feasibility!study!for!! hawai …hawaiiislandmeat.com/docs/him_feasibilitystudy.pdf · ·...
TRANSCRIPT
!!
!
Feasibility!Study!for!!
Hawai‘i!Island!Mobile!Slaughter!Unit!!
!
September!2014!
!
!
Prepared!by:!!
Dana!Shapiro,!M.Sc.!
Sustainable+Rural+Development+Consulting+
!
On!behalf!of:!
Hawai‘i!Island!Mobile!Slaughter!Unit!Task!Force:!
The%Kohala%Center%
Big%Island%Resource%Conservation%&%Development%Council%
Hawai’i%Small%Business%Development%Center%Network%
Hawai’i%Sheep%&%Goat%Association%
Independent%Hawai’i%Island%Ranchers%!
2%
Table!of!Contents!
Executive%Summary%........................................................................................................................%4%
I.%Introduction%................................................................................................................................%8%
II.%Livestock%Producer%Interest%Assessment%..................................................................................%11%
Industry%Overview%....................................................................................................................%11%
Producer%Survey%.......................................................................................................................%15%
Preliminary%Results%...............................................................................................................%15%
Detailed%Survey%Results%........................................................................................................%17%
Table%1.%Producer%Survey%Highlights%.................................................................................%19%
III.%Market%Analysis%.......................................................................................................................%21%
Current%and%Potential%Livestock%Markets%.................................................................................%21%
Figure%1.%Comparison%of%Average%Local%vs.%Nonlocal%Retail%Meat%Prices%at%Selected%
Outlets%..............................................................................................................................%23%
Identifying%Potential%Marketing%Strategies%and%Sales%Outlets%..................................................%24%
Consumer%Survey%.....................................................................................................................%26%
Preliminary%Restaurant%Data%................................................................................................%26%
Detailed%Survey%Results%........................................................................................................%27%
Figure%2.%Percent%of%Establishments%Surveyed%That%Purchase%Local%Meats%.....................%28%
Figure%3.%Local%Beef%Sourcing,%By%Retailer%........................................................................%29%
Figure%4.%Local%Beef%Sourcing,%By%Restaurant%...................................................................%29%
IV.%Technical%Feasibility%................................................................................................................%32%
How%an%MSU%Works%.................................................................................................................%32%
Regulatory%Requirements%........................................................................................................%32%
Potable%Water%Supply%and%Waste%Water%Disposal%...............................................................%36%
Offal%Disposal%.......................................................................................................................%37%
Food%Safety%..........................................................................................................................%38%
Weights%and%Measures%.........................................................................................................%38%
Transportation%.....................................................................................................................%39%
Food%Defense%.......................................................................................................................%39%
Brand%Inspection%..................................................................................................................%39%
Business%Permit%....................................................................................................................%39%
Employment%Taxes%and%Worker%Safety%................................................................................%39%
Feral%Animals%........................................................................................................................%40%
Specialty%Food%Certification%and%Non%Certified%Slaughter%....................................................%40%
V.%Auxiliary%Considerations%..........................................................................................................%42%
Chill,%Cut/Wrap%and%Retail%Facility%...........................................................................................%42%
Docking%Site%Locations%and%Preparation%Requirements%...........................................................%45%
VI.%Economic%Feasibility%................................................................................................................%47%
Startup%Costs%............................................................................................................................%47%
MSU%......................................................................................................................................%48%
Table%2.%Comparison%of%MSU%Manufacturers%...................................................................%49%
Docking%Sites%and%Miscellaneous%Supplies%...........................................................................%51%
Butcher%Training%...................................................................................................................%52%
3%
HACCP%Certification%..............................................................................................................%52%
Table%3:%Breakdown%of%MSU%Start%Up%Costs%.........................................................................%52%
Livestock%Costs%and%Service%Fees%..............................................................................................%53%
Carcass%Yield%Assumptions%...................................................................................................%54%
Table%4:%Average%Live%and%Dressed%Animal%Weights,%By%Species%..........................................%55%
Wholesale%Price%....................................................................................................................%55%
Table%5:%Current%Meat%Harvesting%Prices%on%Hawai‘i%Island%.................................................%55%
Table%6:%Proposed%Hawai‘i%Island!MSU%Slaughter%Prices%......................................................%56%
Operating%Costs%........................................................................................................................%57%
Labor%....................................................................................................................................%57%
Supplies%................................................................................................................................%59%
Utilities%.................................................................................................................................%59%
Other%....................................................................................................................................%60%
Breakeven%Analysis%..................................................................................................................%61%
Table%7:%Maximum%Revenues%per%Species/Day%....................................................................%62%
Table%8:%Hawai‘i%Island%MSU%Breakeven%Volumes,%at%3%Days/Week%Capacity%......................%62%
Table%9:%Hawai‘i%Island%MSU%Breakeven%Volumes,%at%4%Days/Week%Capacity%......................%63%
Table%10:%Hawai‘i%Island%MSU%Breakeven%Volumes,%at%5%Days/Week%Capacity%....................%63%
Table%11:%Annual%Profit%&%Loss%Statement%...........................................................................%64%
VII.%Ownership%and%Organizational%Structures%.............................................................................%66%
Producer%Cooperative%..............................................................................................................%66%
C%Corporation%...........................................................................................................................%67%
S%Corporation%...........................................................................................................................%67%
Limited%Liability%Company%(LLC)%...............................................................................................%68%
VIII.%Summary%and%Recommendations%.........................................................................................%69%
