Transcript
Speaker: Welcome to the Direct Farm podcast, the go to resource for farms across the US looking to grow and manage their business. Tune in weekly to hear tips and tactics from our most successful farmers on how to increase sales, access more customers and save time and money. We'll also speak with industry experts, business leaders and partners to share the latest farm business trends selling direct to market.
Speaker: Welcome everyone to the Direct Farm podcast. We've got a great conversation for you today with the Farm to Consumer Legal Defense Fund, or FTC -LDF. They are a nonprofit organization made up of lawyers serving farmers by protecting, defending, and broadening the rights and viability of independent farmers, artisanal food producers, and their consumers.
Speaker: This is the eighth episode in a series of podcasts with the Farm to Consumer Legal Defense Fund, each highlighting a different farm product, our policy, and some of the legal challenges associated with it. Today, we're going to be diving into processing and the legal aspects associated with selling proteins direct to market through a processor.
Speaker: I'm delighted to welcome Alexia Kovic, who is the executive director of the Farm to Consumer Legal Defense Fund. She is a licensed attorney in Illinois and Wisconsin, having practiced law for over 20 years. Her experience has inspired her interest in US agriculture, promoting small scale farmers and sustainable farming, and protecting the rights of independent producers across America. Welcome, Alexia. It's great to see you again. Thanks for having me back. We're so pleased to be here.
Speaker: Well, it's been a long time. I'm really delighted to get back on the horn with you and dive into another topic that I know you're super passionate about. There's probably a big issue that you probably talk to farms about all the time. But before we dive into processing, let's talk a little bit more about the Farm to Consumer Legal Defense Fund. Tell us a little bit about your role, how to get started and what's the mission of the Farm to Consumer Legal Defense Fund? Sure. Yeah. Thank you. So the Farm to Consumer Legal Defense Fund is a nonprofit organization, as you've said, you've
Speaker: much described our mission, which is really ensuring that independent farms and food producers can sell their products to consumers and remain economically viable. But what we really mean by that in a lot of ways is to help small farms, independent food producers through the process where the regulatory process can be extremely burdensome in terms of producing food and selling it
Speaker: directly to the consumers. And so we help those producers with the regulatory process with federal and state and local regulations that may be difficult to remain a small independent farm and to work on policy to try to make things easier for smaller producers to provide food directly in their communities.
Speaker: Well, today's topic is one I'm sure you're very passionate about. I know it's something that caught my interest when I was learning more about food several years ago. And first off, many Americans are probably becoming more aware of this, certainly coming out of the pandemic and all the constraints that processors had on our food supply in America.
Speaker: So let's just talk a little bit first about the processing industry generally and just the general legal factors to be aware of when processing animals and selling them direct to market. What are the two or three kind of big topical issues before we dive into them when thinking about getting your meat processed? Yeah, sure. Well, one thing I'll say, and then I'll get into, I guess the three areas is from a small farm perspective,
Speaker: The issue has very much been how to get to a facility and have your animals processed in a way that complies with legal requirements.
Speaker: and then sell that to your consumers. And what I mean by that is they just haven't been able to get into these facilities. So it has created a real problem with supply and pipeline. A farmer can't just usually raise animals, slaughter and process the animals and sell them to their consumers, to their customers. To sell meat products, by which I mean beef and lamb primarily, that animal has to be
Speaker: brought to a USDA federally inspected facility to be slaughtered and processed before the cuts of meat can be sold to the consumer. A different option for a producer may be a state inspection facility, which is required to have standards that are equal to or greater than the federal facilities. And then there are something called custom slaughter facilities where facilities that actually slaughter and process animals
Speaker: for owners of the animal. So that's intended to be a very intimate relationship for the owner of an animal.
