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Expert advice on your livestock marketing and processing options | The Spokesman Speaks Podcast, Episode 43

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Welcome to Episode 43 of The Spokesman Speaks podcast. In this episode, Dr. Kathryn Polking (Bureau Chief for Iowa Department of Agriculture and Land Stewardship's Meat and Poultry Inspection Bureau) and Terry Kerns (co-owner of eastern Iowa's popular Edgewood Locker) help farmers navigate their best options for marketing and processing livestock during the COVID-19 pandemic.

Below are some of the resources referred to in this episode:

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Narrator: Since 1934 Iowa's farmers have turned to the Iowa Farm Bureau Spokesman as their trusted news source. Now the Spokesman Speaks. Listen in and hear from leading experts on topics important to farmers and agriculture. Now here's your host.

Delaney Howell: Welcome to the June 1st edition of the Spokesman Speaks podcast. I'm Delaney Howell in today's episode concerns the question that is absolutely top of mind for livestock farmers right now. As meat processing plants struggle to keep up with farmer demand. Where can farmers turn to market their livestock? For insights into that difficult question, we turned to Terry Kerns, who's the co-owner of Eastern Iowa, was popular Edgewood Locker and Dr. Kathryn Polking, who is the Bureau Chief for the Iowa Department of Agriculture's Meat and Poultry Inspection. Let's start off here first with Terry Kerns, who was in the midst of running his family's successful locker in Edgewood when COVID-19 showed up in Iowa and turned things upside down. Spokesman, writer Corey Munson has the story. Take it away, Corey.

Corey Munson: How has the COVID-19 situation impacted your business?

Terry Kerns: From the custom aspect of the business, immediately the farmers needed a place to go for their animals because the markets weren't there. So, anyway, the phone started ringing off the wall on needing, wanting to slaughter more hogs and beef. Typically this time of year, is our slowest time of the year. Usually they could call up and get one right in within a few days we are booked out months and right now we're actually booking beef for April and hogs into March.

Corey Munson: Tell me a little bit about your relationship with your farmer customers. So, you have guys that you work with normally and some of these guys have unfortunately, not been able to get their animals in here to you.

Terry Kerns: Yeah, that's been really hard because we do have a lot of great loyal customers and we obviously are doing our best to get them all in. We're certainly not getting them in as quickly as we'd like. We are developing a waiting list in case of cancellations, in case of us being able to ramp up our production a little bit better, that we're still hopeful that we can help most of these people out. And right now we're just really unsure exactly how many of them were going to be able to get snuck in. There's just that much gray area out there. I do think that some of this panic booking of down the road months and months, I think that there are some of those that are booked in there that probably were booked in the heat of the moment and maybe they'll end up selling that animal or maybe the person that now these market's coming back a little bit and that there'll be for gaining value again. Maybe they won't want as many. But I'm hopeful that it'll out here to some point. But I do think that we are going to be in a trend with less and less lockers and custom processing available. I do see this extended booking way ahead. Probably the new norm.

Corey Munson: So, have you gotten any calls from guys curious about slaughtering at their farms? , what they can do?

Terry Kerns: Sure. We've seen quite a bit of that and understandably so. I mean they had no choice if they wanted an animal butchered. That was about the only choice they had because obviously we're not the only locker in this situation. I think everybody's pretty similarly booked out. So, we have seen a lot of that and the main thing is food safety as we tell them we can only do, obviously we're just talking to them. We were not a part of it and I think it was a little bit easier the past few weeks and when it was colder. I'm hopeful that anybody that's doing that now has refrigeration available because we're certainly getting to a point where you got to watch that temperature. I mean it's pretty easy to do when it's cold out, but when the temperatures aren't getting very cold at night you want to be very careful doing that.

Corey Munson: Have you heard any talk around the state of reinforcing the locker system folks may be wanting to get into the business because of this situation?

Terry Kerns: Not specifically because of the situation. I think it is brought to highlight that there is probably a shortage of lockers, but it's kind of a business cycle. I mean, I think there is somewhat a shortage because it's not easy. , we've been fortunate, we're busy. We've got an amazing staff and we're lucky things are going well, but it's not a simple business to get into. , most of the lockers right now that I'm familiar with are family businesses. Kind of like a lot of the farming if you grew up in it, so you understand it and you just continued on. It's kind of a rare occasion to have somebody out of the blue go off and build a new locker. Kind of like the farming situation. Whereas , there used to be a lot of farms that milked 20 cows had a farrowing house with maybe 30 sows in it. what a lot of these smaller lockers did minimal amounts to. It's just in today's world, you got to have volume to be able to make it. So, to start up a small locker that could be somewhat manageable financially, is really hard to even be able to crunch the numbers, ? So, it'll be interesting. I know there's a, there's just a shortage out there. And I know one, one real shortage out there is in the private label business where a lot of these farmers wanted to market their own Wagyu beef or Berkshire hog. And we used to do some of that. We just got to the point where we didn't have any more time in super shortage in processing like that. So, there's definitely a shortage out there. , I guess I don't want to necessarily entice too many people to go into competition with me, but I think there is a need out there for more processing facilities.

