Direct On-Farm Marketing of Slaughter Lambs and Goats
tatiana Stanton, April 2013
(Cornell Small Ruminant Extension Specialist)
Originally written for the Goat farmer in 2000, but substantially updated in 2013
There are many ways to market lambs and slaughter goats in the Northeast US. One method is to forgo middlemen and instead market your live animals directly from your farm to consumers. Direct on-farm marketing can be time consuming and stressful depending on how many of its inherent responsibilities you end up assuming. However, it's also a great chance to meet new folks and learn about a diverse range of cultures and ethnic groups. Before you attempt direct marketing, you need to determine what size and age lamb or goat kid makes the most sense for you to raise based on 1) what consumer demand is in your area and 2) what the costs of production and expected returns are to grow animals out for each category. You also need to understand what additional responsibilities and expenses you may incur when selling animals directly to consumers. This article outlines some of the duties involved in on-farm marketing.
By "direct on-farm marketing" I refer to two different scenarios, each operating under a different set of legal requirements. In the first scenario, the customers come to the farm and pick out an animal for their family's consumption, and either slaughter the animal at the farm or load it in their vehicle to slaughter elsewhere. The animal does not need to be slaughtered under USDA federal inspection because the activity falls under the "personal use exemption" 9 CFR 303.1(a)(1) which allows the owner of an animal to slaughter the animal themselves if it is for consumption only by them and their family and friends. The second scenario is the standard "freezer trade" where a customer orders an animal to be picked out for them and delivered to a slaughterhouse for slaughter and processing according to their cutting instructions for consumption by their family and friends. The customer does not necessarily have to see the animal in advance but should have communicated directly with you when placing the order for an animal. In this case the animal does not necessarily have to be slaughtered under USDA federal inspection but can instead be slaughtered at a custom exempt slaughter house under the "custom exemption" 9 CFR 303.1(a)(2). Yu can transport the animal to the slaughterhouse as a service for the new owner.
Depending on the clientele in your local area, you may not have much choice as to which of these scenarios you get involved with. Rather, your clientele may have a strong preference for only one method of direct marketing. Your ability to conform to their needs may determine whether on-farm direct marketing is going to work for you.
Prior to getting involved with either scenario, it's a good idea to form some plans for managing either situation on your particular farm. Here are some considerations: Initially a producer will need to advertise and actively seek clientele. It is a good idea to have the slaughter animals separated from the breeding stock or to have an easy way for customers to identify which is which. Posting prices and sticking with them will help cut down on the time spent bickering over prices. Farmers will need to decide if they are able and/or willing to be involved in the slaughter process by either providing a place for the customer to slaughter the animal or by providing transportation to a slaughter house. A farmer may instead want to work only with customers that pick out an animal and then transport it off farm for slaughter. Either of these channels may work well for farm families who enjoy dealing with numerous customers one-on-one and meeting new cultures.
Scenario 1 – the consumer comes to your farm and may or may not slaughter there.
- Clientele – Your clientele can range from recent immigrants (possibly refugees) to your country to well established citizens whose families pride themselves on keeping alive ethnic traditions of doing their own selection, slaughtering and preparation of lamb or goat for family celebrations. In either case you may find an extended family descending on your farm. Keep in mind that the visit to your farm may be considered a special outing. If you farm for the isolation, this family outing can be a little disconcerting though likely beneficial for your mental health! It can also be time consuming depending on how you organize the visit.
- Advertising – If you live near a city with a large refugee community, you can advertise in refugee newsletters and at government offices and religious centers that offer refugee services. However, refugee communities can be close-knit and wary of business that doesn't involve a personal touch. If possible, arrange to talk to a gathering in person about your business. In reality though, many goats and lamb producers who market large quantities of animals directly have found that the refugee community seeks them out and no further advertisement is necessary. More aggressive advertisement can be accomplished by writing short articles accompanied by photos about your farm and farm produce and submitting these to magazines, radio shows, TV stations, newspapers and associations that cater to ethnic groups that historically consume goat meat.