Producer%Interest%and%Supply%...................................................................................................%69%
Consumer%Demand%and%Marketing%..........................................................................................%70%
Technical%Issues%and%Regulatory%Requirements%.......................................................................%72%
Auxiliary%Issues%.........................................................................................................................%74%
Economic%Feasibility%.................................................................................................................%75%
Ownership%and%Organizational%Structure%.................................................................................%76%
References%...................................................................................................................................%77%
Appendix%A%–%Producer%Survey%Form%...........................................................................................%80%
Appendix%B%–%Consumer%Survey%Form%..........................................................................................%80%
Appendix%C%–%MSU%Operating%Cost%Spreadsheets%........................................................................%80%
Appendix%D%–%Sample%Organizational%Documents%for%ProducereOwned%Entity%...........................%80%
4%
Executive!Summary!In%response%to%growing%demand%for%a%Mobile%Slaughter%Unit%(MSU)%from%Hawai‘i% Island%
ranchers,% two% noneprofit% organizations% came% together% in% 2011% to% consider% the% viability% of% an%
MSU.%%The%Big%Island%Resource%Conservation%&%Development%Council,%under%the%guidance%of%its%
late%President,%Kawika%Marquez,%partnered%with%the%Hawai‘i%Island%Small%Business%Development%
Center,%Hazel%Beck,% to%provide%the% initial%vision%and% leadership%to%champion%and%promote%the%
concept% of% an%MSU% for%Hawaii% Island.%A% third% local% noneprofit,% The% Kohala% Center,% joined% the%
project% in%2012,%bringing%critical% resources%such%as%cooperative%business%development%skills.%A%
small% group% of% producers,% including% representatives% from% the% Hawai‘i% Sheep% and% Goat%
Association%and% individual%cattle%and%hog%ranchers,% served%as% the%project%steering%committee.%
Now%called%the%“Hawai‘i%Island%MSU%Task%Force”%(the%Task%Force),%this%group%continues%to%work%
to%identify%producers’%specific%needs%and%explore%the%potential%of%an%MSU%in%greater%depth.%%
While%two%USDAecertified%slaughterhouses%currently%exist%on%Hawai‘i%Island,%many%smalle
scale% ranchers% lack% access% to% them% because% of% the% island’s% size% and% dispersed% geography.% In%
addition,%both%facilities%are%pressed%to%maximize%their%economy%of%scale%by%tailoring%their%service%
offerings% toward% largerescale% ranchers% on% a% priority% basis.% Meanwhile,% many% of% the% island’s%
smaller%ranchers%focus%on%producing%allenatural,%gourmet%or%other%specialty%meat%products,%and%
feel% the% existing% slaughterhouses% do% not% meet% their% needs% nor% their% quality% standards.%%
Consequently,%an%MSU%–%by%providing%mobile%rather%than%stationary%slaughter%services,%designed%
specifically%for%small%and%medium%size%producers%–%may%offer%promising%solutions%to%help%fill%this%
gap.% Over% 20%MSUs% already% exist% around% the% country,% effectively% bringing% slaughter% services%
directly% to% the% rancher% or% ranch% area.%MSUs% also% tend% to% be%much% cheaper% to% construct% and%
operate%than%stationary%slaughterhouses,%and%are% far%more%adaptable% to% the%varying%needs%of%
diverse% livestock% operations% –% lending% themselves% to% the% use% of% smallescale% ranchers% in%
dispersed%areas.% In%some%cases,%MSUs%have%succeeded% in%helping% to%revitalize% family% ranching%
and% increase% profits% to% small% producers,% while% increasing% the% availability% of% handecrafted,%
boutique%proteins%to%local%consumers.%%
Once%the%Task%Force%determined%the%MSU%concept%could%be%a%potentially%expedient%way%
of%enhancing%the%viability%and%sustainability%of%Hawai‘i%Island’s%meat%industry,%the%next%step%was%
5%
to% conduct% a% comprehensive% Feasibility% Study.% This% present% study% is% the% result% of% that% effort,%
developed% from% January% to% September% 2014% with% support% from% The% Kohala% Center% and% the%
Russell% Family%Foundation% (also%a% local% ranch% family).% It%explores% local%producer% interest% in%an%
MSU,%assesses%consumer%demand%for%local%meats%and%current%market%conditions,%and%explores%
all%relevant%technical%and%regulatory% issues,%as%well%as%economic%viability%and%options%for%MSU%
ownership%and%management%structure.%Preliminary%producer%surveys%were%conducted% in%2011%
and% 2012% with% individual% producers% and% at% the% Hawai‘i% Sheep% and% Goat% Association% annual%
meeting.%Results%were%incorporated%into%a%final%producer%survey,%administered%at%three%islande
wide%producer%meetings%in%July%and%September%2014.%Consumer%surveys%were%conducted%with%
chefs%at%Taste%of% the%Hawaiian%Range% in%2011,%and%by%phone%and% in%person%with%supermarket%
and% restaurant% buyers% in% March% 2014;% secondary% data% from% a% survey% of% retail% customers%
statewide%was%analyzed,%as%well.%%%
Study% results% indicated% that% there% is%overwhelming% interest% in%an%MSU% from%small%and%
medium%size%Hawai‘i%Island%producers%raising%cattle,%sheep,%goat%and%pig.%Over%90%%of%producers%
surveyed%said%they%would%be%interested%in%utilizing%an%MSU%if%one%were%available%on%the%island.%
Nearly%70%%of%producers%also%stated%a%willingness% to% invest% their%own%money% in%an%MSU,%and%
77%% said% they% would% consider% serving% on% a% producer% steering% committee% to% guide% ongoing%
efforts%to%bring%an%MSU%to%Hawai‘i% Island.%From%the%consumer%perspective,%the%past%few%years%
have%seen% increasing%demand%for% local,%naturally%raised%meats%from%both%wholesale%and%retail%
customers.% Local% meat% prices% tend% to% be% comparable% to% nonelocal% alternatives,% and% Hawai‘i%
Island%producers%tend%to%use%less%sophisticated%marketing%and%branding%approaches%than%those%
found%elsewhere%around%the%country%–%where% local%meats% tend%to%command%price%premiums.%
Among%wholesale% customers,% there% is% also% a% perception% that% local%meats% lack% consistency% in%
quantity%and%quality.%Nonetheless,% this%study% identified%substantial%unmet%market%demand%for%
more% local%meats,%especially%pork%and% lamb,%across%all%producers%segments.%A%successful%MSU%
initiative%should% include%development%of%a%cohesive%product%brand%and% facilitate%coordination%
among%small%and%medium%size%producers%to%ensure%a%consistent%supply%of%product%quantity%and%
quality%to%local%markets.%%%
6%
Technical%feasibility%issues%such%as%waste%disposal%and%scheduling%a%federal%inspector%can%
be% challenging% for% MSUs,% which% must% address% many% of% the% same% technical% issues% as% fixed%
slaughter%facilities%do,%as%well%as%specific%ones%pertaining%to%their%mobile%operation.%Fortunately,%
most%of%these%issues%have%been%well%vetted%by%the%nearly%two%dozen%MSUs%currently%operating%
around% the% country.% Although% many% of% these% regulatory% issues% have% not% been% addressed% in%
Hawai‘i%State%since%there%is%no%MSU%currently%in%operation,%officials%at%the%Hawai‘i%Department%
of%Health%and% the% local%USDA%office%are% supportive%and% interested% in%working%with% local%MSU%
initiatives% to% find%solutions.%The%economic%viability%of%an%MSU%will% likely% rely%on%operating%the%
unit%at%least%four%days%per%week,%50%weeks%per%year,%with%a%mix%of%cattle,%sheep,%goat%and%pigs;%
these%projections%are%based%on%slaughter%prices%comparable%to%those%currently%offered%by%the%
existing% slaughter% facilities% on% island.% While% animal% throughput% volumes% reported% in% the%
producer%survey%are%lower%than%projected%breakeven%volumes%(by%about%600%head%of%cattle,%100%
head%of%sheep%and%goats,%and%160%head%of%pig,%per%year),%there%is%good%potential%to%recruit%more%
producers%through%ongoing%outreach%and%education.%Further,%70%%of%producers% indicated%that%
they% plan% to% increase% production% and% herd% size% over% the% next% three% years,% suggesting% that%
throughput%numbers%can%be%expected%to%increase,%as%well.%%
Since% no% single% private% business% or% individual% has% stepped% up% to% fund% the% capital%
investment% for% a% local% MSU,% it% is% likely% that% a% Hawai‘i% Island% MSU% would% be% purchased% and%
owned% by% a% State% agency% or% local% nonprofit% such% as% the% Big% Island% Resource% Conservation%&%
Development%Council.%The%most%promising%organizational%structure%for%managing%the%unit%thus%
appears% to% be% a% producer% cooperative,% which% could% lease% the% unit% from% the% nonprofit% or%
government%entity.% This%model%would%enable%producers% to% control% their%own%slaughter%prices%
and%operation,%and%expand%organizational%capacity%to%include%other%services,%as%needed,%such%as%
chill,% cut/wrap,% marketing% and% sales,% or% feed% purchasing,% which% was% found% to% be% especially%
important%for%island%cattle%producers.%%
In% conclusion,% an% MSU% has% potential% to% be% an% important% part% of% a% sustainable% meat%