Corey Munson: I think this one thing the virus has taught us that being local and being part of your community is one of the safer ways to go about this maybe than consolidating everything into a couple spots that could, something could go wrong.

Terry Kerns: Definitely and actually in our industry, the locker business over the years it's, there's been a lot of years it was down there was, it was you go to conventions and it was doom and gloom and over the past few years now, even before the COVID the whole local meat, local processing, that whole movement has been, has been moving, rolling along pretty strong. So, now at this COVID-19 thing has pounced upon it too. I mean, it's really brought a highlight to it. We've been talking about an addition for the last three or four years even. We finally got our land bought this last fall and we're actually moving dirt in and right now. So, we're planning in addition it's just right now as it figuring out exactly what direction that addition is going to go and what our exact plan will be in the future.

Corey Munson: So, for farmers who are struggling and calling around, do you have any advice for them? What they should do?

Terry Kerns: Probably my best advice would be as your local butcher is your best option in my opinion. Again, because that's a bad situation because everybody can only do so much but there's just not many options out there unless dusting off the knives and that's not easy either.

Delaney Howell: Well, I think I can speak for all of us when I say thank you to Terry and all of the other folks who are running small family owned lockers around the state, we certainly know that the demand is there. We appreciate everything you're doing to help farm families find processing options during this difficult time. Not surprisingly, as you heard Terry mention there, running a locker is not an easy task and there are definitely important food safety rules and considerations to keep in mind if you're looking into that direct marketing path. For those specific questions we bring in Dr. Kathryn Polking who is the Bureau Chief for the Iowa Department of Agriculture's Meat and Poultry Inspection Bureau. Her bureau oversees the inspection of small processing operations that sell meat here in Iowa. Farm Bureau's Caitlyn Lamm had a chance to visit with Dr. Polking last week and as you would expect, Dr. Polking's time is in high demand. So, Caitlyn got right down to business with some of the most important questions livestock farmers are asking right now.

Caitlyn Lamm: Dr. Polking, thank you so much for joining us today. First, could you tell us more about the Iowa Department of Agriculture and Land Stewardship's Meat and Poultry Inspection Bureau. And what is your role within the Bureau?

Dr. Kathryn Polking: Iowa Meat and Poultry Inspection Bureau. We provide inspection services to the small and very small plants around the state. So, me of those are custom exempt establishments that perform processing services for the owners of those animals and return products to them. So, me are what we call official or state inspected establishments that can produce products with the Iowa Mark of Inspection for sale. My role in the Bureau, I am the Bureau Chief, so I have the honor of heading up that program and overseeing our staff.

Caitlyn Lamm: And I know that you also recently worked with our Iowa Farm Bureau Farm Business Manager, Amanda, to come up with an easy to read graphic to give farmers a top level idea of what types of regulations are in place when selling direct to consumers because of the pandemic creating bottlenecks in our food supply chain. A lot of customers have been seeking out that more direct route, which means there could be a lot of first times not just for consumers buying whole hogs or whatnot, but for farmers selling that animal. So could you break down for us what the regulations are for farmers selling direct to consumers and maybe some of those like common misperceptions you have been seeing out there on direct marketing

Dr. Kathryn Polking: For farmers who are looking to market directly to consumers, there's really two major options. You can sell live animals or assure in a live animal such as a half or quarter to one or more wires that is then processed through the custom exemption and those products are then returned to those buyers, those new owners. The other route is to have animals processed under inspection at one of our official lockers and this would allow you to sell individual cuts or to sell meat products after the fact. There's kind of a couple of key points that that play into this, and maybe this speaks to your misperceptions. With that custom processing route, it is extremely important that those buyers be identified prior to the slaughter date to do otherwise, to try to sell that product after the fact that his sale of uninspected meat and that actually is a crime, so that's not a route that you want to go down. It's, very important with custom that it be a live animal. Beyond that, if you are going through the sale of inspected cuts and you'd like to get into the retail business, it's also important to discuss retail licensing with our counterparts over in Department of Inspections and Appeals, Food and Consumer Safety Bureau. They handle licensing of retailers, restaurants, farmer's market stands, et cetera. So, they would be the licensed issuing authority for someone looking to do those direct sales.

Caitlyn Lamm: So, then you have an option, you can sell a live animal and then it's that buyer's responsibility to get it processed.

Dr. Kathryn Polking: That's correct. The producer can make arrangements for processing, but they do need to provide the names of those buyers when the animal is dropped off.

