and sheep. A poultry processing facility is also located on the host farm.
Tom and his group members were searching for new methods that would add more value and income to their operation. Rather than purchasing more chickens, they were looking at ways of improving the chickens that they already had. The SARE grant assisted them in acquiring the equipment and supplies necessary to create products that would not only increase the profits of the farm but also provide convenient products to consumers.
Through further processing of the chickens, they were able to come up with several new products such as, cut-up chicken, split and quartered chicken, ground chicken, BBQ wings, chicken snack sticks and even dog food. The products require a variety of processing techniques and involve different amounts of time and effort before they can be completed.
Throughout the second year of the project, a local family was employed to be an independent contractor and actually produce the eight products that were created in the projects first year. Individuals were able to purchase these products at a local farmers market and at the farm. Through a direct marketing plan that has been used for 21 years, they have generated a customer list of over 3,000. A newsletter is periodically is also sent out to illustrate the current prices and products that they have to offer.
While this project did not receive a profit due to such large labor costs and time spent producing the products, it does confirm that advantages can be obtained from a process such as this one. “This project illustrates that a producer providing his own labor can earn themselves added income in proportion to the value of labor involved with producing the added value products from their own operation of free-range chickens,” explained Neuberger.
The breakdown of labor and cost for this project shows that to produce the eight products for the years of this project, a producer could further the process of about 5.42 chickens per hour. Also when using a nine dollar per hour price for labor they could add $1.66 worth of value to each bird that is raised. Neuberger also noted that there are several factors that could alter the results of the project, including location and demand for the added value products.