Feasibility*Study;*Meat*Processing*Facility ...· Feasibility! Study;! Meat! Processing! Facility,!

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    Feasibility Study; Meat Processing Facility A Collaborative Cooperative

    Salmon ID, Challis ID, MacKay ID

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    Project Team:

    Daniel R. Robles; PE, MBA, Director of Coengineers, PLLC, A professional engineering and business analysis corporation located in the State of Washington

    John Harper, under contract to Coengineers, University of California Cooperative Extension Mendocino & Lake Counties California

    Dr. Robert Needham; Project Manager and advisor to the Salmon Valley Meat Processing Cooperative,

    Salmon Valley Meat Processing Cooperative Steering Committee, representing the towns of Challis, Salmon, and MacKay Idaho

    Reference As: Robles, D.R. 2014; Feasibility Study; Meat Processing Facility, Salmon Valley cooperative, Challis, Mackay, Salmon Idaho. Community Engineering Services, PLLC and adaptations of the following works by: (1) Hardesty, S and J. Harper 2013 University of California Cooperative Extension; Mendocino County Meat Plant Study Staying Local; Public Domain per U.S. Department of Commerce Award No. 07 79 06702; (2) University of Idaho: Strategies to Increase Prosperity For Small Farms Through Sustainable Livestock Production, Processing And Marketing 2014. (3) Oklahoma State University, Dr. Rodney Holcomb, Templates for meat plant feasibility studies. Acknowledgements: Community Engineering Services, PLLC is especially grateful to the general openness and spirit of collaboration among small-scale food producers who contributed generously to this report. A large volume of data, information, knowledge, innovation, and wisdom was readily and openly available from hundreds of groups and researcher who have tried many different ways to achieve the ideal of small-scale meat plant production. We offer a special thanks to John Harper from the University of California Extension for consulting to this project. His deep knowledge and experience in ranching a meat processing was the ideal compliment to our engineering and operations focus. His prior work in California was a near perfect match upon which to base a feasibility document for his neighbors in Salmon Valley, Central Idaho. The following list is not exhaustive since these people all cite the experience of those who came before them, and in many cases, they cite each others work. The small meat processing movement is blessed with a true spirit of collaboration.

    Island County Cooperation Puget Sound Meat Processing Co-op

    CPoW Livestock Processors CoopOdessa WA Taos Economic Development Corporation

    University of California, Extension Svcs Polar King Industries

    Mike Callicrate; Ranch Foods Direct TriVan Conversions

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    CONTENTS: Project Team 2 Reference as 2 Acknowledgements 2 Contents 3 Executive Summary 5 Introduction 9 Analysis and Demand For USDA Processing 10 General Trends in Local/Specialty Meat 10 Demand for local Meat Processing 11 Livestock Production in Central Idaho 12 Rancher Survey of Potential Utilization 16 Cooperative Business Structure 17 What Works / What Doesnt 17 Case Studies 20

    Island Growers Farmers Cooperative 20 Taos County Research Institute 22 Mike Callicrate MPU 23 Puget Sound Meat Producers Cooperative 26 Cooperative Processors of Washington 29 Mendocino County Feasibility Study 30

    SVC Plant Requirements 32 USDA Regulations 32 Wastewater Management 33 Composting and Rendering 34 SVC Plant Options 36

    Three Phase Approach 40 Option A; Phase 1 40 Option A; Phase 2 42 Option A; Phase 3 44 Option B 45

    Risk Assessment and Mitigation 47 Degree of Processing 48 Site Selection 51 Coop Shared Responsibility 52 Summary Conclusion 54 APPENDIX A: Position Descriptions; Management/Staff 51 APPENDIX B: Financials; Worksheets 62 APPENDIX C: Additional Case Studies 78 APPENDIX D: Meat Processors In Idaho 84 APPENDIX E: Resources, Training, And Consultants 87 Bibliography 91