packing% solution% for% Hawai‘i% Island,% especially% by% working% in% partnership% with% or% as% a%
complement% to% current% slaughter% facilities.% The% MSU’s% target% users% of% smallemedium% scale%
ranchers%raising%beef,%sheep,%goat%and%pork%do%not%presently%have%reliable%and%regular%access%to%
7%
existing,%certified%processing%facilities%–%or%are%not%satisfied%with%the%current%options%because%of%
quality,%traceability%or%other%concerns.%Conservation%groups%and%hunters%may%also%be%interested%
in%using%the%MSU%to%process%feral%animals%so%this%meat%can%access%commercial%markets,%as%long%
as% such% animals% can% be% confined% for% anteemortem% inspection% by% a% USDA% inspector.% Hawai‘i%
Island%meat% producers% have% clearly% stated% that% they% believe% an%MSU%would% resolve% some% of%
their% current% meat% processing% hurdles% and% result% in% increased% production% and% herd% size,% a%
greater%number%of%animals% finished% locally% instead%of%being%shipped%to% the%mainland,%and%the%
production%of%specialty,%natural%products,%for%which%there%is%clear%and%growing%market%demand.%
An%MSU%would%also%help%enhance%the%island’s%food%selfesufficiency%(especially%for%crucial%protein%
sources),%while%helping%to%increase%small%ranchers’%profits.%Over%time,%it%may%also%be%expected%to%
promote%greater%diversity%and% resilience%across% the%meat%production%environment%and%better%
utilization%of%the%Island’s%natural%grazing%resources.%
8%
I.!Introduction!!Hawai‘i% Island%has% a% long%history% of% ranching% and% tremendous% resources,% both%natural%
and% human;% yet% local%meat% production% is% severely% constrained% by% limited% access% to% federally%
certified%processing% facilities%–%which%are% legally% required% for% all% commercially% sold%meat.% The%
island’s% two% existing% USDA% inspected% slaughterhouses% predominantly% service% large% ranchers,%
who%can%supply%the%high%volume%needed%to%maximize%efficiencies,%while%smaller%producers%(who%
compose%the%majority%of%those%on%island)%must%wait%for%schedule%availability%(often%as%much%as%
2e6% months)% to% use% them% or% resort% to% other% nonecertified/inspected% processing% methods.%
Moreover,%both%slaughterhouses,%Hawai‘i+Beef+Producers%(HBP)%in%Pa`auilo%and%Kulana+Foods%in%
Waiakea,% face% significant% constraints% in% expanding% their% operations,% including% the% limited%
capacity% for%waste%water% treatment% and% offal% processing% (Melrose% and%Delparte,% 2012);% both%
facilities%also%face%aging%infrastructure,%with%limited%refrigeration%space%for%carcass%storage%and%
aging,% and%a% shortage%of%qualified%butchers.1% Several% informal,%privately%owned% slaughter%and%
chilling% operations% also% exist% around% the% island,% but% these% are% not% federally% certified% and% not%
approved% to% handle% meat% for% commercial% sale;% such% facilities% tend% to% be% utilized% by% small%
ranchers%for%home%use%or%distribution%within%their%community%(Ibid).%%
As% a% result% of% the% current%meateprocessing%bottleneck,%many% island% ranchers%have% left%
the%industry%over%time,%while%others%now%sell%their%calves%to%mainland%finishing%lots.%Once%on%the%
mainland,% such% animals% are% grown% to% maturity,% slaughtered% and% the% meat% shipped% back% to%
Hawai‘i%at%a%lower%quality%and%higher%cost%than%if%it%were%finished%and%processed%locally.%While%
Hawai‘i’s% relatively% high% cost% of% feed% and% water% exacerbate% the% challenges% for% local% meat%
producers,%the%economic%and%logistical%hurdles%of%ranching%are%not%unique.%Across%the%country,%
the%dominance%of%industrial,%nationalescale%meat%production%over%the%last%50%years%has%made%it%
virtually% impossible%for%smaller%producers%to%compete%on%price.%At%the%same%time,%many%small%
and%mediumescale%operations%have%lost%their%access%to%USDA%inspected%slaughter%facilities,%due%
to% consolidation% in% the%meat% processing% industry.% Between% 1990% and% 2007,% nearly% 500%USDA%
certified%slaughtering%plants%in%the%US%were%closed%(USDA%Census,%2007).%In%Hawai‘i%State,%that%
number%dropped% from%12% to%4% slaughterhouses%across% the% islands%over% the% same% time%period%
1%Personal%communication%with%CTAHR%Extension%Agent,%Michael%DuPonteDuPontee,%March%24,%2014.%
9%
(Stevenson%and%Fukumoto,%2011).%%For%consumers,%these%trends%have%resulted%in%a%decline%in%the%
quality% and% freshness% of% commerciallyeavailable% meat,% contributing% to% the% recent% growth% in%
consumer%demand% for% local,%natural%and%organic%meats% (Martinez%et%al,%2010).%Across%Hawai‘i%
State,% local%meat%demand%from%residents,%chefs%and%tourists%has% increased%significantly% in% just%
the%past%few%years,%opening%new%market%opportunities%for%local%producers.%%
In% response% to% this% set% of% challenges% and% possibilities,% a% growing% number% of% Hawai‘i%
Island%ranchers,%community%development%organizations,%and%politicians%have%called%for%a%Mobile+
Slaughter+ Unit% (MSU)% –% a% model% that% has% proven% successful% in% delivering% convenient,% USDA%
certified%slaughter%services% in%dispersed%rural% regions%elsewhere.%Over% the%past%decade,%MSUs%
have%gained%popularity%on%the%US%mainland%because%they%are%typically% less%expensive%to%build%
than%stationary%facilities%and%their%mobile%infrastructure%allows%for%one%or%nearefarm%slaughter%–%
which% many% consider% more% humane% and% less% expensive% than% trucking% animals% to% faraway%
slaughterhouses.% There% are% approximately% 20%MSUs% in%operation% around% the%US% today,%many%
managed% by% producereowned% cooperatives,% formed% specifically% for% the% purpose% of% providing%
slaughter%services%by%and%for%area%farmers.%%
It% is% anticipated% that% having% an%MSU% on% Hawai‘i% Island%would% help%meet% the% growing%
consumer%demand%for%local%meat%and%enhance%the%island’s%food%selfesufficiency%(particularly%for%
crucial% protein% sources),% while% addressing% some% of% the% major% obstacles% facing% local% meat%
producers%and%thus%increasing%small%ranchers’%profits.%Over%time,%it%is%also%expected%to%increase%
oneisland%meat%production,%promote%greater%diversity%and%resilience%across%the%meat%production%
environment%and%better%utilization%of%the%Island’s%natural%grazing%resources.%The%MSU%would%be%
envisioned%to%work%in%partnership%with%current%slaughter%facilities,%as%part%of%a%sustainable%meat%
packing%solution%for%the%island.%Its%target%users%include%small%and%medium%scale%ranchers%raising%
beef,%sheep,%goat%and%pork,%who%may%not%presently%have%reliable%and%regular%access%to%existing,%
certified%processing%facilities.%Conservation%groups%and%hunters%may%also%be%interested%in%using%
the%MSU%to%process%feral%animals%so%this%meat%can%access%commercial%markets,%as%well%–%as%long%
as%such%animals%can%be%confined%for%anteemortem%inspection%by%a%USDA%inspector%(required%for%
all%meat%sold%commercially).%%%
10%
To%assess%whether%a%Hawai‘i%Island%MSU%is%financially%and%technically%viable,%three%local%
organizations% have%worked%with% producers% to% conduct% the% present% feasibility% study% –% the% Big%
Island%Resource%Conservation%&%Development%Council,%the%Hawai‘i%Small%Business%Development%
Center,% and% the% Kohala% Center.% This% study% is% organized% into% six% main% sections:% a% Livestock%
Producer% Interest%Assessment% (section% II),% a%Market%Analysis% (section% III),% Technical% Feasibility%
issues% (section% IV),% Auxiliary% Considerations% including% a% chill,% cut/wrap% and% retail% facility% and%
docking% site% locations% (section% V),% Financial% Feasibility% (section% VI),% and% Ownership% and%
Organizational% Structures% (section%VII).% Finally,% the% results% are% summarized% in% a% Summary%and%
Recommendations%section%(section%VIII).%%%
The% Livestock% Producer% Interest% Assessment% begins% with% an% industry% overview% and%
presents%primary%data%from%surveys%and%focus%group%discussions%with%ranchers%around%Hawai‘i%
Island;% it% includes% information% such% as% potential% MSU% usereship,% throughput% estimates,% and%
producers’%willingness% to%make% financial% commitments.%The%detailed%Market%Analysis% includes%
consumer% data% from% surveys% as% well% as% census% reports,% independent% consumer% reports% and%
recent% news% articles;% consumer% groups% surveyed% include% restaurants% and% supermarkets% on%
island%as%well% as% retail% customers% statewide.% Technical% Feasibility% issues% include%all% regulatory%
and%compliance%requirements%set%forth%by%federal,%state%and%county/local%agencies.%The%section%
on% Auxiliary% Considerations% explores% options% for% a% USDA% inspected% chill,% cut/wrap% and% retail%
facility% –% necessary% to% prepare% the% meat% for% market,% as% well% as% docking% site% locations% and%
preparation%requirements%–%also%a%necessary%part%of%MSU%operations.%The%Financial%Feasibility%
section% uses% projected% production% volumes,% operating% costs,% and% sales% revenues% from% the%
production%assessment%and%market%analysis%to%compute%profit%projections,%operating%budgets,%
and%the%startup%capital%required.%Last,%we%explore%options%for%the%Ownership%and%Organizational%
Structure%of%the%MSU,%and%make%recommendations%based%on%the%Hawai‘i%Island%context.%%
!
