Small-Scale Livestock Farming

by Carol Ekarius

  Feel free to mark up. We priced our meat, which we sold to a strictly rural clientele, just slightly above the top end of grocery store prices. The “good” Polish sausage at Fred’s Hometown Grocery sold for $2.39 per pound, ours sold for $2.50. If we had lived near an urban center, our markup would have been even greater.

  Sell higher than the top end of the butcher market. For animals we sold on the hoof (see chapter 10), our pricing was slightly higher than the top end of the butcher market, and the customer paid for the butchering. Butcher hogs, during a high market, sell for 65 cents per pound ($1.43 per kg) live weight. We sold half or whole hogs at 70 cents per pound ($1.54 per kg), and we delivered it to the butcher. This was our price, both when the market was high and when it was low (and butcher hogs were selling for 35 cents per pound [$0.77 per kg]).

  Prices must exceed cost of production. Ideally, cost of production includes not only fixed costs (loan and mortgage payments, taxes, insurance, and so on) and variable costs (wages for paid employees, feed, fuel and maintenance for machinery and buildings, et cetera), but also an allowance for family salaries. Chapter 13 will go into these calculations.

  Price consistently. Changes, when they are necessary, must be made slowly and in small increments.

  Run a sale. Don’t be afraid to put an item on sale. Sales can be especially useful if you have too much of one item taking up freezer space.

  CHAPTER 10

  Legalities

  We the People of these United States, in order to form a more perfect Union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution of the United States.

  — Preamble to the Constitution of the United States

  ONCE YOU DECIDE to move beyond conventional marketing, you enter a maze of laws and regulations. You’ll have to interact with bureaucrats. And you’ll court new levels of liability.

  Our phone rang early one morning a few years back; the woman on the other end introduced herself as a pig farmer who lived in the next county. She explained that she had called the state Department of Agriculture and asked what she had to do in order to direct-market meat from her farm. The answer from the employee she spoke to was, “You can’t!” Shortly after, while surfing the Internet, she came across the home page of the Minnesota Institute for Sustainable Agriculture (MISA). On a whim, she decided to give her quest one last try; she called the institute. A staff member, Debra Elias, said, “I know you can do it, but I’m not sure what you need to do. I know some farmers in your area who have done it, though, and they might just be able to help.” Debra gave her our number.

  For most farmers, including our neighboring-county pig farmer, working their way through red tape and bureaucracies is, at the very least, intimidating and frustrating; at the worst, it’s a true nightmare. But don’t give up; it can be done, and the payoff is worth the trouble.

  Legal Process

  Civics — ah yes, that class we are all compelled to take in high school, which we then quickly forget. Sure, we remember that the federal government is a three-pronged affair: executive, legislative, and judicial; we know that presidents are elected every 4 years; we know taxes are inevitable; and, we’re pretty cynical about the integrity of our elected officials and bureaucrats. Beyond that, government is kind of a blur. But the best way to accomplish your goals and negotiate this legal maze is to have a good basic understanding of the processes that go on at federal, state, and local government levels. In other words, another civics class.

  Before I go on, I want to make some completely personal observations about bureaucrats (before any of them who might be reading this say, “Hey, wait a minute, we’re not all bad”). Although a few of them are complete jerks on a power trip, most are good folks who are just trying to do their jobs. And for the most part, they’re trying to do it right. They usually believe that what they are telling you is correct, and in the best interests of everyone, but sometimes even the good ones are wrong. Don’t be afraid to stand up for your rights: Be polite, businesslike, and firm when you have to.

  Now back to the civics lesson. No matter what level of government entity you’re dealing with, from a local town council up to the federal government, there are certain similarities in the way all of them operate. Each level operates under documents that spell out its rules for operation. In the case of towns and counties, either state statutes describe their function and authority, or a document called the Articles of Incorporation elaborates on their function. The states, like the federal government, follow a document called a Constitution. The Constitution is the highest law in the land, and although it can be amended, the process isn’t easy. It tells the government, and the people, exactly how things will work.

  Each entity has some type of executive branch: mayors, governors, and the president all represent the executive officer. The executives may recommend laws to the legislative branches; they may have veto power over laws enacted by the legislative bodies; they may be granted a vote to break a tie of the legislative body; but they don’t actually create the laws. Their job is to see that the laws, once enacted by the legislative body, are implemented and enforced. Executives, with the approval of the legislative branch, hire top-level employees, or bureaucrats, to actually run day-to-day affairs.

  The legislative body (the U.S. Senate and House of Representatives, state Senates and Houses of Representatives, boards of county commissioners or town councils) actually holds the power to enact laws. Laws may go by different names — ordinances, statutes, and codes are common examples — but their adoption must follow certain procedures designed to guarantee public input.