- The farm visit – newly arrived refugees may not have easy access to cars and phones. This translates to "they may show up unannounced to purchase a lamb or goat any time they can arrange a ride out". The timing of this visit often immediately precedes specific holidays. If you want to limit on-farm purchases to specific days, try to find out what times of the week are convenient to both you and your clientele and then come up with a plan to publicize these times to the refugee community. Customers who are long time citizens are generally quite willing to phone ahead to make an appointment to pick out animals. However, particularly the first time they come to your farm, they may wish to bring the whole family. This means it is generally convenient for them to visit on a weekend. Keep in mind that many families do not have large refrigeration or freezer capacities hence they may need to slaughter on the day preceding or morning of a specific holiday. On-farm marketing may not be ideal for your family if weekends and holidays are your only private times together.
- The farm dog – no matter how friendly your farm dog is, it is often best to be prepared to offer to confine him when customers arrive. Folks from the city may not be comfortable around an unrestrained dog. Immigrants may come from countries where dogs are trained by private owners or the military to attack people. A refugee who has had family members hunted down by dogs is not going to be cured of his or her dog phobia on the basis of your saying "Don't worry, she won't bite."
- Location of your "for sale" goats – Try to have your slaughter kids separated from kids you are not offering for sale. This way you don't have buyers pointing at kids you are retaining as breeding stock only to have you say repeatedly, "oh sorry, that one is not for sale". Remember, customers may not readily understand that the best animals are kept for breeding future generations. Instead they may get the impression you are attempting to shortchange them. If it is not possible to separate slaughter kids from the rest of the herd, have them clearly marked in advance so buyers have an easy time grasping what pool of animals they can select from. Try to have slaughter animals located at easy access and in an area where it is easy to catch up individual animals. It will save you time if you do not have to walk out to a far pasture or bring in the whole herd to corral a selected animal.
- Bargaining – Unless you love to bargain, try to have a fixed price you offer all on-farm customers. If you allow the price to vary from customer to customer, the word will get around in the close knit communities you may be selling to. Consequently, you may find your on-farm transactions taking forever because you and the customer are bickering over prices. I have had customers who I have grown close to suffer major economic reversals or family tragedies. In these situations, I have made them a gift of a part or whole carcass rather than lowering my prices. This does not mean that you can't have a range of prices depending on the quality, age, size of the goats you are selling. Just make sure that your customers can easily identify why an animal is being assigned to a certain group and what your fixed price is for that group.
- Slaughter arrangements - If your plan is to permit on-farm slaughter, be sure to check with your state to find out the state regulations on allowing customers to slaughter on-farm. Some states have additional requirements to the "personal use exemption" in the federal code and may require that a consumer who has purchased an animal for their own consumption slaughter the animal only on their own premises rather than on the producer's farm. If there are any questions about state requirements on this topic ask for a printed copy of the regulation and a layperson's interpretation of it. It is also a good idea to find out how other nearby producers handle these transactions.
- Liability- Allowing customers to slaughter on-farm may be opening up your farm to liability issues. Recently, some farmers have reported that their insurance companies have tried to drop them when they have been open about the amount of on-farm slaughter that goes on at their farm. Insurance companies may ask that your customers carry a certain amount of liability insurance themselves. In this case, you can ask what your insurance company charges for a short term (i.e. day long) certificate of liability insurance and whether they would be willing to sell such policies to your customers. In earlier years, more insurance companies seemed to be aware that on-farm slaughter by consumers was legal in New York and did not seem as concerned about liability coverage.
New York follows the federal code with regard to the "personal use exemption". Under the "personal use exemption", it is permissible for a farmer to let a consumer come to the farm and purchase an animal for consumption by their family and friends. Once the consumer takes ownership of the animal it is legal under the personal use exemption for the consumer (but not the farmer) to slaughter the animal on the farmer's property with the farmer's permission. The farmer may provide a place for the slaughtering, de-hiding, evisceration etc. but should not provide equipment for further processing of the carcass.
In some cases the customer loads the lamb or goat in their vehicle to transport for slaughtering elsewhere. It is your responsibility to make sure the customer is transporting the animal in a humane manner. Closing the animal in the trunk of a car DOES NOT qualify and can result in the customer being ticketed.