11%
II.!Livestock!Producer!Interest!Assessment!
Industry%Overview%%
The%four%animal%species%targeted%for%the%proposed%Hawai‘i%Island%MSU%are%cattle,%sheep,%
goat%and%pig.%According% to% the%National%Agricultural% Statistics% Service% (NASS),% in%2012%Hawai‘i%
State%saw%the%commercial% slaughter%of%11,600%head%of%cattle,%700%head%of% sheep,%and%14,200%
head%of% hogs2.+ Local% commercial% beef% slaughter%was% fairly% steady%over% course%of% the% year,% at%
800e1000% head/month% across% the% State.% Onefarm% slaughter% reported% (not% USDA% certified)%
comprised%an%additional%1,000%head%of%cattle%and%2,500%head%of%hogs.%Stateelevel%data%for%sheep%
and%goats%were%not%available.%%
On%Hawai‘i% Island,% the%most% recent%Census% (2010)% reports% the% total% inventory%of% cattle%
farms%at%680,%up%from%336%in%2002,%with%the%majority%under%9%head.%The%total%number%of%cows%
was%108,093,%down%slightly%from%2002%figures.%While%beef%cattle%is%still%Hawai‘i%Island’s%(and%the%
State’s)%most%profitable%livestock%sector,%it%has%declined%steadily%since%the%1970s%–%together%with%
the% number% of% federally% certified% slaughter% and% processing% facilities% (HASS,% 2003;% ESS,% 2998;%
DBEDT,% 2002).% Between% 1986% and% 2003,% State% ranchers’% share% of% the% local% beef% market%
decreased% from% 30%% to% 10%,% because% local% producers% could% not% compete% on% price% with%
imported,% grainefinished%mainland% beef% due% primarily% to% high% input% costs% (Cox% and% Bredhoff,%
2003).%The%highest%operating%expense% for%Hawai‘i% ranchers% is% feed,%as% there% is%no%commercial%
feed%production%in%the%State%and%shipping%feed%from%the%mainland%more%than%doubles%its%price.%
Further% increases% in% ranch% operating% costs% have% been% attributed% to% prolonged% drought%
conditions,%leading%to%reduced%forage%in%many%pastures%and%forcing%some%ranchers%to%decrease%
their%herd%size%(NASS%Hawai‘i%Farm%Facts,%2013).%Development%pressures%have%also%bid%up%land%
prices%and%drawn%agriculture%lands%into%commercial%and%residential%use,%pushing%many%ranchers%
to%gradually%reduce%their%number%of%cattle%(Cox%and%Bredhoff,%2003).%%
Today,% about% three% quarters% of% all% cattle% raised% on% Hawai‘i% Island% are% exported% to%
mainland%feedlots,%as%it%is%more%expensive%to%ship%grain%to%Hawai‘i%than%it%is%to%ship%young%cattle%
to% the% mainland.% Total% cattle% sales% in% 2012% were% down% 14%% from% the% previous% year,% with%
mainland%exports%accounting%for%73%%of%total%revenues%(NASS%Hawai‘i%Farm%Facts,%2013).%%Large%
2%Stateelevel%data%for%goats%were%not%available.%
12%
producers,%in%particular,%tend%to%prefer%exporting%cattle%because%of%the%consistent%higher%prices%
that%can%be%obtained%on%the%mainland.%In%2003,%the%local%price%for%cattle%under%40%months%was%
around% 90cents/lb% dressed% weight3,% which% was% not% competitive% with% exporting% (Cox% and%
Bredhoff,%2003).%More%recently,%the%local%price%for%prime%choice%cattle%has%increased%to%$1.49/lb%
dressed% weight% –% still% not% competitive% with%mainland% prices,% which% have% reached% as% high% as%
$2.50/lb% live% weight,% or% more% than% $4/lb% dressed% weight% (given% that% State% average% dressed%
weight% for% cattle% is% 59e63%% of% the% live% weight).4% Even% weaner% cattle% under% 12% months%
(approximately%500%pounds)% can% sell% for% as%high%as%$1.40/lb% live%weight% to%mainland% finishing%
lots.5%%Thus,%many%large%producers%have%become%efficient%cowecalf%operations,%with%the%primary%
objective%of%selling%weaned%animals.%This%means%the%main%animals%slaughtered%and%sold%locally%
from%this%producer%group%consist%of%cull%cows%too%large%to%be%shipped%(Cox%and%Bredhoff,%2003).%
According%to%a%study%conducted%by%CTAHR%(2003),%the%number%of%cull%cows%on%Hawai‘i%Island%is%
high% enough% to% ensure% that% its% two% slaughter% facilities% have% sufficient% numbers% to% remain% in%
operation.%
Smaller+Hawai‘i%Island%beef%producers,%meanwhile,%are%generally%more%willing%to%accept%
the%relatively%lower%prices%offered%locally%for%cattle%and%may%have%more%flexibility%when%it%comes%
to%pasture%feeding%their%animals%after%they%are%weaned%(Cox%and%Bredhoff,%2003).%According%to%a%
study% published% in% 2012,%Hawai‘i% Island’s% cattle% industry% as% a%whole% is% looking% to% expand% the%
amount% of% grassefed% beef% raised% and% finished% locally% and% made% available% in% the% local%
marketplace% (Melrose% and%Delparte,% 2012).% This% business% strategy% is% already%proving% itself% on%
Maui,% where% that% island’s% five% largest% ranches% have% partnered% to% create% the% Maui+ Cattle+
Company6,% which% sells% exclusively% local,% grassefed% beef% and% lamb% –% with% operations% at% full%
capacity;%this%company%even%purchases% its%seed%stock%from%Olumau%Angus%Plus,%LLC%on%Kaua‘i,%
which%has%developed%a%breed%that%thrives% in%Hawai‘i’s% tropical%grazing%conditions.% %On%Hawai‘i%
3%Dressed%weight%refers%to%the%weight%of%an%animal%after%being%partially%butchered,%removing%all%the%internal%organs%
and%oftentimes%the%head%as%well%as%inedible%or%less%desirable%portions%of%the%tail%and%legs.%It%is%usually%a%fraction%of%
the%total%weight%of%the%animal,%and%an%average%of%59%%of%the%original%weight%for%cattle.%(Dressing%Percentage%of%
Slaughtered%Cattle.%www.thebeefsite.com.%Accessed%March%25,%2014.)%4%Personal%communication%with%CTAHR%Extension%Agent,%Michael%DuPonteDuPontee.%March%24,%2014.%%
5%Personal%communication%with%Richard%Russell,%owner%Kumau%Ranch%in%North%Kohala,%March%15,%2014. 6%Haleakala%Ranch,%Ulupalakua%Ranch,%Nobriga%Ranch,%Kaupo%Ranch%and%Hana%Ranch%
(http://www.mauicattlecompany.com/?page_id=140,%accessed%03/20/2014).%%
13%
Island,% the% local% meat% initiative% has% been% pursued% on% a% small% scale% by% several% ranches% and%
retailers,% perhaps% most% notably% by% Kuahiwi% Ranch% in% Ka‘u% and% KTA’s% Mountain% Apple% Brand%
(Melrose%and%Delparte,%2012).%More%recently,% in%Spring%2014,%Parker%Ranch% (the% largest%cattle%
producer% in% the% State)% and%Ulupono% Initiative,% a% private% social% investment% firm,% launched% the%
Paniolo%Cattle%Company,%a% joint%venture%aimed%at%statewide% local%grassefed%beef%production%–%
starting%with%1,400%head.%This%joint%venture%follows%successful%grassefed%beef%trials%in%2012%and%
2013.%%%%
Today,% Hawai‘i% Island% grows% and% markets% more% than% twice% the% amount% of% beef%