Speaker: Got it. You mentioned too, just trying to get time in with processors has been a real challenge. I know many of the farms and ranches we work with across the country have had real difficulty not only finding a process that's proximate to them, but securing kill dates well in advance to ensure that they can actually harvest their animals in a timely manner when they're ready to be harvested, right? Because, you know, if you're only harvesting two to four or maybe eight head a month,
Speaker: That's not a large volume or quantity for many of these processors who are looking for more scale. Yeah, it really has been a huge problem for a small independent farm. They can't maintain, like the slaughter data is pretty important to their profitability, right? So in other words, they can't just maintain an animal indefinitely until a processor is willing to take them. So we have these regulations that require bringing animals to very specific facilities
Speaker: but then it is difficult for the rancher or farmer to actually get dates to bring in for the slaughter or processing. The larger producers, high volume production really takes priorities at these facilities and it's created a real problem for local farms and local consumers because we want our products from our local locally produced and sourced places and that's been a real struggle.
Speaker: Well, to start with, let's dive into each of these three processing options for farmers. And let's start with the gold standard, the USDA certified processors, right? So, you know, these are obviously the highest demand. They are the benchmark because products from there can be sold anywhere. What makes a processor USDA certified? How does a processor qualify to be USDA certified? Yeah. So if you're a processing plant, for example, you would go through a pretty strenuous process with the USDA.
Speaker: to become a federal inspection facility. You will have certain sanitation operating procedures in place. You will need to have a HACCP plan, which is a hazard analysis and critical point plans in place, meaning that as meat or animals move throughout the facility, there are control measures to make sure that nothing gets contaminated to protect the health of the meat that's produced.
Speaker: So they're going to have to meet these sanitation requirements. They'll have to have these HACCP plans in place. The US government will have to come and inspect the facility and make sure that the flow in the facility works, that there are appropriate water flows, that there's appropriate flow for the animals. There will be requirements that they meet the Humane Slaughter Act. But the big deal, I think, with USDA inspection facilities is that there has to be a USDA inspector on site
Speaker: any time animal is slaughtered and processed. So even if the facility has all of the right regulatory requirements met, they still have to have an individual, an actual person, an inspector onsite when the slaughter takes place. And as you said, it is the most desired a lot of times because for meat to be sold across state lines, it has to have been inspected at a USDA inspection facility under the Federal Meat Inspection Act.
Speaker: Got it. So farms who process their meat at a USDA facility will then have the ability to sell not just intrastate, but intrastate across state lines and all available avenues that include both retail and wholesale. Is that correct? That's correct. And they also can sell direct from the farm. They could ship. They could potentially sell to a restaurant or to a retail facility. But the across state lines is the big distinction with a USDA facility.
Speaker: Well, and I imagine particularly in a place like the upper Midwest where you are in Wisconsin or people up in the Northeast and where you're living in places that have, again, a lot of proximity with neighboring states. It's very easy to get caught up with products that would readily serve as demand in a state across state lines. If you're a producer in Vermont, you've got Boston very nearby. If you're in Maryland, you've got Virginia nearby. So there's some pretty, pretty big ramifications here, particularly for some of those states.
Speaker: we're getting to USDA processor would be really critical. And your internet sales of course these days. Oh yeah of course. Like barn to door are having a big impact. Yeah driving a lot of demand but the good thing there is that farmers could choose to just limit it to people who are within a certain state or location which is one of the fun things too is that you can create an audit trail to prove that meat even sold over the internet sold across state lines it's actually picked up
Speaker: intrastate, so long as the product is picked up intrastate that's generally considered compliant. Let's talk about state processors, which are probably the next most common processing option. What's the difference between a state processor and USDA certified processor? Yeah, so state processors are pretty similar and in that they will have to meet the similar sanitation operation procedures requirements. They will have to have these HACCP plans in place.
Speaker: And by the way, not every state has state inspection facilities. So I really don't know the numbers. I don't know that they're more common, but they also have to have an inspector on site. But essentially what happens with a state inspection facility is the regulations as to the operation of the facility have to be as good or greater than they are in a USDA facility.
