By Rob Leeds, Garth Ruff, Peggy Hall, Jacci Smith and Tony Nye, Ohio State University Extension
Producers looking to increase their income are looking for different ways to market their livestock. Direct marketing of livestock products to consumers is one of the means by which producers seek to increase profits from their livestock sales. When exploring direct market opportunities, farmers need to consider several factors: regulations, consumer preferences, marketing strategies and price.
The Ohio Department of Agriculture (ODA) and the local Department of Health are the two agencies responsible for regulating meat sales in Ohio. The ODA oversees processing plants and sets food safety regulations for the state. The local health department enforces local food safety regulations.
Producers can slaughter and sell their own chickens (up to 1,000 birds), rabbits, or non-edible meat directly on the farm without a license if it’s the only food they sell, or with a farmer’s market registration s they sell non-edible meat. meats with other low-risk foods. In order to sell “higher risk” meat products to the public (including cattle, hogs, sheep and goats), producers must have their animals processed in a fully inspected facility under CFIA meat inspection. state or federal government.
Meat processed in a fully inspected state processing plant will bear an Ohio-shaped label that reads “OHIO Inspected and Adopted by the Department of Agriculture.” Federally inspected product will have a circle on the label that says the same thing, replacing “OHIO” with “US”. develop an ODA-approved label. In Ohio, there are also custom exempt plants. The products processed in customs-cleared factories are intended for the producer’s own use, the meat cannot be resold. These products will be labeled “Not for sale”. More information is available at https://agri.ohio.gov/wps/portal/gov/oda/divisions/food-safety.
Depending on the marketing strategy, selling meat from a fully inspected plant may require a license. If a producer sells meat by taking orders, delivering the animal to the processing plant, then the customer gets the product after processing is complete; no retail license is required. If you want to deliver pre-ordered frozen meat, you do not need a license from your local health department, as long as the meat is delivered directly to the individual from the meat processing facility, without intermediate storage. If you are storing your meat, you will need a storage location, which is considered a warehouse, and this must be registered and inspected by the Food Safety Division of the ODA. A house can’t be a warehouse, but you can use your garage or an outbuilding to store your freezers.
Some local health departments only require warehouse registration when selling a fully inspected product from your residence, but some require an additional license. In order to sell a fully inspected meat product from a farmers market or farmers market, it is necessary to obtain either a Mobile Food Establishment License or a Temporary Food Establishment License. A mobile food establishment license is for people who sell from a portable structure that changes location regularly. This is the license most often used by vendors at farmers’ markets. A temporary food establishment license is for operations that operate for short periods of time. These licenses are obtained from local health departments. Each local health department sets fees and licensing requirements in their area. Producers should work with the local health department when considering marketing options. For more information on licensing, see “Selling Farm Food: When Do You Need a License?” at https://farmoffice.osu.edu/sites/aglaw/files/site-library/Food%20Sales%20at%20Farm%20law%20bulletin%20final.pdf
To explore the possibility of direct marketing, it is important to know the preferences of the customer. For example; is there a market for whole, halves or quarters? What cuts of meat are preferred? What quantity is the customer looking for? What prices are relevant? Finding answers to these types of questions will help a producer meet customer needs. Many families do not have access to ample freezer space. This reduces their interest in buying meat in bulk. Most families may only want to buy the cuts of meat that their family prefers. Some areas have a higher per capita income, which will be a factor in the price sensitivity of potential customers. These are examples of factors that should be considered when developing a marketing plan.
It is important to think about how to present your product to your customers. There are several options including; customer pickup, farmers markets and on-farm sales. Each strategy has advantages and disadvantages. For example, selling the meat product to order and having the customer collect the product from the processor does not require any license from you and the marketing is done before the product is produced. However, potential customers must have adequate freezer space. Farmers’ markets are a good way to increase your unit price and develop the visibility of your product. However, more effort needs to be put into marketing, market hours are limited and structured, licensing is required, and sales are in smaller units.
On-farm market sales offer the same chance to increase the unit price, control selling hours, and reduce the labor required to transport produce to an off-site location. Concerns are that a license is required, your farm must remain presentable to customers, and you must be comfortable and prepared for customer liability on farm property. Keep in mind that any direct marketing method will focus on building your brand and customer service. Developing these customer relationships may require a new skill set for some producers. Producers should choose a marketing strategy that matches their business and personal goals.
In order to determine a selling price, a producer needs to know how much of a salable product can be produced and the total costs of producing that product. Two common methods of selling meat include selling a portion of the carcass, including whole carcasses, half carcasses, and quarters, and selling retail cuts. If producers market their product by asking customers to pick up the finished meat product; the carcass weight will be the final product. An estimated carcass weight is % dressing x live weight = estimated carcass weight.
The average dressing percentages are:
beef cattle — 62%
dairy steers — 59%
market hogs — 74%
shorn market lambs — 54%.
If producers are looking to sell retail cuts, carcass cut yield should be calculated to estimate your salable product. Cutting performance is affected by fat, muscle and bone compared to boneless. Carcass cut yield = (lbs of meat/carcass weight*100).
Careful analysis of the cost of production is needed to set a retail price for a product. The main costs associated with meat production are: live animal input costs, processing costs, marketing costs and profit margin. Producers must have calculated all costs before pricing the final products. Before setting a price for each retail cut, be sure to compare prices with local competitors. Local food producers should rarely be below a supermarket price. Through effective marketing of a quality product, a producer can establish a brand and relationship directly with customers, which leads to a profitable business venture.