consumed%on%island%each%year,%but%only%about%17%%of%the%island’s%beef%consumption%is%supplied%
locally%(Melrose%and%Delparte,%2012).%The%island%%supplies%even%less%of%its%own%pork,%sheep%and%
goat%–%under%5%,%according%to%Melrose%and%Delparte%(2012).%The%vast%majority%of%pork%currently%
comes% from% the% mainland,% much% of% it% frozen.% Only% Kulana% Foods% in% Waiakea% offers% USDAe
certified%slaughtering%services%for%pigs,%sheep%and%goats,%as%a%service%to%small%producers;%most%of%
that% is% used% for% private% home% consumption% –% rarely% available% in% retail% stores.% Melrose% and%
Delparte% (2012)% also% reported% that% recent% innovations% in% piggery% management% could% help%
Hawai‘i%Island%become%a%larger%supplier%of%its%own%pork%demand.%One%piggery%in%Mountain%View%
(partially%funded%by%the%Hawai‘i%County%Department%of%Research%&%Development)%employs%the%
Korean%Natural%Farming%approach%to%its%design%and%operations,%with%indigenous%microorganisms%
used% to%break%down%waste%naturally.%The%University%of%Hawai‘i%College%of%Tropical%Agriculture%
and% Human% Resources% (CTAHR)% also% promotes% several% piggery% designs% with% cost% efficient%
systems%for%the%disposal%and%reuse%of%pig%waste%and%washedown%fluids%(Ibid).%The%2010%Census%
reports%the%number%of%hog%and%pig%farms%on%Hawai‘i% Island%at%70,%most%under%24%head,%with%a%
total% inventory% of% 1,350% hogs/pigs.% Those% employing% natural% farming% techniques% currently%
number%31,%according% to%CTAHR%extension%agent%Michael%DuPonte.7% %A% rising%market% trend% in%
the%local%piggery%sector%is%the%sale%of%young%pigs,%30e40%pounds,%which%currently%price%as%high%as%
$125% each.8% % As% with% Hawai‘i% Island’s% beef% industry,% recent% hog% production% figures% show% an%
increase%in%the%number%of%hog%and%pig%farms%since%2002%(55),%but%a%considerable%decrease%in%the%
7%Personal%communication,%March%24%2014.%%
8%Ibid.%
14%
total%number%of%animals%raised%(2,329),%with%a%corresponding%decrease%in%the%number%of%animals%
raised%per%farm.%%
Meanwhile,% Hawai‘i% Island% meat% goat% producers% totaled% 128% in% 2007,% with% a% total%
inventory%of%2,675%(USDA%Census,%2007).%Many%ranches%raise%goats%as%both%a%source%of%income%
and/or% food% as%well% as% to% assist% in% clearing% invasive% shrubs.%Goat%meat% is% popular%with% some%
ethnic% groups% but% not% currently% commercially% available.% Nevertheless,% Melrose% and% Delparte%
(2012)% found% that% opportunities% for% direct% sales% of% goat% meat% on% Hawai‘i% Island% may% be%
expanded.% There% are% several% commercial% sheep% ranches% around%Hawai‘i% Island,% as%well% –% the%
largest%being%Kahua%Ranch% in%North%Kohala.% Kahua%has% its% sheep% slaughtered% locally% and% sells%
lamb%direct%from%the%ranch%to%retail%customers%and%island%restaurants.%Smaller%sheep%producers%
have%reported%difficulty%getting%their%animals%to%harvest%at%an%affordable%price,%and%herd%sizes%
are%likely%to%remain%small%until%this%bottleneck%is%addressed%(Ibid).%%
Overall,%this%data%shows%that%there%has%been%a%recent%increase%in%the%number%of%smalle
scale%meat%producers%on%Hawai‘i%Island,%each%raising%fewer%animals%than%past%industry%averages.%
Still,%Hawai‘i%Island’s%livestock%sector%remains%the%most%lucrative%of%any%county%in%the%State,%with%
a%total%market%value%approaching%$50%billion% in%2012%(USDAeNASS,%2013).%Cattle/calves%valued%
$30%billion%in%2012%(first%in%the%State),%sheep%and%goats%valued%$370,000%(second%in%State),%and%
hogs%and%pigs%valued%$137,000%(fourth%in%State)%(Ibid).%%
In% addition% to% commercial% meat% production,% Hawai‘i% Island% hunters% slaughter% nearly%
10,000% feral% pigs,% sheep%and%goats% annually% (Melrose%and%Delparte,% 2012).% This% represents% at%
least%400,000%pounds%of%meat%per%year,%and%probably%more,%due%to%underereporting.%Feral%pigs,%
sheep%and%goats%comprise% the% largest%portion%of% the%wild%meat% supply,% though% there%are%also%
feral% cattle.% Conservation% efforts% have% also% led% to% increased% eradication% of% invasive% game%
species,%such%as%mouflon%sheep%on%Mauna%Kea.%While%most%wild%meat%is%currently%kept%for%home%
use,%there%is%a%modest%commercial%demand%for%it,%especially%wild%pork%–%which%appears%on%some%
resort%restaurant%menus%and%in%KTA%stores.%Wild%meat%sold%commercially%must%be%captured%live%
and%brought%to%a%certified%slaughterhouse%for%an%anteEmortem%inspection%(before%the%animal%is%
killed)%or% receive% the%anteemortem% inspection% in% the% field,%be%killed%and% then%be%brought% to%a%
USDA%certified%slaughterhouse%within%3%hours.%%
15%
Producer%Survey%++A% survey% of% livestock% producers% around% Hawai‘i% Island% was% conducted% between%
September%2011%and%September%2014.%Preliminary%data%was%gathered%at%the%Taste%of%the%Range%
event%in%2011%and%at%the%Hawai‘i%Sheep%and%Goat%Association’s+2012%annual%meeting,%and%used%
to% inform% development% of% the% final% survey% instrument,% administered% at% three% islandewide%
producer%meetings% in% July%and%September%2014% (in%Waimea,%Na‘alehu%and%Hilo,% respectively).%
The%final%survey%is%composed%of%three%sections.%The%first%section%collected%information%about%the%
respondent’s% livestock%operation,% such% as% its% location% and% acreage.% The% second% section% asked%
questions% relating% to% the% operation’s% current% production% and% marketing% methods,% including%
annual%livestock%production,%calving%seasons%and%marketing%techniques.%The%final%section%sought%
to%determine%respondent’s%interest%in%the%potential%MSU,%asking%questions%about%the%functions%
the% respondent% would% like% the% unit% to% perform,% how% the% unit%might% affect% the% respondent’s%
production,%and%whether%the%respondent%would%be%interested%in%investing%in%the%unit.%A%copy%of%
the%producer%survey,%adapted%from%Curtis%et%al.%(2007),%can%be%found%in%Appendix%A.%%
Preliminary+Results++Reponses+from+27+producers+surveyed+at+the+Hawai‘i+Sheep+and+Goat+Association’s+2012+annual+
meeting+are+summarized+in+the+table+below.++
Current!processing!methods!used%
Home+ 33%+
Kulana+ 48%+
Hawai‘i%%Beef%Producers+(processes%cattle%only)+ 4%+
Production!volumes! %
Current%production% 18%animals%average%per%farm%(478%total)+
Anticipated%production%within%3%years% 67%animals%average%per%farm%(1,808%total)+
Satisfaction!with!current!meat!processing!options!on!Hawai‘i!Island! !