Speaker: Great thing then about a state inspection facility is that the state can support creation of another facility or facilities, make sure that there are inspectors that will have to pass muster with the USDA, but they don't have to wait, for example, for the USDA to open more facilities in that state. A state can take action, can provide funding, open more state inspection facilities. They will have to meet the same requirements as USDA. They'll have an inspector on site.
Speaker: The big distinction with the state facilities is that the products can only be sold intrastate or in the state where that facility is located. For the most part, there is an exception to that, but for the most part, that's the rule.
Speaker: That's a really great thing that states have this level of control, given how large the demand is in many states, state like where you're in Wisconsin, which has a really vibrant local food scene where I'm at here in Washington, California, Texas, Florida, Minnesota, there's just a lot of fantastic states.
Speaker: with very robust economies, just even within their own state that could readily support local producers who just want to use a state processor. And that's probably more than sufficient to be able to build a very good livelihood and good income, but obviously would have some limitations. Well, lastly, let's turn over to custom processors, which is probably a bit less common. These farmers are hunters who might be more familiar with that. Oftentimes used for wild game and for different animals you might get
Speaker: with your rifle or with your bow. Can farmers use a custom processor too for food sales? They can use custom operations as a method of helping consumers obtain an animal and then meat for their own consumption.
Speaker: So really talking like lawyerly right now at this moment. You're right. The customs facilities started with hunters. And the idea was that they existed to slaughter and process game animals. And they were then exempt from the USDA, the federal maintenance inspection act and the state inspection acts by doing slaughter and processing of an animal brought in by the hunter.
Speaker: to be consumed by that hunter and his or her family. That's how they started. But yes, farmers and ranchers can use these facilities. And we have seen, they started doing so, for example, if they didn't want to have to slaughter and process their own animals. So maybe they raise the animal, they want to eat the meat from that animal, but they don't want to be having to process and slaughter on their own. They can take that animal to a custom slaughter facility, take the meat from the processor and consume it within their household.
Speaker: What has started becoming more common for small producers to work with consumers is to sell
Speaker: a live animal or a share in a live animal that the consumer then is the customer of the processing facility. It's their animal. So it's allowed for them to be able to consume their own animal under the exemptions to the federal inspection requirements. Now this does vary state to state and how it works will vary state to state. So I want to be careful about that. There are a few places that don't allow this that say,
Speaker: It has to be an animal that you've raised to come to a custom facility as a farmer and then have it processed. But most states are allowing as long as you are the owner of that animal, you can then consume the meat that's been produced and processed at a custom facility from your own animal or proportionately a share in your own animal.
Speaker: That's fantastic. It's great to see farmers get creative in terms of like avenues to be able to feed their communities and also sell their products while still being in compliance with the law. Obviously very important. Let's talk a little bit about the packaging or disclosure obligations.
Speaker: say I'm purchasing an eighth of a share in a cow. I'm just a general consumer. I have no understanding of these different types of processors or anything like that, nor do I care to. I just want to buy some good grass -fed beef for my family. That's some food security concerns. I want to make sure I've got meat for all my fall roast and for all my barbecuing. So if that's the case and I go pick up the product, there's some
Speaker: Packaging or disclosure obligations does a farmer have to tell the consumer that this is being custom processed? Sometimes you see stamps on packaging that say not for resale. Like what things does a farmer have to think about in terms of packaging and disclosure? Yes. So first, I do want to say in this instant, the use of a custom processing facility, a consumer isn't purchasing meat.
Speaker: And I just want to be crystal clear about that. I don't want someone coming after me. They're purchasing a share in a live animal or a live animal. And the reason the shares are so useful, you know, city dwellers don't want an entire beef cattle sitting in their freezer for, you know. They probably don't have a chest freezer in their city apartment.
