One of the biggest obstacles to small farm profitability in Michigan is the lack of convenient, affordable processing. Members of the Upper Peninsula’s Big North Farmers Cooperative in the Sault Ste. Marie area, for example, must travel upwards of 200 miles to Escanaba for meat processing. The hauling distance costs them time, money, and quality, says John Dutcher, one of several cooperative members now supplying local consumers with free-range, locally produced beef.

The rural area around the Dutcher farm near the eastern tip of the U.P., however, used to have several meat processors that served local growers. So did other communities across Michigan and the country.
 
One of the primary reasons these facilities now are far between is the high cost of regulations designed for much larger processing plants, says Dr. Lee Jan, president of the National Association of State Meat and Food Inspection Directors.

“The little guy kind of gets forgotten,” Dr. Jan says of the current system in Michigan and 22 other states. United States Department of Agriculture inspectors, strapped for time and staff, are the only ones on the job of both inspecting meat and helping processors understand complicated rules. “The small processor

that kills two or three or 200 head a day doesn’t get his questions answered in a timely manner compared to the large processor that kills 200 head an hour.”
 
But that’s changing in many states as economic developers and legislators recognize that more farmers need more processors to tap the huge market potential for new meat products — from organic chicken to specialty sausages.

Business Growth
Missouri and North Dakota are the latest states to reinstate meat inspection programs after having eliminated them, like Michigan, through budget cuts in the 1980s.

State meat inspection programs must follow the same regulations and provide the same level of inspection quality as USDA. But they are more valuable for farm business development because state programs can provide one-on-one assistance to smaller processors. That helps processors get into business, stay in business, and serve a growing number of meat marketers.
 
In Michigan
Michigan Department of Agriculture Director Dan Wyant says the state is open to rejoining the national total of 27 states that have meat inspection programs. In the meantime, it is working to help some processors, such as a large, farmer-owned turkey processing plant near Grand Rapids, meet federal requirements.

The cost of creating a state program is a significant hurdle, Mr. Wyant says, especially in a time of budget cuts.

The investment is arguably minor, however, compared to millions of dollars that state agencies put into other economic development initiatives. Dr. Jan estimates the average annual direct cost of a state meat inspection program is 1.8 million after the federal government pays half of the total.

The payoff for investments in state meat inspection is jobs, farmland protection, and development of new and important agriculture markets. Consumer demand for greater meat choices is growing at an astonishing rate, providing profit possibilities for a variety of farmers all across Michigan — from families selling at farmers markets to specialty companies creating their own brands of deli meats.

The market for organic meat, eggs, and poultry alone grew 64 percent between 1999 and 2000, according to the Organic Trade Association. Statistics for direct, local marketing of meat products in general are more difficult to find. But Dr. John Ikerd, professor emeritus of agricultural economics at the University  

of Missouri, says on-the-ground experience with locally produced poultry, for example, suggests demand is well beyond supply.

“I haven’t talked to anybody yet who could raise and process as many chickens as they could sell at almost any price they put on them.”

Poultry Possibilities
The potential for more Michigan farmers to supply consumer markets hungry for local, free-range poultry is even more immediate than in beef and pork markets, which require full-scale state or federal inspection. Federal regulations allow for a greater range of processing arrangements for poultry farmers who produce between 1,000 and 20,000 birds a year. Most states, including Michigan, allow farmers to process up to 1,000 birds on their own farms with basic state inspection of sanitary conditions.

The problem, however, writes agricultural law expert Neil Hamilton of Drake University in his book, “The Legal Guide for Direct Farm Marketing,” is that the federal rules “are so poorly written it is hard — even for the government officials — to determine exactly what they mean.”

That’s where Michigan and most states currently stand: In a gray regulatory area. As a result, no one from the state or federal government is providing clear guidance and inspection services so that farmers can move beyond the 1,000-bird limit into more profitable market territory.

Discussions are underway in Michigan on how to navigate the federal rules. Michigan Department of Agriculture officials recently met with farmers and USDA officials in a roundtable discussion that the nonprofit Michigan Integrated Food and Farming Systems organization initiated. MIFFS now is producing a manual as a result of the roundtable to help the state’s small-scale poultry producers work with state and federal officials.

Other states are coming up with action plans for helping poultry producers reach eager consumers. The Texas Legislature, for example, recently increased the number of birds that farmers can process on their own with basic health and sanitation inspections — versus costly bird by bird inspection — from 1,000 to 5,000 per year.

Contacts: Dan Wyant, Michigan Department of Agriculture Director, 517-373-1052; Dr. Lee Jan, Texas Department of Health, 512-719-0205, lee.jan@tdh.state.tx.us; Kevin Elfering, Minnesota Department of Agriculture, 651-297-7453, Kevin.Elfering@state.mn.us; Tom Guthrie, Michigan Integrated Food and Farming Systems, 517-432-0712, miffs@pilot.msu.edu

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