No% 67%+
Yes% 15%%+
Interest!in!using!an!MSU!if!one!were!available+
Yes% 78%%+
16%
Depends%on%price% 22%%
No% 0%%+
MSU!operating!location!preference! +
At%ranch% 19%%+
Nearby% 56%%+
Either%at%ranch%or%nearby% 22%+
Animal!species!that!would!be!processed!with!an!MSU!%
Pig% 48%+
Sheep% 70%+
Goat% 41%+
Rabbit% 30%+
Chicken% 52%+
Marketing!method!preferred!+
Direct%sale%to%consumers! 22%%+
Wholesale! 19%%+
Depends%on%wholesale%price! 7%%+
Both%wholesale%and%retail%(direct)%sale%! 56%%%
+
When% asked% how%much% or% through%what% structure% they%would% like% to% pay% to% use% the%
MSU’s% services,%most% producers%were% not% able% to% provide% specific% answers.% 44%% stated% they%
would%prefer%paying%a% flat% rate%per%head,%while%19%%preferred%to%pay%by%Hot%Carcass%Weight9%
(per% lb);% nearly% half% (48%)% said% they%would%want% the%MSU% to% be% price% competitive% or% slightly%
lower% than% current% prices% offered% by% the% two% existing% slaughterhouses.% When% asked% if% they%
would%be%interested%in%participating%in%further%discussions%about%an%MSU,%78%%of%producers%said%
yes,%15%%replied%maybe,%and%7%%(two%producers)%said%no.%%
%
9%Hot%Carcass%Weight,%or%HCW,%is%a%common%unit%of%measurement%used%to%price%meat%slaughter%and%processing%
services;%HCW%refers%to%the%“hot”%or%unechilled%weight%of%the%carcass%after%slaughter%and%removal%of%the%head,%hide,%
intestinal%tract,%and%internal%organs%(Knight,%2013).%The%HCW%is%also%used%to%determine%yield%grade%and%dressing%
percentage%(i.e.%percentage%of%the%live%animal%that%ends%up%as%carcass).%%
17%
An+earlier,+ exploratory+ version+of+ the+ survey+was+ conducted+verbally+at+ Taste+of+ the+Range+ in+
2011.+Responses+from+four+producers+are+summarized+below:++
• Current!processing!methods!used!(not!mutually!exclusive):%one%producer%processed%at%
home%and%at%HBP,%one%processed%exclusively%at%HBP,%two%processed%at%Kulana,%and%one%
ships%its%meat%to%O‘ahu%for%processing%(HCPC)!
• Volume:!Producers%harvested%an%average%of%178%animals%per%year,% ranging% from%20% to%
520%animals%per%year.%!
• Satisfaction! with! current! situation:!None% of% the% producers% were% satisfied% with% their%
current%harvesting%method(s).%%!
• Interest! in! MSU:! 75%% of% the% producers% were% interested% in% an% MSU,% and% 25%% (1%
producer)%was%interested%only%if%the%price%was%competitive%with%current%options.%%
• MSU!location!preferences:!One%producer%wants%the%MSU%to%come%to%his%ranch%and%all%
others%were%ok%with%meeting%the%MSU%at%a%nearby%location.%%
• MSU! species! desired! (not! mutually! exclusive):% Two% producers% were% interested% in%
harvesting% sheep%and%pigs% in%addition% to%cattle;% the%other% two%were%only% interested% in%
harvesting%cattle.%
• Price:% One% producer% preferred% to% pay% a% flat% rate% of% $75e100/cow;% two% producers%
preferred%paying%by%Hot%Carcass%Weight%at%65e75%cents%per%pound%for%sheep%and%$1e1.35%
per%pound%for%beef;%one%producer%did%not%know%how%to%answer%the%question.%!%
!
During+exploratory+producer+surveying,+the+following+additional+themes+emerged:+
• Currently,% producers% have% to% buy% back% their% animals’% tongue,% tail,% organs% and% skirt%
because%existing%island%processors%use%these%parts%as%“drop%credit”%against%their%cost%of%
slaughter;%(some)%producers%would%prefer%not%to%have%to%"buy"%back%these%animal%parts.%%
• Producers%are%interested%in%certified%kosher/halal%slaughter.%%
%
Detailed+Survey+Results+Three% islandewide% producer% meetings% were% organized% in% July% and% September% 2014% in%
Waimea,%Na‘alehu,%and%Hilo,%respectively.%These%meetings%were%intended%to%introduce%the%MSU%
18%
concept% to% a% larger% audience% of% producers% than% had%been% involved% previously,% and% to% collect%
producer%input%on%the%project%regarding%potential%usereship%and%throughput%volumes%to%assess%
the%project’s%viability.%The%three%locations%were%selected%to%represent%different%geographic%areas%
making% it% feasible% for% all% interested% producers% to% attend% and% also% because% of% their% relative%
concentration%of%ranch%operations.%%
A%total%of%60%people%attended%the%three%meetings,%35%in%Waimea,%11%in%Na‘alehu,%and%14%
in%Hilo% (including% two% return% participants% from% the%Waimea%meeting).% A% total% of% 43% producer%
operations% were% represented% and% 35% producer% surveys% were% completed,% for% a% producer%
response%rate%of%81.4%.%Producers%from%all%regions%of%the%island%were%represented%in%the%survey,%
with%the%largest%groups%from%Puna%(17%,%or%6%operations),%and%Hamakua,%Ka‘u,%North%Kona%and%
South%Kona%–%each%with%5%operations% (14%).%Four%producers% from%North%Kohala%responded%to%
the%survey%(11%),%three%from%South%Kohala%(9%),%and%two%each%from%North%Hilo%and%South%Hilo.%%
The%total%ranch%acreage%represented%in%the%producer%survey%was%37,041%acres,%with%an%
average%operation%size%of%1,089.4%acres,% though%80%%of%respondents%operated%ranches%of%500%
acres%or% less.%Over%70%%of%producers% said% they%plan% to% increase%production% in% the%next% three%
years.%When% asked% if% they%were% satisfied%with% current% slaughter% conditions,% 77%% said% no% (27%
producers),%and%91%%(33%producers)%said%they%would%be%interested%in%using%an%MSU%if%one%were%
available% on% the% island.% In% an% openeended% question% asking% producers% to% describe% the% impact%
they% anticipate% an%MSU%would% have% on% their% operation,% 46%% (16% producers)% said% they%would%
increase%production/herd%size,%40%%(14%producers)%said%they%would%finish%more%animals%locally%
and% reduce% weaneoff% shipping,% and% 20%% (7% producers)% said% they% would% produce% a% specialty,%
grassefed% natural% product.%When% asked% if% they%would%make% a% personal% investment% through% a%
producer% cooperative% or% similar% entity% in% the% MSU,% 69%% said% yes% (24% producers),% 23%% said%
maybe% (8% producers),% and% only% 3% producers% said% no% or% did% not% answer.% Total% investments%
committed%range%from%$40,750%at%a%low%estimate%to%$63,500.%%
When%asked%if%they%would%be%interested%in%participating%in%further%discussions%about%the%
MSU,%94%%(33%producers)%said%yes%and%two%producers%said%maybe;%none%said%no.%When%asked%if%
they%would%be%interested%in%serving%on%a%producer%steering%committee%to%help%guide%future%MSU%
decisions% and% developments,% 77%% (27% producers)% said% yes% or%maybe.% A% recurring% theme% that%
19%
was%not%captured%in%the%survey%but%that%emerged%through%meeting%discussions%and%producers’%
written% comments,% was% the% desire% of% multiple% producers% to% not% participate% in% federally%
inspected% slaughter% as% they% prefer% marketing% their% meat% through% a% Community% Support%
Agriculture%(CSA)%procurement%method%or%informally,%to%family,%neighbors%and%friends.%Many%of%
these%producers%are%very%interested%in%utilizing%the%MSU,%as%they%currently%lack%facilities%that%are%
accessible%and%convenient%or%that%fit%their%definition%of%humane%slaughter.%%The%following%table%
provides%a%detailed%summary%of%the%producer%survey%responses.%
Table!1.!Producer!Survey!Highlights!
Animal!species!represented! !Cattle%% 71%%(25%producers)%%
Sheep%% 54%%(19%producers)%
Goat%% 29%%(10%producers)%
Pig%% 17%%(6%producers)%
Multiple+species+operation++ 43%+(15+producers)+Current!marketing!methods!used!for!cattle!Weaneoffs%sold%to%mainland% 48%,%representing%3,268%cows%%
Locally%processed%and%marketed% 44%,%representing%141%cows%%
Local!processing!facilities!used!for!all!species!!Kulana,%Hilo% 29%%(10%producers)%
Hawai‘i%Beef%Producers%(HBP),%Paauillo% 14%%(5%producers)%
Home% 60%%(21%producers)%
Local!marketing!methods!used!for!all!species!Wholesale% 14%%(5%producers)%
Restaurant%sale% 14%%(5%producers)%
Farmers%market% 20%%(7%producers)%
Word%of%mouth% 51%%(18%producers)%
Other%form%of%direct%marketing%(i.e.%farm%stand)% 8.5%%(3%producers)%
Local!slaughter!preferences! !Satisfied%with%current%options% 77%!–!No!(27!producers)!