Speaker: don't have one. And I do know in the beginning of COVID, there was like a run on them, you couldn't get like a chest freezer was interesting. But in any case, I just want to be clear, you're buying the live animal. And then what the law says is that the custom processing facility can provide the processed meat to that consumer for consumption themselves or their own family, it is prohibited to resell that meat. So yes, in order for this to work under the exemptions,
Speaker: federal law requires the custom slaughter facility to stamp the product with not for resale and the consumer is not allowed to then take that and resell it. So if I were to own an animal, bring it to custom slaughter, have them slaughter and process it, I can't take those meat products
Speaker: and resell them to someone else. That is prohibited. And so there's limitations to what you can do with the custom slaughter facilities, but that's why we see these labels about not for resale. It just means that it's been at a custom facility process for a household, for household use. And I do want to point out that the custom slaughter facilities have to meet all of the same regulatory requirements as USDA and state in terms of their sanitation and their HACCP plans and sort of other requirements just to make sure
Speaker: that the meat is being processed in a way that is healthy. The only difference in these facilities is that you do not have an onsite inspector every time an animal is slaughtered and processed. So sometimes people react like, well, I kind of want all those requirements. The requirements are still there. You just don't have the onsite slaughter and process.
Speaker: And because they're so small, it really isn't as necessary, right? Because the processor can, I think, do a better job of ensuring that health and safety. What about a state inspected facility? Is there any labeling requirements on that that a farmer needs to make sure or communicate to buyers when they're purchasing a share in an animal? Yeah.
Speaker: A state inspected facility similarly does have to have a stamp on it saying that this meat has been inspected at the state. You can resell state inspected meat, but again, it has to be within the state. And I'm pausing because I'm not 100 % sure if those packages have to say, you know, only for sale in such a such a state.
Speaker: That could vary from state to state, I would imagine. Yeah, I think that's not crystal clear. And it probably does vary from state to state, but there does have to be some indication that the state inspection program was involved. So you will know that this meat was inspected by, you know, an Illinois state inspected facility.
Speaker: I'm just not entirely sure what else the labeling does require. Alexia, I have to admit, you can't know everything, neither can I. And that's one of the reasons why I always encourage farmers to sign up at the Farm to Consumer Legal Defense Fund, because there's an entire team of attorneys from all that represent the laws and understand the laws and regulations in all 50 states. So if you're a farmer or a rancher listening to today's podcast, you can go to farmtoconsumer .org. So that's farmtoconsumer .org.
Speaker: You can sign up for just $125 a year and get access to attorneys that will provide you with guidance on these matters for a flat fee of $125 a year, in which case, like Alexia, even though she and I may not know the specific rules and regulations for the state of Oregon, neither Russia license there.
Speaker: There's an attorney there at the farm to consider legal defense organization that will actually know the laws in Oregon. And the same for each of the states who can assist you with these nuances because it is very complex and it takes good legal advice and counsel to make sure you're in compliance.
Speaker: Let's shift gears a little bit, Lexia. Let's talk about a couple of maybe bigger policy types of things, which I know that your organization's involved with too, right? The processing industry is obviously a major bottleneck, right? In the US food system. Lots of ranchers who would love to increase their production. Candley, I'm just constrained by the access to an appropriate processor. Are there any changes in the form of infrastructure for the industry or changes to current laws around processing that you believe in your mind could help solve this issue?
Speaker: Yeah, there's a number of things that have been discussed for a while. I don't know that any of them really have much traction. At the federal level, there has been something introduced called the PRIME Act. And what it would provide is that contrary to what I've been saying in today's podcast, that if meat is processed at a custom facility, that you could in fact sell that meat.