Caitlyn Lamm: And then for selling individual cuts, there's going to be a couple of different things that have to happen. So, that animal has to be processed under a locker that has state inspection?

Dr. Kathryn Polking: Correct, or federal inspection.

Caitlyn Lamm: Okay. And that farmer has to have a retail licensing?

Dr. Kathryn Polking: That would be correct, yes.

Caitlyn Lamm: Okay, good. I just want to make sure that I understand because I've seen a lot of different things out there and that graphic that we talked about really helped to break it down. But it does seem like there's some like subtle nuances sometimes to what's possible. And like you said, what's legal, which is important to know. This is new for a lot of people. Right? And I've read online or even heard like anecdotally about people who are buying or splitting a whole animal with friends or family for the first time. So, on that consumer end, they're trying to navigate what's possible and they're asking those questions of farmers who may be getting these types of questions for the first time. So, if a farmer is unsure or has additional questions while navigating these opportunities, what is a reliable place they can turn to with those questions on selling livestock outside of their normal marketing chains?

Dr. Kathryn Polking: Obviously we would be a good option on that and we're happy to answer those questions, especially if you've read that preliminary guidance or flow charts and what you'd like to do doesn't quite fit neatly into one of those scenarios. There are also resources through ISU Extension, other university extensions, through trade groups such as American Association of Meat Processors or the Niche Meat Processors Assistance Network or Iowa Meat Processors Association here in Iowa.

Caitlyn Lamm: Yeah, and also because of the influx of questions livestock farmers have been facing with the many challenges during the COVID-19 pandemic, some farmers have also been reaching out to the Iowa Resource Coordination Center. Can you tell us more about that new support center?

Dr. Kathryn Polking: Sure. Resource Coordination Center has been answering questions from anything from mental health support to euthanasia questions to alternative marketing and other options. So, they're providing this broad spectrum of services and resources for livestock producers throughout this crisis. For us specifically, we are fielding those questions that pertain to direct sales of meat products or to starting a meat processing business

Caitlyn Lamm: On Facebook. I've seen posts from local farmers who have found success in saying "Hey, on this day I'm selling hogs for this amount. Here's what our care program has been and, bring your own clean trailer for hauling." So, some have been able to sell off some of their animals that way. And I was also invited to a Facebook group that helps match farmers with consumers looking for a half hog or quarter beef in Iowa. So, we know farmers are out there and they're doing their absolute best to make this all work. And I wondered if you had heard of any creative but legal success stories of farmers marketing their animals in less traditional ways.

Dr. Kathryn Polking: I think we've certainly seen more of what you're talking about here as this goes on. And again it is legal for a producer to market a live animal. They cannot provide the surface of slaughter and processing that requires licensing as a custom establishment, but you may sell a live animal and that buyer may then process it for themselves and that is perfectly within the rules. I think we've seen over the years or recent years, especially as any interest in local food grows there's opportunities such as community supported agriculture, co-ops or the like. Finding the distribution network to break into some of those markets is usually one of the challenges with building a direct marketing type business.

Caitlyn Lamm: And I'm glad that you bring up the local foods aspect because that kind of leads me into my next question of switching gears here. So, in the short term, we know that even local meat lockers have also been overwhelmed with orders. And in this podcast episode, my colleague Corey talks with Terry Kerns at Edgewood Locker who says they're running at one hundred percent capacity and they're booked out until next year. On taking orders and we know they're not the only ones. , there's a story on local news too about the Milo Locker who has a retail storefront and they're being sold out of product every day. And I keep seeing stories like that. So, I mean, we don't have a crystal ball to know whether this by local meat trend will continue, but it does seem to have generated interest in opening more lockers in Iowa's rural communities. So, for people listening who fall into that, I'm kind of interested in doing that camp. And where should they look to find out more about what that startup looks like in all the considerations entails?

Dr. Kathryn Polking: For starting a new facility, I would advise everyone to realize that a lot of that is going to be the investment in the facility and equipment itself. Something that can meet the sanitary standards and is also going to work well. As far as resources, there are some wonderful documents and guidebooks through the ISU Extension store, including a guide on designing small red meat plants that we frequently provide to those with questions on that Niche Meat Processors Assistance Network or Nim pan website, nichemeatprocessing.org. They have a number of very good resources for those. Interested in starting up a plant and perusing some of those resources or reading through those to get an idea of what's involved can be a great starting point. Having read some of those, if you are still interested, give us a call. We will walk you through each step of that process from your design construction through to operation. I would also encourage those there before you go to build a facility, look at whether there may be a current or former facility in your area that is for sale or could be renovated to suit.

Caitlyn Lamm: That's a good point because I've also seen a lot of things about when people are talking about opening up lockers like, “Oh well there's this locker that used to be in our community and the building's still there. Can we bring it back up to regulation or code or whatever it may be and get that running." So, I'm sure that would also be not having to start from scratch. Another different type of opportunity to.