23%%–%Yes%(8%producers)%
Would%utilize%MSU%if%available% 91.4%!–!Yes!(33!producers)!8.6%%–%Don’t%Know%(3%producers)%
0%%–%No%
Animals!that!would!be!processed!by!MSU!per!year!Cattle% 399%head%%
Sheep% 488%head%%
Goat% 695%head%%
Pig% 207%head%%
20%
%
Preferred!MSU!operating!location!Ranch% 20%%(7%producers)%
Nearby%% 26%%(9%producers)%%
Either%% 51%%(18%producers)%
Services!desired!from!producer!cooperative!organization!Slaughter% 91%%(32%producers)%
Chill,%cut/wrap% 86%%30%producers)%
Marketing%and%sales% 54%%(19%producers)%
Purchasing%feed% 31%%(11%producers)%
Cattle+operations+as+percent+of+those+requesting+feed++
82%+(9+producers)+
Impact!expected!from!having!MSU!on!Hawai‘i!Island!Would%finish%more%animals%locally%and%reduce%
weaneoff%shipping%%
40%%(14%producers)%
Would%increase%production/herd%size% 46%%(16%producers)%
Would%produce%specialty,%grassefed%natural%product% 20%%(7%producers)%
Willingness!to!invest!in!MSU!Yes% 69%!(24!producers)!Maybe% 23%%(8%producers)%
No% 8.5%%(3%producers)%
Total!investment!committed!! $40,750!to!$63,500!(24!producers)!
21%
III.!Market!Analysis!!
Current%and%Potential%Livestock%Markets%%
While%red%meat%consumption%across%the%US%has%generally%decreased%since%the%1970s%(US%
Census,% 2012),% demand% for% all% meats% produced% locally% has% actually% increased% nationwide% –%
including% in%Hawai‘i% State% (Stevenson%and%Fukumoto,%2011).% This% trend% is% attributed% to%public%
concern% over% food% safety% and% quality% as% well% as% criticism% of% the% global/industrial% food% chain%
(Wolfe% et% al.,% 2009).% The%USDA% (2010)% recently% reported% that% purchase% of% local% foods% is% now%
widespread%and%consumers’%willingness%to%pay%a%premium%for%it%no%longer%limited%to%those%with%
higher%incomes,%as%was%previously%found%in%the%1980se1990s%(KeelingeBond%et%al.,%2009;%Zepeda%
and% Li,% 2006).% Instead,% local% food% purchasing% appears% more% strongly% related% to% consumers’%
prioritization%of%quality,%nutrition,%the%environment%and%helping%farmers%in%their%State%(i.e.%local%
economic% development)% (Martinez% et% al.,% 2010).% American% consumers’% willingness% to% pay% a%
premium%for%local%food%ranges%from%9e50%%in%different%regions%of%the%country%and%for%different%
products,%with%the%most%common%drivers%being%freshness%(82%),%support%for%the%local%economy%
(75%),%and%knowing%the%source%of%the%product%(58%)%(Food%Marketing%Institute,%2009).%%
In% Hawai‘i,% a% “Local% Food% Market% Demand% Study% of% O‘ahu% Shoppers”% (2011),%
commissioned%by% the%Ulupono% Initiative,% found% that%74%%of% local% consumers%believe% that% it% is%
very% important% that%Hawai‘i% grow% its% own% food,% and% are%willing% to%pay%up% to% $2.13%more%per%
pound% for% local% ribeeye% steak% compared% to%mainland% brands.% The% study% also% reported% broad%
consensus% for% support% of% local% foods% across% all% demographic% groups% surveyed.% An% additional%
driver% behind% the% local% food% movement% in% Hawai‘i% appears% to% be% public% concern% over% food%
security%(DBEDT,%2012).%Located%over%2500%miles%from%the%US%mainland,%about%90%%of%Hawai‘i’s%
food% is% imported,%which%makes% it% especially% vulnerable% to%natural% disasters% and%global% events%
that%might%disrupt%shipping%supplies%(Ibid).%%
The%Hawai‘i% Island%County%Civil%Defense%estimates% that% there% is% between%one% to% three%
weeks%of%food%stored%on%the%island%at%any%time%(Melrose%and%Delparte,%2012).%While%the%island%is%
selfesufficient% in% some% vegetable% and% fruit% crops,% it% has% become%decreasingly% selfesufficient% in%
livestock%production%(Ibid).% In%response,%government%agencies%at%both%County%and%State% levels%
are%actively%encouraging%increased%local%food%demand%and%supply,%expanding%the%“Buy%Local/It%
22%
Matters”% marketing% campaign% as% well% as% other% branding% and% labeling% programs% (i.e.% Hawai‘i%
Department%of%Agriculture’s%“Hawai‘i%Seals%of%Quality”%program).%In%the%Governor’s%2009%State%
of%the%State%address,%Linda%Lingle%called%for% increased%government%support%and%promotion%for%
local%food%consumption%and%production,%and%set%a%15%%price%preference%for%Hawai‘i%producers%
when%placing%their%bids%for%State%purchases%(Stevenson%and%Fukumoto,%2011).%%
Currently,%Hawai‘i%Island%beef%supplies%only%about%17%%of%the%island’s%demand,%and%pork,%
sheep,% and% goat% less% than% 5%% (Melrose% and% Delparte,% 2012).% While% the% island% consumes%
approximately% 24%million%pounds%of% red%meat% annually% (based%on%national% food% consumption%
models%and%a%de%facto%island%population%of%about%210,00010)%or%an%equivalent%of%28,373%head%of%
cattle11,%this%represents%only%about%half%the%amount%sold%or%slaughtered%on%the%island%in%2009.%
Thus,% there% is% tremendous%opportunity% for%Hawai‘i% Island% to%meet% its%own% red%meat%demand,%
replacing% much% of% what% is% imported% with% local% sources,% while% also% making% significant%
contributions%to%the%rest%of%the%State’s%demand.%%
Another%notable%meat%consumption%trend%(at%the%national%level)%is%increased%consumer%
demand% for% forageefinished% (grassEfed)% and% natural% meats% –% attributed% to% rising% health% and%
environmental% concerns.% Nutritional% analysis% indicates% that% forageefinished%meats% differ% from%
grainefinished% meats,% with% positive% nutritional% characteristics% (Fukumoto,% 1999)% and% distinct%
appearance%and%taste%(Cox%et%al.,%1987).% %As%with%“locallyeproduced”%attributes,% these%positive%
characteristics% can% drive% a% price% premium.%Mainland% studies% have% found% that% forageefinished%
and%natural%meats%sell%in%health%food%stores%at%about%a%20%%premium%over%supermarket%meats%
(Cox%and%Bredhoff,%2003).%In%Hawai‘i,%the%majority%of%local%livestock%is%already%raised%“naturally,”%
with%grass%rather%than%grainebased%diets,%and%thus%fit%into%these%higher%value%market%segments%
(Stevenson%and%Fukumoto,%2011).%There%is%only%one%feedlot%in%the%entire%state,%located%on%Maui,%
since% most% ranchers% cannot% afford% the% high% cost% of% imported% grain.% According% to% CTAHR%
Extension%Agent,%Michael%DuPonte,%Hawai‘i%grassefed%beef%has%gained%a%market%premium%on%the%
mainland%for%its%high%quality%–%with%marbling%levels%(intraemuscular%fat)%in%the%grainefed%range.12%%
10%This%population%count%is%based%on%2010%figures%and%includes%a%resident%population%of%185,000%and%an%average%
daily%visitor%count%of%25,000%(Melrose%and%Delparte,%2012)%11%Based%on%the%average%retail%beef%equivalent%of%450%pounds%per%head.%
12%Personal%communication,%March%24%2014.%%
23%
Within% Hawai‘i% State,% however,% local% meat% does% not% generally% command% a% premium%
price.%An%informal%survey%of%retail%prices%for%Hawai‘i%beef%conducted%by%Cox%and%Bredhoff%(2003)%
found%that%local%meats%are%retailed%in%a%variety%of%ways%in%Hawai‘i:%some%are%sold%at%the%lowest%
price%to%be%competitive%with%imported%brands,%while%others%are%marketed%with%an%emphasis%on%
high%quality%at%a%slightly%higher%price.%Overall,%the%survey%found%average%local%meat%prices%to%be%
comparable% with% average% US% retail% beef% prices.% A% more% recent% exploration% of% Hawai‘i% Island%
meat%prices%conducted%as%part%of%this%feasibility%study%from%AprileMay%2014,%surveyed%five%sales%
outlets% representing% different% types% of%meat% purveyors% around% the% island:% two% large% grocery%
chains,%one%privately%owned% local%market,%and% two% farmers%markets.%Average% retail%prices% for%
local% and% nonelocal% sources% of% four% beef% cuts% available% at% all% locations% were% compared:% beef%
steak,%chuck%roast,%short%ribs,%and%top%sirloin.%As%shown%in%Figure%1,%the%survey%found%that%local%
and%nonelocal%beef%prices%were%comparable%for%each%product,%with%local%cuts%ranging%from%10%+
more%for%steak%to%20%+less%for%short%ribs.%No%significant%premiums%were%observed%for%products%
labeled%as%certified%organic,%grassefed%or%hormone/antibioticefree.%
Figure!1.!Comparison!of!Average!Local!vs.!Nonlocal!Retail!Meat!Prices!at!Selected!Outlets!
