Business booming at small meat plants, but some producers are in trouble

EUGENE, Ore. — At Mohawk Valley Meats, a small USDA slaughterhouse here, workers in  blood-splattered white smocks raced to package meats on a recent Friday.

Business is booming for small meat processors across the U.S. because of soaring demand for locally raised and processed meat and a glut of slaughter-ready livestock created when big slaughterhouses became hotspots for coronavirus outbreaks and had to shut down.

“I’ve never seen anything like this. In two days, we booked all of 2020. We have kill dates for September of 2021 for pigs that haven’t even been conceived yet,” said Denise Pohrman, the plant manager.

Many small processors say they are “thriving.” But some plant managers, including Pohrman of the Mohawk plant, say despite their gratefulness for increased business, they are concerned that their smaller-scale, already-existing customers have been swept aside by larger producers.

With some bigger slaughterhouses closed or slowing their production because of COVID-19 problems, many ranchers have turned to smaller processors. Rebecca Thistlethwaite, director of the Niche Meat Processor Assistance Network, said even ranchers from the Midwest have sent truckloads of hogs to Oregon slaughterhouses.

Faced with new customers, processors say they have had to make tough decisions.

Some processors have dropped small-scale producers and accepted new, larger-scale customers — to make extra income, prevent wasteful livestock deaths and satisfy the nation’s demand for meat.

Other processors have remained loyal to their small producers, hoping to maintain long-term customers and keep them afloat.

“I don’t know who is right and who is wrong, but we have created victims in the aftermath,” said Pohrman of Mohawk Valley Meats.

Pohrman said she packed her calendar with new customers when calls flooded in and now regrets it because 20 to 40 regular customers call daily begging her to harvest their livestock. She said she will no longer accept new customers.

Many small-scale producers, she said, have already paid for slots at farmers markets for the year but will run out of meat before their next butcher dates.

Deck Family Farm in Junction City, Ore., which produces pasture-raised pork, lamb, beef and chicken, has worked with Mohawk Valley Meats 15 years but had its slaughter schedule “totally disrupted,” according to the farm’s poultry manager.

“I lay awake at night and don’t sleep,” said Pohrman. “I’ve apologized more than 10 times this week for allowing myself to become overbooked.”

Pohrman said her new customers, who are reacting to the crisis, are likely just temporary, while her existing customers will likely be with her long-term.

Bill Hoyt, a cattle rancher near Cottage Grove, Ore., and board member of the Oregon Beef Council, said he sympathizes with Pohrman’s dilemma but wonders if she’s making a mistake by turning away other producers.

“Denise (Pohrman) wants to help everyone and can’t say no to the little guy,” he said. “She’s got a heart as big as the plant. But the world has bigger needs right now.”

Thistlethwaite, of the Niche Meat Processor Assistance Network, said if small producers didn’t have slaughter dates lined up months in advance, that’s their problem.

“If you haven’t figured out by now when your animals are ready for harvest, then you have no business trying to be a midscale producer until you professionalize your relationships,” she said.

One Oregon meat plant owner who chose to remain anonymous agreed, saying many small growers call a week ahead expecting to get a slaughter spot.

Thistlethwaite said many small producers don’t know they have other options.

She encourages small producers to consider custom-exempt slaughter, enabling them to sell animal portions directly to consumers.

The USDA labels many small processors as “custom exempt,” meaning they are exempt from continuous federal inspections. Producers can sell portions of an animal — usually quarter, half or whole to customers. This is called selling live animals “on the hoof” as “locker meat.”

The other option, said Thistlethwaite, is “retail-exempt processing.” Retail establishments, such as grocery stores, may process and sell meat at the store. Limited meat can also be sold wholesale to hotels, restaurants or institutions. The animals must be slaughtered under USDA inspection but can be processed under Oregon Department of Agriculture inspection.

The catch is the producer must have a relationship with a butcher or know how to butcher. For that reason, said Thistlethwaite, this may not be an immediate solution.

Pohrman of the Mohawk plant said these exemptions fail to help producers selling to farmers markets, which require meat be both harvested and processed under USDA inspection.

In the past week, Pohrman has sent letters to the ODA, Gov. Kate Brown and others requesting an emergency exemption to help these producers.

Thistlethwaite said although big plant closures have caused disruptions, that’s not the driving force behind small processors’ sudden popularity. The bigger driver, she said, is demand. Consumers are eager for local food during the pandemic.

This craving comes after a long period of decline. Big meatpacking facilities have made meat relatively cheap in the U.S. and pushed smaller slaughterhouses out of business.

From 1990 to 2016, the U.S. meatpacking industry lost more than 1,800 slaughterhouses. The “Big Four” companies — Tyson, Cargill, JBS and National Beef — came to dominate 85% of the industry.

Hoyt of the Oregon Beef Council said the nation’s meat infrastructure resembles an hourglass: on one end, producers and feedlots, on the other, consumers, with processors in the slender neck. Now, the neck is jammed.

“I think there’s a real need for more small processors,” he said.

But creating a local meat system isn’t simple. Industry experts say building and running a meat plant is expensive, regulations are complex and competition is tough.

Even so, Thistlethwaite said she hopes the pandemic will result in more consumers supporting local producers and processors.

“I suspect after this initial hoarding phase, the demand is going to slack off considerably, especially since we’re about to enter a massive recession,” she said. “But if people want local meat to last, I hope nobody expects any quick fixes. Consumer interest can’t just be a blip on the screen. That’s not the kind of long-term commitment farmers need.”