Speaker: within the state. So it would be more like a state inspection facility in terms of where you could sell those cuts of meat. And that would certainly be really helpful, I think, to our small independent farms trying to find more facilities to bring. There has been, in addition at the federal level, there's the ramp up act that was providing some grant funding to states and to individuals who perhaps wanted to open slaughtering
Speaker: facilities, it's obviously a really big investment. And so just saying, hey, we need to open more facilities is a lot easier said than done. And so there has been some grants available at the state level, I think, primarily to open new facilities. Is there been some opposition to this? I mean, I imagine the small farmers are all in on this, like, hey, give us more access to more facilities. We can produce more. We could feed more. But I imagine some of the big players, the Tysons that produce, et cetera, and the big processors,
Speaker: probably aren't the friendliest lobbyists on this topic, right? Is there a lot of challenges? There's definitely a lot of challenge. And these are options that have been discussed for a while, but have not been passed. And I think largely because of the lobby of the larger players, right? There are four big meat processors in the country. They probably take up the vast majority of appointments and time at our processing facilities and opening it up for competition is not something I think that they're really interested in. And I think.
Speaker: Everyone sees that folks are much more interested in their local production pipeline these days. And so that can have some impact as well. Yeah. 94 % of Americans want to buy local, right? There's no reason that we need to be shipping product all across this data, across the world for that matter. When plenty, 90 % of the food we consume could be produced locally. That's just, it's surprising to see the constraints. But like you said, there's a lot of money behind this.
Speaker: and competition would drive prices down. So with that, we're also seeing a lot of demands. There's some real creative ideas on how to perhaps increase processing capacity. In fact, there's a company here in Washington. I recently did a webinar with an organization called Freesla, which makes an onsite modular processing unit and is quote unquote USDA compliant in terms of its requirements.
Speaker: So I'm just kind of curious. They're trying to make processing available to larger farms or co -ops and those types of people, those types of organizations who might be interested in trying to process 20 to 40 head a month. Do you work with any farms? You're looking to take processing to their own hands and
Speaker: If they do, I mean, like, what are the things, if someone's going to make an investment in one of these modular processing units, what are the things they need to think about? Because I imagine there's got to be both zoning issues. Perhaps there's got to be some compliance issues. And what about those inspectors you mentioned? The answer to the first question
Speaker: is yes, we have many members who have started researching taking matters into their home hands, which means trying to open a USDA state or even custom slaughter facility. And you can operate a slaughter and processing facility right on your farm. There may be zoning issues, but you can do that.
Speaker: There's been several hang ups to that. And in some states have allowed for custom slaughter facilities to be in mobile units, which has been a nice creative way of going. But those are very difficult to keep up, I think, economically. So there's a real challenge just in the practicality of it as well, that you need to be able to have a certain volume to perhaps make some of these things work.
Speaker: And the wastewater, I know is a big issue too, especially if you're mobile, you move from place to place, trying to figure out the wastewater every single time can be pretty difficult. Yeah. There'll certainly be water requirements that may be more difficult to meet in the mobile situation. I think it can be done. Like when we were in COVID and plants shut down and we're saying this has caused a real problem, right, for people that can't get into these facilities.
Speaker: What I really like about the modular concept that you've shared with me is that it could be done quickly because the sort of more traditional creation of a USDA inspection facility or a state inspection facility, that's great that there's some of these funds out there for that, but they take a long time to build. They're complicated. They have to meet a lot of regulatory requirements. And for small independent farmers that are producing today,
Speaker: that doesn't really help right to say oh here we can open a new facility. By the time that facility gets opened they've had you know the only six cows that they have not been able to be processed. So what I'm really attracted to in terms of what you've described to me in this modular facility is that it could be done quicker. The one thing that I think is again more of a practicality than it is necessarily a legality that I've seen people come into problems with is
Speaker: If you're going to have a state inspected facility or USDA inspected facility, you have to have that inspector on site every time there's a slaughter and processing of an animal. And I think that I don't think that the funding has necessarily been there, nor have I seen it introduced to say vastly increase the number of USDA inspectors that are available for inspection.
