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Southwest Wisconsin farmers organizing poultry processing cooperative

Southwest Wisconsin farmers organizing poultry processing cooperative

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POSTED February 6, 2019 2:06 p.m.

SOUTHWEST WISCONSIN - A team of six core leaders, Gene Schriefer and Barry Hottman of the UW-Extension of Iowa County, and approximately 50 interested producers are working to fill a key processing gap for poultry producers in the Driftless Region.

Molly Placke Silver is a small pastured poultry producer in Green County. She sits on the interim board of the newly formed Driftless Poultry Processing Cooperative (DPPC), and is helping to oversee a feasibility study, and a cooperative development process for the proposed cooperative. Though not part of the original group, Silver joined because she is a small producer that is limited in growing her business because of lack of availability of processing in Southwest Wisconsin.

“We currently raise just a few hundred chickens and turkeys per year, and process and sell them directly from our home,” Silver said. “We choose to home process because getting our birds to a processing facility involves driving long distances, inflexible processing dates, and higher processing costs per bird for smaller batches. Our operation would not be profitable with the current processing options available.”

Silver said that small home producers like her family are limited by the state’s ‘1,000 bird rule’ for exempt home processing. Beyond 1,000 birds, it becomes necessary to have a state or USDA-inspected facility that requires an investment beyond the means of most small producers.

“If we have a facility nearby that is willing to work with smaller producers, we will be able to scale up our business and sell in other markets such as farmers markets, restaurants, and retail grocery stores,” Silver said. “A nearby processing facility will greatly reduce producer costs of transporting birds long distances for processing.”

Silver said that the group’s proposed processing plant will provide USDA inspection as opposed to the current state-level inspection for the facilities in the area. USDA inspection allows poultry products to be sold across state lines, and could open up markets for smaller producers in Chicago and Minneapolis, or by mail order.

“In addition to just basic processing, the cooperative would also like to offer our members other value-added options such as boneless, skinless cuts, sausage and more,” Silver said. “In addition, we plan to offer processing for a greater variety of poultry species, beyond just chickens and turkeys, such as waterfowl, guinea hens, and even rabbits.”

VAPG grant

The producers raised nearly $24,000 from their own support, and in local funds, which served to match the $24,000 VAPG grant they received from USDA to study the feasibility of locating a USDA processing facility in Southwest Wisconsin. In order to accept the grant, a processing cooperative was incorporated in Wisconsin. 

“Concurrently with evaluation of the feasibility of the business, we are also working with the UW Center for Cooperatives on cooperative development,” Silver said. “This includes things like setting up accounting systems and member recruitment. This will position us to accept new members into the cooperative, and to manage our facility once it is up and running.”

Gene Schriefer of UW-Extension in Iowa County has been working with the group since they first came together.

“They’re defining poultry loosely to include chickens, turkeys, waterfowl, guinea hens and rabbits since they would all use similar equipment,” Schriefer said. “The next steps are to develop a survey of current poultry operators and access the level of demand for processing and other services that a facility might be able to offer.”

The feasibility research, including the survey, is designed to estimate how much processing capacity is currently needed? Would there be changes in production if a USDA facility were available? What are average transportation and processing costs? Is there demand for value added processing such as preparing stuff breasts, boneless/skinless cuts or ground product? Do producers need organic processing and would access to a cold storage facility enable them to manage inventory and improve their marketing capacity?

With the information gathered from all aspects of the feasibility research, they will be positioned to go through a business feasibility process and evaluate if the volume and numbers are adequate to support such a facility. 

Some questions in front of the group include: processing is labor intensive. Can a plant pay a living wage for skilled workers? Is the number 100,000 birds/year, 500,000 or over a million? Before any further capital investments are made, this is crucial information to know.

“Fundamentally, the producer needs to produce something someone wants to buy at a price they can earn an acceptable profit on,” Schriefer said. “More consumers are voting with their dollars, wanting to know where and how their food is produced, and that their dollars end up in a farmer’s pocket rather than everyone but the farmer who assumes all the risk.”

Feasibility research

Using the funds from the VAPG grant, the group has held farmer input meetings, travelled to trade shows, and has had an online survey going to collect input. On their website, it says the survey must be completed by Nov. 30, 2018, but this is not the case – the survey remains open, and both an online and paper version are available.

To find the online or the downloadable paper survey, go to:

Online Survey

https://uwex.co1.qualtrics.com/jfe/form/SV_869HwkGmqz1vD3D

Paper Survey

https://drive.google.com/file/d/1RgQWxBiqaCdK1EvTHndF1oK8RN6vWFKT/view

Dan Hottman, UW-Extension Community Development Educator for Iowa County, says they expect the survey results to be completed and available in late March of 2019.

For farmers who are interested in being kept abreast of developments with the cooperative, you can e-mail driftlesspoultrycooperative@gmail.comand ask to be added to their listserve.

Next steps

According to Gene Schriefer, the group has already gotten about 150 responses to their survey, mostly from Southwest Wisconsin and a handful from Northwest Illinois and Northeast Iowa.

“The top issues that are identified so far by survey participants are access to processing, custom labelling, and value-added processing,” Schriefer said. “Certified organic processing was ranked fifth among the concerns of interested producers.”

Schriefer said that the first order of business for the fledgling cooperative would be to get their processing facility up and running to process about 200,000 birds per day in a 2,000 to 3,000-square-foot facility. Ideally, he said, they would like to choose a location in Southwest Wisconsin that is amendable to housing the facility, where the plant could be hooked up to a municipal water supply.

Down the road, Schriefer said, some sort of cooperative brand may prove to be a “natural outcome” of the venture.

“Many of the producers in the area have already formed informal marketing partnerships,” Schriefer said. “One producer who raises chickens and turkeys may have a customer interested in waterfowl, for instance.”

If and when the business decided to launch into a branded cooperative effort, they would need to have lots of discussion about what production standards would be best suited to meet the needs of their target consumer segment.

“I am familiar with Rod Ofte and his Wisconsin Meadows grassfed beef brand, and have also talked with Mike Mueller and the pastured pork cooperative,” Schriefer said. “It is possible down the road that our businesses could find some advantages in some sort of collaboration, but anything like that is a ways off for our poultry processing cooperative.”

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