If a farmer is in a region that allows on-farm slaughter, there are several factors to consider with regard to the slaughtering process, facilities needed, and disposal of offal. Keep in mind that the "personal use exemption" in the federal code does not permit a farmer to assist in the slaughter for a customer unless the farm has a licensed state, federal or custom slaughter plant. Therefore, the actual consumer needs to slaughter the animal themself without your participation. Make sure that your customers are experienced butchers and that you are comfortable with the slaughter practices of a wide range of ethnic groups.
When it comes to facilities, at bare minimum you will need to provide a tree or beam with a hook affixed to it for hanging carcasses and a clean 5 gallon plastic bucket of potable water. There are several ways to restrain small ruminants for slaughter that are more humane then simply hoisting them up by their hind legs. Ideally animals should be slaughtered on the ground or on a double rail prior to being hung. To get an idea of humane restrainers you can build for your own farm, study the basic principles of humane restraint outlined by Dr. Temple Grandin on her website. One example of a double rail for small ruminants that can be greatly simplified for on-farm use is shown on the web at http://www.sheepgoatmarketing.info/education/restrainer/slideshow/index.html .
If you provide a table for cutting up carcasses, you also need to provide provision for sanitizing the table between customers. Same goes for any equipment, utensils you lend out. Some farms go as far as providing a fire pit for cooking the meat, searing the hair off goat heads, etc. or even a picnic area for the resulting feast. However, these facilities will increase the time families spend on your farm. Before you provide them, consider how much interruption of your private life you are comfortable with. Depending on the time of year, your butchering area may need protection from rain, cold and snow.
Many cultures consume most of the animal. In this case, disposal of the remains is relatively simple. If people are washing stomachs and intestines, providing extra water or a hose is helpful. You can then direct them to empty rumen contents, etc. into a wheelbarrow for you to properly discard later. Hides can be salted and either tanned by your family or stacked for shipping to a professional tannery. However, if you have lots of customers or customers who do not want the "innards", you need to make more sophisticated provisions. Some options include: 1) having a pre-dug trench for customers to wheelbarrow the remains to, 2) paying a rendering company to pick up the offal weekly, or 3) composting the remains on farm. Composting of offal is legal in many states. For example, in New York, on-farm disposal of materials like offal that are generated on-farm does not require a solid waste permit and is exempt from DEC regulations. However, you must conform to local ordinances and cannot pollute water sources. It is best to check with state and local officials to ensure disposal is done in accordance with any local regulations.
If you are composting lots of bones and offal you need to mix them with a low nitrogen, high carbon medium to obtain the right carbon to nitrogen ratio for rapid composting. Thus, wood chips, sawdust, straw, and old round bales of grass hay are more suitable as a medium than are soiled bedding, manure or lawn clippings. The Cornell Solid Waste Management Center publication, http://compost.css.cornell.edu/naturalrenderingFS.pdf, provides the recommended procedures for dealing with on-farm disposal of offal. . Jean Bonhotal at the Solid Waste Management Center at Cornell University (http://cwmi.css.cornell.edu/) can provide the current recommended procedures for dealing with on-farm disposal of offal.
Live Animal Markets - In some regions near high concentrations of ethnic populations, there are live animal markets. These markets are not to be confused with auctions. Rather, these are retail businesses where direct consumers can go and view penned animals, make their pick, and have the animal slaughtered at an on-site custom exempt slaughterhouse. Several sheep and goat farms in New York operate as "live animal market". These farms have gone one step beyond the "on-farm" slaughter scenario. Rather than leaving the butchering to the customer, they are equipped with on-site custom exempt slaughter and meat processing facilities where the farmer and his staff handle the butchering and processing. Often these custom exempt facilities provide additional farm income by processing white tail deer during hunting season.
Scenario 2 – the consumer contracts with the farmer either in person, by phone or by internet to purchase a live lamb or goat for delivery to a slaughterhouse without necessarily viewing the animal. Because the consumer essentially becomes the owner of the animal at the time of ordering, the animal does not have to be slaughtered in a USDA federally inspected plant. Instead, the animals can be slaughtered at a custom exempt slaughter house under the "custom exemption" in the federal code, which provides that the owner of an animal does not have to have the carcass federally inspected if the meat is going directly back to the owner's household for consumption. The farmer must keep impeccable records of the transaction including the consumer's name and address for each animal delivered. Ownership of the animal can be split among multiple consumers but the animal must be identified and tracked from the time it is ordered until the meat is picked up by the consumers that have been assigned ownership of it. The meat is stamped "not for resale" and then bagged for the customer to take home. Liability for the food safety of the product is generally covered by the custom exempt plant. It is assumed that the farmer is simply delivering the animal to the slaughterhouse as a courtesy and that the farmer and customer (new owner) have some personal connection. Therefore situations where the customer resides hundreds of miles away and has never seen the farm do not really fit the "freezer trade" scenario. Freezer trade customers may purchase the animal by the head or by live weight. Processing and transportation costs may be added to the cost, but it is recommended that the customer pay the processor directly.