Speaker: And as a result, if you build one facility that can handle say 10 cattle, I don't know, a week, you're not going to get the USDA to send an inspector there and you're probably not going to get an inspector to agree to go there. So I'm not really well versed in all the intricacies of how their job assignments are framed, but I do know that's been a real challenge with some of these mobile slaughter facilities as well. If you're only going to have a couple of animals, you can bring the mobile facility to your farm.
Speaker: We can do just four animals. That's fantastic. But you can't get an inspector to go out there. And then so that whole theory really falls apart.
Speaker: So essentially, if you have a modular type of processor that could literally be put on a tractor trailer and shipped anywhere in the country, a few things to think about what I heard from you. Number one, zoning, gotta make sure that you actually are zoned where you could actually have that onsite. Number two, there's some hookup issues and wastewater issues to make sure that the water's processed could be some odor constraints or rules around those things as well. But then the third thing, even if you pass all those things and it's a USDA compliant
Speaker: processing container, right? And it meets all those requirements. You still have to have the USDA inspector show up on all your kill dates. And if I'm six hours from the closest, you know, metropolitan area in the middle of rural Wyoming or Montana or Texas and some like just far away place, you know, what's the likelihood that an inspector is going to drive hours out of his or her way to come to my facility, even if harvesting a 20 head every month.
Speaker: Yeah, it's a practical matter that's very difficult, I think you had mentioned in the description, a few moments ago you talked about cooperatives right if you are in an area with a number of these smaller producers a number of small farms, having this kind of a facility built or maybe invest in it together something along those lines, so that there's enough.
Speaker: volume being processed, slaughtered and processed, then it would probably be easier to get an inspector out there. And then you could maybe control, right, getting those dates and working together in terms of rotational use of the facility or charges to use the facility or what have you. So yeah, it's, you know, getting that inspector to show up in some of these rural areas is really a challenge.
Speaker: So working as a collective and a cooperative model, perhaps might be able to raise awareness, maybe give you a bit more political clout, perhaps even reaching out to your state department of agriculture to try and get their involvement or support or your state ag schools, those types of things. Cause I know a lot of people, particularly the state level are also keenly interested in removing this bottleneck, right? Cause they also want to see the economic growth of their own state producers and want to see that their own states can feed their own citizens irrespective of what may be happening nationwide.
Speaker: Really hot topic for today and certainly one I hope we can see some resolution on our server improvement as we move ahead. So where can farmers learn more about topics like this as well as get more information on the farm to consume really good offense fun. Yeah, so anyone can visit our public facing website farm to consumer.
Speaker: We also have, if you go there, there's also a resources tab that we'll share with you a couple of different maps. One of them is the red meat map. There are some state requirements that differ from state to state about what a farm producer can do and say, slaughtering an animal and then bringing it to a custom slaughter facility just for processing and that kind of thing. So some of those details will be found on that map, but farm to consumer .org.
Speaker: Well, Alexia, I want to extend my thanks to you and to everyone at the Farm to Consumer Legal Defense Fund for supporting and serving farmers all across the country. I know many of the farms and ranchers we work with at Barnador sing your praises, and so I just really appreciate the great work that you guys are doing to help them.
Speaker: Tune in next time to hear from Alexei as we continue to dive into the nuances, laws, and costs associated with being a farmer and how to sell direct -to -market. For more information on the Farm to Consumer Legal Defense Fund, visit farmtoconsumer .org. That's farmtoconsumer .org. To learn more about Barnadore, including access to numerous free resources and best practices for your farm, go to barnadore .com backslash resources. Thank you for tuning into the Direct Farm podcast today, and we look forward to seeing you next time. Take care. Bye -bye.
Speaker: Thanks for tuning in. For more free farm resources, tips, and tactics that are most successful farms use to grow and manage their business, visit barnadore .com slash resources. Also don't forget to subscribe to the Direct Farm podcast to automatically download our weekly episodes. Thanks for listening and we'll see you next week.