  Although the executive branch can’t actually adopt laws, there are procedures that allow its members to adopt regulations. These are designed to guide implementation and enforcement of the laws that the legislative branches adopt.

  The judicial body is the courts. The courts act as arbiters between the executive and legislative branches; they determine if adopted laws are legal under the Constitution; they provide a vehicle for individual members of society to file grievances and collect compensations, both against each other and against government entities; and they provide the system to adjudge guilt or innocence under the criminal codes.

  As citizens, we have rights and responsibilities. Laws and regulations are — in the best of worlds — supposed to specify, clarify, and enlighten us on our rights and our responsibilities.

  Laws and Regulations

  Understanding your rights and responsibilities is crucial to successful alternative marketing (and doesn’t hurt one little bit in other aspects of life, either). The way to do it is to open the books — the law books, that is. (For the remainder of this chapter, the word laws should be taken to mean both laws and regulations.)

  To find out what laws you might collide with, start with a search of the local library. Librarians can point you in the direction of the reference shelves, the place where books of statutes and ordinances are kept, and they’re generally happy to help you figure out how to weed out the information you need if it’s your first time reading these onerous documents. Reference materials either must stay in the library or are subject to a very short checkout time, like two days; bring some change for the copy machine. Also, all federal laws and some state laws are available via the Internet (see appendix E, Resources), though currently few local governments post their laws online. If you don’t have access to the Internet at home, libraries, County Extension Service offices, and schools often offer public access.

  Laws can be nested one within another. This means that local entities may adopt laws of other levels of government, or general codes, by reference in their ordinances; the referenced codes can have additional references within them. The Uniform Building Code, Uniform Fire Code, Uniform Electrical Code, and Uniform Plumbing Code are all typical examples of items that are often adopted by
reference. Adopting by reference is done, in part, to save space: Each one of these codes runs to hundreds of pages (of really small print), and they can be mind boggling in their own right. For example, let’s say you need a fire inspection for the type of operation you plan to run. The fire inspector will most likely judge your property based on the Uniform Fire Code, and the Uniform Fire Code adopts, by citation, the Uniform Electrical Code.

  Right about now you’re probably thinking, “Oh my word, I’m not a lawyer, I’m a farmer; I can’t possibly cope with all these laws.” Don’t. It’s not as bad as it sounds. And you don’t have to be a lawyer to make sense of this stuff. Let’s look at a couple of scenarios to give you an idea how laws work in practice.

  Scenario 1: Starting an On-Farm Bed-and-Breakfast. You want to start an on-farm bed-and-breakfast. In this case, there are probably no federal laws to worry about. You aren’t carrying on interstate commerce — since your product can’t possibly cross state lines — so federal business laws don’t apply. And you probably aren’t engaging in any practices that could trip other federal laws; for example, you aren’t processing foods or drugs, and you aren’t spewing out air pollutants or water pollutants.

  So in this scenario, the only laws you need to worry about are those adopted by local governments or your state. How do you find out about them? Start with the local municipal code for your town or county. Look in the table of contents or the index for headings such as BUSINESS, LICENSING, LODGING, GUEST HOUSES, and so on. Go to each reference you find, and read it carefully. If it sounds as though it may even remotely apply to your proposed operation, take notes or make a copy of it. If there are no local laws that apply to what you want to do, then check the state statutes.

  It is common for this type of business to need some kind of license from the local government. To obtain the license, you’ll need to file an application (along with a fee) with the clerk of the entity. The application form may require a sign-off from certain officials, such as those employed by the local fire department or the local health department; make sure you check on what’s required by all local government entities that have any jurisdiction over your site, including fire districts, water and sewer districts, and town or county governments. Your property tax statement should indicate who out there in government land has some say over what goes on, on your piece of land.

  An alternative to doing your preliminary research at the library is to call each government entity, and ask the staff what you have to do to start your bedand-breakfast. But as they tell you what hoops you have to jump through, nicely ask them to show you in writing the law they are basing the requirement on, and ask for copies of the pertinent parts.

  Scenario 2: Direct-Marketing Beef. You want to direct-market beef (or lamb, pork, or goat). Once you begin direct-marketing, you fall under the United States Code (a compendium of all federal laws). The part of the U.S. Code that deals with meat is Title 21, Food and Drugs. Chapter 12 of Title 21, “Meat Inspection,” requires all carcasses intended for use as meat, or meat products, to be examined by a federal inspector. The examination is intended to “prevent the use in commerce of meat and meat food products which are unwholesome, adulterated, mislabeled. . . .” Interestingly, bison, deer, or elk don’t fall under this law, by virtue of the fact that they weren’t mentioned when the law was written; however, other federal laws apply to keeping these animals.

  Beef can be sold for meat in one of two ways: on the hoof or packaged. Selling meat on the hoof involves less red tape than selling packaged meat, because there is a specific exemption (Title 21, U.S. Code, Section 623) that allows the owner of an animal to have it butchered for personal use without having it inspected. This means that you can have the animal butchered at a “custom slaughter plant,” as opposed to a federally inspected plant.