Dr. Kathryn Polking: Correct, and there are even locker owners out there who are looking for an interested person to follow them and take over that business.

Caitlyn Lamm: Well, it'll certainly be interesting to see what happens and in the meantime we know when it comes to Iowa meets that Iowa just received a green light to sell state inspected meat and poultry products across state lines. When Iowa Secretary of Agriculture, Mike Naig finalized the Cooperative Interstate Shipment Agreement with USDA Food Safety and Inspection Service. Would you mind elaborating more on what this means and how it may boost the sales and availability of Iowa meat?

Dr. Kathryn Polking: So, we're actually pretty excited about the cooperative interstate shipment. This has been over a year in the making to get this rolling, get the necessary lab equipment and all of the pieces in place. CIS, it will allow selected state inspected establishments to a apply a more federal style marker for inspection and to ship products across state lines. What that also means, is that livestock producers looking to do direct marketing and to ship products out of state, can also have their animals processed through a selected establishment and then we'll be able to take those products across state lines.

Caitlyn Lamm: Well that sounds like a really great opportunity. And Dr. Polking, you've given us some great information here. Is there anything that I haven't asked or any other common questions that you've been getting that you think would be important for our farmers to hear?

Dr. Kathryn Polking: I think your questions have pertained or follow pretty well that some of the questions that we've been getting they've mostly concerned are either direct marketing or how to set up a custom locker type business. I would encourage anyone who is looking at either of these routes to do their research, to develop a business plan. It can be a tough industry to get into, can be rewarding. But good planning will make that process a lot easier. And as always, we're happy to answer questions and to work with anyone that's interested.

Caitlyn Lamm: Great. Thank you. And what's the best way to get in touch with all of you?

Dr. Kathryn Polking: Our contact information, emails, et cetera is up on our website. There's Iowa Meat and Poultry Inspection Bureau under Iowa Department of Agriculture and Land Stewardship. For anyone that's interested, our main phone line into the office is (515) 281-3338.

Delaney Howell: Well again, we certainly appreciate Dr. Polking's time and her thoughts on some not so easy to answer questions. Hopefully we answered some of your questions and maybe even sparked some follow up ones. For those follow up questions, I'd urge you to call on the Iowa Resource Coordination Center, which is the hotline that idols Iowa State Extension and Iowa Pork Producers are encouraging livestock farmers to call if they have any questions about how to deal with supply chain disruptions. Their phone number is (515) 725-1005 again, that number is (515) 725-1005 and their website is iowafarmerhealth.com. If you have any questions that pertain specifically to inspection requirements for direct marketing, you heard Caitlyn and Dr. Polking referred to a flow chart graphic developed by Iowa Farm Bureau that provides some basic answers. That flow chart is linked to the notes for this podcast episode so you can click to view it there. You also just heard Dr. Polking welcome you to contact the Iowa Department of Agriculture's Meat and Poultry Inspection Bureau with questions about the specific requirements for direct marketing or opening a locker, and that number is (515) 281-3338. Okay, we're nearing the end of this episode. I know that was a lot of information to get through, but I want to remind you of a critical relief program that's available to farmers. Right now it's the Coronavirus Food Assistance Program, also known as CFAP. This relief program for farmers is being administered by USDA and is taking applications now. So, for details on how to sign up, go to farmers.gov/cfap or call your county FSA office. Well, that's it for this episode of the Spokesman Speaks. I'm Delaney Howell and if you picked up something useful from this episode, I sure hope you'll subscribe to the podcast and join us for our next regularly scheduled episode on June 15th until next time, I hope you stay safe, protect your loved ones and find new ways of responding to the challenges of feeding our neighbors in Iowa and all around the globe. Thanks for reading the Spokesman and thanks for listening to the Spokesman Speaks.

Narrator: Thank you for listening to the Spokesman Speaks Podcast by Iowa Farm Bureau. Check out more podcasts and articles from the Spokesman at iowafarmbureau.com/spokesman. You can also find and subscribe to the Spokesman Speaks Podcast on Apple Podcasts, Google Play, and other popular podcast apps. We appreciate your ratings and reviews and welcome your feedback at podcast@ifbf.org.

About The Spokesman Speaks Podcast

Since 1934,  The Iowa Farm Bureau Spokesman has been Iowa’s leading agriculture news source, and today it is the largest circulation ag newspaper in Iowa. While the Spokesman newspaper is available exclusively to Iowa Farm Bureau members, The Spokesman Speaks podcast is available publicly, reaching farmers on-the-go with stories that matter to them. You can  find episodes of the podcast here or subscribe and listen in your favorite podcast app, such as Apple Podcasts, Google Play, Spotify, iHeartRadio, Stitcher, TuneInRadio, or Radio.com.

We release new podcast episodes every other Monday. Episode 44 will be released on June 15, 2020.



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