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    TABLES: Table 1-1: Summary Of Options 6 Table 1-2: Risk Adjusted Returns 6 Table 2-1: U.S. Retail Beef Sales between 2012-2013 11 Table 3-1 Processing Scenarios and Markets Served 15 Table 4: Cost Estimates for fixed facility, Mendocino County Feasibility Study 31 Table 5: Estimate of Upfront Start-up Project Costs for Two Options 39 Table 6A and 6B; Conversion Tables for EAU and total Head Count 40 Table 7: Operating Assumptions for Revenue Calculations 40 Table 8: Option A, Phase 1: Personnel Costs 41 Table 9: Option A, Phase 1: Start-up and Personnel Costs 41 Table 10: Option A, Phase 2: Personnel Costs 42 Table 11: Option A, Phase 2: Start-up and Personnel Costs 42 Table 12: Option A, Phase 3: Personnel Costs 44 Table 13: Option A, Phase 3: Start-up and Personnel Costs 44 Table 14: Option B, Personnel Costs 45 Table 15: Option B, Start-up and Personnel Costs 45 Table 16: Financial Performance all options 46 Table 17: Production Cycle for Cattle in Central Idaho 46 Table 18: Risk Adjusted Return pegged at @10% 47 Table 19: Summary of Equipment for Beef Processing Operation 49 Table 20: Summary of Equipment for Pork Processing Operation 49 Table 21: Options For Each function of Meat Processing Operation 53 Table 22a: Possible phase 1 and 2 function corresponding Coop Locations 53 Table 22b: Possible phase 3 function corresponding to Coop Locations 53 Table 22c: Option B functions corresponding to Coop Locations 53

    FIGURES: Figure 1: Early Mobile Slaughter Unit by The Island Grown Farmers' Cooperative 20 Figure 2a: Polar King Cooler Module. 2b: Reefer/MSU unloading to Module 22 Figure 3: Callicrate System Mobile Kill Box 24 Figure 4: Mike Callicrate System for Mobile / Modular Processing 25 Figure 5: Mobile Slaughter Unit By TriVan Conversions 26 Figure 6: Fixed Facility; Cooperative Processors of Washington, Odessa, WA 29 Figure 7: Two Site Modular Meat Processing Illustration of Flow 30 Figure 8: Polar King Cut and Wrap Module with added cooler/freezer 36 Figure 9: TriVan Conversions Mobile Slaughter Unit on Medium Cab 37 Figure 10: Modular Slaughter Unit set in place with integrated building 37 Figure 11: Insulated Metal Building typical for fixed processing facility 38 Figure 12: Carcass hangs for cooling/aging or cut into primals 48 Figure 13: Wrapped Meat Aging on Racks 48 Figure 14: Cut and Wrap Operations in Clean Cooled USDA Insp. Environment 48 Figure 15: individually wrapped cuts Reqs tracking, logistics, and QC 48 Figure 16: Mike Callicrate has had considerable success with retail sales 50

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    Salmon Valley Meat Processing Facility Feasibility Study - Executive Summary The proposed project is for a small-scale multi-species USDA inspected meat plant that will primarily serve ranchers in the Salmon Valley area of Central Idaho. It will process cattle, sheep, hogs, and lamb. This proposed project is different from many case studies because most of the ranchers who would be served, currently sell their livestock at auction to large processors. They will primarily be shifting their sale of live animals for deferred payment, albeit possibly higher margins, by becoming participants in the business of processing of meat. Recent studies indicate that the increased consumer interest in locally raised, grass fed, and/or organic meat is based on the perception and evidence about healthier fats, reduced environmental impact, and increased animal welfare compared with beef raised and/or finished in confinement systems and processed in industrial factories. The lack of nearby processing facilities limits the marketing options for ranchers. It is far simpler to just sell live animals at the cost of being reliant on external entities. A recent study by University of Idaho concludes that there is enough livestock in the area to support meat-processing facilities with capacity of 2,400 to 16,000 animals and possibly many more. The facilities proposed here fit well within the current projections. A structured survey of 5 members of the steering committee indicate that there is significant interest in building self-sufficiency, job creation, sustainability, and value added to an existing local industry. Ranchers currently sell livestock directly to processors at autumn auction prices. In order for local production to compete with the auction culture, the rancher would need to accept deferred payment for their livestock, or the Co-op must buy the livestock at auction prices from the Rancher. The co-operative may also offer bridge loans to a Rancher. Ranchers are accustomed to preparing stock for autumn harvest creating a peak season and a lax season whereas the local processing facility proposal is beast suited for year-round steady


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