  Custom plants must occasionally be checked for cleanliness, by either a federal or a state inspector, but unlike federally inspected plants there are no inspectors checking the carcasses of each animal that is being butchered. Generally, many smaller packing plants located in rural communities fall into the custom category; with their small scale, they can’t afford to pay for a regular federal inspector to be on site.

  Selling on the hoof means you are selling the live animal to the customer, and he or she is responsible for having it butchered to his or her specifications. You may split an on-the-hoof animal between multiple customers — for example, two families could each be buying one-half of a hog from you — but you must charge them based on the live weight of the animal. And they must pick the meat up from the butcher themselves. When you meet these criteria (sold based on live weight, butchering per customer specifications, and picked up by the customer), the exemption from carcass inspection kicks in.

  If you decide to sell packaged meat (cut and frozen, or processed into meat products such as jerky or sausage), each animal must be slaughtered at a plant that has a federal inspector available to view the carcass. Packages must be labeled. Labels have to say what the product is and who it is distributed by; the USDA logo must also be on the label — or the little circle shown in Figure 10.1.

  If the package contains a product that has any added ingredients (even just a pinch of salt), the label must show all the ingredients, and it must be approved in a USDA office in Washington, D.C. To receive approval, a copy of the recipe must be sent in, along with a copy of the proposed label; ingredients must be listed in order based on the quantity used in the recipe — largest-quantity ingredient listed first, and smallest quantity ingredient listed last.

  Labels may not include any misleading words, and all claims must be supported. Our Little Wing Farm labels said, “Raised and distributed by Little Wing Farm, Verndale, MN.” We were notified that we could not use the words “Raised by” on the label until we filed a notarized affidavit stating that all meat used in our products would come from animals that were raised on our farm! The fellow who owned the packing plant we worked with told us about another farmer who used the words “Texas Red Hot” on a jerky label; the USDA disapproved it because it would be misleading on the product of a Minnesota farmer. So he resubmitted the label with the words changed to “Texas Style — Red Hot,” and it was approved. When shopping around for a federally inspected packer, look for one who’s willing to help you with label design and approval.

  Federal law also requires that meat packages be given a safe food-handling label (Figure 10.2). This label, through words and pictures, tells the less-than-bright consumer that he or she should cook meat thoroughly, wash hands and utensils before handling, and keep the meat refrigerated. Personally, this is one regulation that I find ridiculous and insulting, but it is a requirement.

  After the meat has been cut, processed, frozen, and labeled, there are laws that dictate how it must be stored and transported. Although a federal storage and transport law exists, the USDA has delegated the authority to implement and enforce this to most of the states, so you need to check what is required by your state’s Department of Agriculture. Check the index of your state’s statutes for such key words as MEAT, FOOD STORAGE, FOOD OR GROCERY, or call your state’s Department of Agriculture. You may have to apply for a “Retail Food Handler’s License” or the like.

  Figure 10.1. A USDA-approved meat label must include the distributor’s business name and address, the contents of the package (including any ingredients used in preparing the contents), and the USDA logo with the number of the plant where the meat was inspected. If the contents are a prepared product with ingredients, the label must be approved in Washington, D.C.; if it is strictly a raw-meat product, say sirloin steaks, the label can be approved by the on-site inspector at the packing plant where the carcass is inspected.

  Figure 10.2. Safe food-handling labels are required on all meat packages.

  I’d done my research on the laws in Minnesota before I called the state to inquire about licensing, and it yielded an interesting little nugget: The state’s Constitution (Article 13, Sectio
n 7) clearly states that a farmer does not need a license to sell “the products” of his or her “occupied” farm. But the employee I spoke with said I needed a Retail Food Handler’s License. I then asked, “What about the Constitutional proviso that clearly states I don’t need a license?” and read him Article 13, Section 7. There was dead silence on the other end until, after a few minutes, he said, “I’ll call you back.” The employee did call back a little while later; he hemmed and hawed and said, “Well, um, we think you need a license.” I said thanks, hung up, and never got a license. During the ensuing years, anytime state employees said, “You need to get a license,” we recited the Constitution to them and told them the state Department of Agriculture would have to take us to court if they wanted us to get a license. The subject was always dropped like a hot potato.

  Now, even though we contended we didn’t need a license, it didn’t mean we were exempted from the rest of the regulations. The state still had the right to inspect our freezers to see that we were storing meat correctly — they just couldn’t require us to obtain a license. Again, do your own homework, and when an employee tells you what you need to do, ask to see the laws in writing.

  Finally, check to see if any local laws apply to what you’re trying to do. If you want to open a retail meat store on your farm, you may have to go through the planning, zoning, or building department for approval.