North Carolina, 2007

North Carolina, 2007

Study title: “Report on the Feasibility of a Small-scale, Small-animal Slaughter Facility for Independent Meat Producers in North Carolina”
Date of study: February 2007
Author: Smithson Mills, North Carolina Department of Agriculture & Consumer Services (NCDA&CS)
1001 Mail Service Center, Raleigh, NC 27699-1001; (919) 733-7125
Geographic area covered: North Carolina
Funding for the study: North Carolina Golden LEAF Foundation[1]
Link to full study: NCDA Feasibility Study

Determine the feasibility of a small-scale inspected slaughter facility for poultry and rabbit-meat production in North Carolina.

North Carolina is the fourth-largest poultry producing state in the country but has (at time of this study) only two inspected slaughter facilities serving independent small-scale small-animal growers: one in Pittsboro and one in Bladenboro.

A producer survey (n=60) showed strong interest among small, diversified farms, throughout NC, in access to an inspected slaughter and processing facility, to allow increased production and sales. Most of these producers were currently selling processed meat from their farms directly to consumers; many were interested in larger-volume wholesale trade to restaurants and grocery retailers.

Methods and scope
The study and final report include the following:

  • Secondary research on similar projects
  • Statewide survey to measure demand for a facility and determine the geographical area with greatest need
  • Interviews and focus groups with prospective facility users
  • Assessment of market demand for local poultry
  • Recommendations for possible site locations
  • Review of regulatory guidelines
  • Proposed facility designs and suggested equipment, with cost estimates — NOTE: detailed plant designs and equipment lists are included in the final report
  • Legal and managerial options for a facility.

What kind of livestock?
Small meat animals, mostly chickens and turkeys but also rabbits and niche poultry such as quail and ducks.

Annual slaughter totals
Most survey respondents had mixed-livestock operations, including beef and swine as well as poultry (multiple species) and rabbits. Herd sizes ranged from very small (10) to large (>1000).

Current marketing practices
One-third of respondents were direct-marketing to consumers; one-fourth marketed to restaurants. Several rabbit growers hoped to sell live animals to a slaughter facility. Respondents sold in a variety of formats: live, wholes, halves, and quarters.

Available processing options and challenges
Four options were evaluated:

  • Identify an existing meat processor willing to expand services to include independent poultry and rabbit growers.

No existing large-animal slaughterhouse in the area was interested in such an expansion.

  • Develop a small-animal processing facility using private equity investment.

Private equity investment options for such a facility were limited, though growers could have raised a portion of development or operational costs through pre-paid access to the facility.

  • Develop a small pilot plant on state-owned land, possibly an agricultural research station, to be managed by a state entity.

A pilot plant at the Mountain Horticultural Crops Research Station could be a viable training and educational project.

  • Develop a pilot plant to be owned and operated by a local government or nonprofit

A pilot plant located in Marion would be centrally accessible to small-animal meat producers in Western North Carolina, and land was possibly available at no cost, with access to physical infrastructure necessary for such a facility.

Results and Recommendations
Study authors recommended construction of a small “pilot” facility with a maximum daily throughput of not more than 1,000 chickens a day that can be efficiently operated with minimal workers. The facility would start small but be designed to be scalable to allow for future expansion. It would begin as state-inspected but be designed to meet regulatory requirements for federal inspection as a future option.

Cost estimates

  • START-UP COSTS: $550,000 ($450,000 for site preparation, utility tie-in, facility construction; $100,000 for equipment purchase & installation)
  • OPERATIONAL COSTS: $100,000/yr (salaries, utilities and maintenance, liability insurance, workers compensation)
  • REVENUE: $80,000/yr (based on processing fees at similar facilities and ~33,000 animals/yr at start-up)
  • PROJECT MANAGEMENT COSTS: $200,000 over 5 years (to cover initial project management during implementation and the $20K/yr in operating costs not covered by revenues).

Is it feasible?
Study authors suggest the facility could break even in three to five years. Based on their cost estimates, this will require (a) a significant and quick increase in throughput, hence revenues, (b) outside investment (public and/or private funding), or a combination of both.

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