- Clientele – Customers in this case are often busy people. They may come from an ethnic group with a history of lamb or goat consumption or may be trying out the meat for the first time. If they are new to cooking goat meat or lamb, be sure to provide them with some excellent, convenient recipes and cooking tips.
- Advertising – A common mistake here is to advertise your slaughter animals in the same farmer newspapers you would advertise breeding stock. Instead, it works best to advertise them in the classified ads of general public newspapers in nearby metropolitan areas. You want to use terms that emphasize the finished product. However, unless the meat is to be slaughtered by a USDA slaughterhouse rather than a custom plant, you cannot advertise that you are selling meat. Remember that legally you are selling the live animal. Lamb producers will often state that they are selling freezer lamb. There really is not a similar term for goats. Often the best you can do is state that you have slaughter goats for sale, delivery to butcher included. Some other ways to advertise are 1) send articles to magazines, newsletters, radio and TV stations that represent specific ethnic groups or the local food movement, 2) advertise your farm products on on-line "local food" directories, 3) post flyers at religious and social centers preceding specific holidays, 3) ask to speak to various ethnic associations or clubs, 4) advertise on college campuses with a large foreign student population, 5) leave your brochure or business card with nearby custom and/or USDA inspected slaughterhouses, and 6) hand out free samples of a lamb or goat meat dish (shish kebab and speidies are perfect for this) at local farmers' markets or community festivals, etc. In the U.S., meat used for sampling purposes must be USDA inspected. Usually the event will have rules as to whether the meat must be cooked by a caterer or by a farm with a specified amount of liability insurance.
- Price setting - Again, have a set price for all your customers unless you love to bargain. If you are selling the animal by its live weight, be sure the customer understands how much packaged meat they will likely receive from the animal and how the retail cuts will be distributed. Many people are no longer familiar with livestock rearing and may expect an 80 lb. live weight animal to yield 80 lbs. of meat and four hind leg roasts. If selling by live weight you need to have weighed the animal on a certified scale. Another option is to weight the animal on a scale that has not been certified and then sell the animal by the head based on an estimate of what you would have expected to get for it if sold by the pound.
- Butchering arrangements – If at all possible, have the butcher and customer talk together to determine the cost and specific instructions for butchering. This way, there is less chance of confusion as to how the meat should be cut up and any problems that arise are not your responsibility. However, many customers are very busy. Additionally, the butcher may prefer to talk to the farmer rather than talking to each customer individually. A good alternative is to have your customers fill out easy to understand "cutting sheets" and then get together with them over the phone to review these cutting sheets. A Ethnic customers using animals for curry dishes may want the carcass processed into 1 ½-inch chunks of meat and bone on a band saw, while other customers may want roasts, chops, steaks with the remainder deboned for either stew or ground meat. A reliable butcher who is tolerant of the needs of various ethnic groups is a must for this kind of on-farm marketing. Make sure that you and the customer understand clearly that in the end analyses the customer is responsible for making sure the cutting instructions were followed, the processing fees paid and the meat or carcass picked up after processing.
On-farm marketing is a great way to eliminate the extra costs associated with a middleman and realize more return on your product. In exchange, it is often time and labor consuming because you deal with many customers each of whom may only want to purchase a small number of animals. Therefore you need to make sure that the increase in financial return is adequate to cover the extra time you are spending marketing animals individually and/or taking them in small numbers to a processing plant rather than delivering animals as a large group to a processing plant or livestock dealer. It requires a commitment to aggressively market your animals and a responsibility to reliably satisfy customer needs. It is an excellent option for farm families who enjoy socializing and/or have several on-farm products to sell.