$5.50$5.75
$6.25
$7.38
$4.99
$5.68
$7.81 $7.69
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
Steak Chuck roast Short ribs Top sirloin
Product
Price/lb
Local
Nonlocal
Given%the%absence%of%consistent%price%premiums%for% local%and%natural%meats% in%Hawai‘i%
markets,%a%disparity%of%opinions%has%existed%about%the%actual%size%of%Hawai‘i’s%demand%for%such%
products% (Cox% and% Bredhoff,% 2003).% However,% in% a% recent% issue% of% the% local% food% publication,%
24%
Dining+in+Paradise+Magazine,%industry%exerts%reported%clear%growth%in%the%market%for%local%meat%
on%Hawai‘i%Island%over%the%last%two%years%(Nemoto,%2014).%Tom%Asano,%sales%manager%of%Kulana%
Foods%in%Waiakea,%attributed%the%recent%spike%to%“customers+…+starting+to+become+more+aware+
of+what+they+eat.”+KTA%supermarket%buyer,%Jeff%Ikeda,%who%buys%Kulana’s%Hawai‘i+Island+GrassE
Fed+Beef,%described% increasing%popularity% for%Big% Island%beef,%saying%he%has%had%to%double%the%
amount%of%space%on%his%meat%shelves:%“I+used+to+buy+boxes+and+now+I+buy+carcasses”.%According%
to%Mr.%Ikeda,%increased%demand%for%local%meat%is%due%to%customers%becoming%more%conscious%of%
their%health%and%where% their%dollar%goes:%“the+ [Hawai‘ian]+ tradition+of+ local+ food+ in+general+ is+
important+…+ [buying+ local+meat]+keeps+our+money+here+and+helps+ the+ rancher,+ the+stores+and+
everybody+down+the+line.”%These%insights%suggest%that%“locally%grown”%may%be%more%important%
to% Hawai‘i% consumers% than% environmental% or% nutritional% attributes,% though%more% research% is%
needed% to% gain% a% better% understanding% of% local% meat% preferences.% OmniTrak’s% (2011)% O‘ahu%
market% demand% study% found% that% Hawai‘i% consumers% value% quality% (especially% freshness% and%
taste),%trust%local%farmers%to%grow%foods%that%are%safer%to%eat,%and%want%meat%free%of%antibiotics%
or%hormones.%The%study%also%found,%however,%that%consumers%often%have%trouble%distinguishing%
what’s%local%and%what’s%imported%in%Hawai‘i%markets.%%
Considering% the% high% cost% of% production% for% Hawai‘i% meat% producers,% the% marketing%
strategies%generally%used%for%selling%meats%locally%tend%to%be%less%sophisticated%than%those%found%
in%other%parts%of% the% country.% % Cox%and%Bredhoff% (2003)% found% that%Hawai‘i% retail% displays% for%
local% meat% were% typically% not% designed% to% catch% the% eye% and% the% packaging% often% did% not%
advertise%all%the%product%features.%Pointeofeorigin%information,%such%as%the%name%of%the%ranch%or%
processing%facility,%was%generally%included,%and%vacuum%packing%was%used%by%some%vendors.%%
Identifying%Potential%Marketing%Strategies%and%Sales%Outlets%
An% effective% marketing% strategy% needs% to% incorporate% elements% of% price,% place,%
promotion%and%product%to%establish%a%clear%identity%in%the%mind%of%the%customer.%If%consumers%
perceive%Hawai‘ieraised%meat%as%a% superior%alternative% to%mainland%meat,% local%producers%will%
not%be% forced%to%be%price%competitive%with% imported%sources.%Therefore,%while%Hawai‘i%meats%
have% the% potential% to% command% premium%prices% (and% often% do,% on% the%mainland),% there% is% a%
clear%need%to%establish%a%marketing%strategy%that%can%produce%a%competitive%brand.%
25%
Since%the%bulk%of%the%State’s%population%resides%on%O‘ahu,%that%island%is%likely%to%provide%
the%greatest%potential%market%for%local%meat%sales.%However,%O‘ahu%locals%may%not%be%wiling%or%
able%to%pay%a%premium%price,%while%the%visitor%population%–%dispersed%throughout%the%islands%–%
may%be%a%more%likely%consumer%group%to%do%so.%Visitors%are%often%more%discriminating,%as%well,%
requiring% a% more% sophisticated% marketing% approach.% On% Maui,% given% the% large% numbers% of%
health% food% retailers,% that% population% base% of% residents% and% visitors% might% be% a% good% target%
market,%as%well.%Shipping%boxed%beef%between%the% islands%would%require%air%shipping,%but%has%
potential%to%be%financially%viable%and%warrants%further%exploration.%%
On% Hawai‘i% Island,% Cox% and% Bredhoff% (2003)% found% that% meat% producers’% dominant%
marketing%strategy%tends%to%focus%on%merchandising%to%their%target%customer,%with%some%direct%
retail% sales% but%more% commonly%wholesale% to% retailers% and% restaurants.% This% appears% to% be% a%
promising%approach,%as%Hawai‘i%consumers%tend%to%spend%considerably%more%of%their%household%
food%budget%on%meals%purchased%away%from%home%(Melrose%and%Delparte,%2012),%especially%for%
the%25,000%daily%visitors%to%the%island.%Further,%an%increasing%number%of%island%restaurants%have%
tried%hard%over%the%past%decade%to%brand%themselves%as%serving%fresh,%locallyegrown%meats,%and%
Hawai‘i% Island% chefs% now% provide% steady% markets% for% some% of% highest% quality% local% meats%
available% (Ibid).% These% chefs%understand% the% value%of% connecting% their% clientele% to% the% special%
characteristics% of% Hawai‘i’s% fresh,% local% food% supply% –% an% international% phenomenon% often%
referred%to%as%‘farm%to%table’%and%particularly%popular%in%the%world%of%fine%dining.%Several%local%
grocery% retailers% have% also%made% significant% efforts% to% promote% local% foods% and% to%work%with%
producers%to%maintain%a%steady%supply%of%local%products%to%the%marketplace.%KTA%Super%Stores,%
for% instance,% with% its% local% Mountain% Apple% brand,% appears% to% have% discovered% what% many%
mainland%food%service%and%retail%professionals%have%found:%that%local%products%can%be%a%way%to%
add% consumer% appeal% and% a%means% of% differentiation% from% the% competition% (Packaged% Facts,%
2007;%Martinez%et%al.,%2010).%%
The% biggest% challenge% for% Hawai‘i% Island% wholesalers% and% retailers% in% marketing% local,%
forage% finished%meats,% has% historically% been% the% consistency%of% quality% and%quantity% (Cox% and%
Bredhoff,%2003).%The%quality%of%grass%fed%meats%may%be%highly%variable%given%the%range%of%quality%
standards% used% by% local% producers,% while% their% quantity% may% be% variable% due% to% weather%
26%
conditions%and%different%management%approaches.%The%Hawai‘i%Department%of%Agriculture%has%a%
certified% federal% meat% grader,% but% the% hourly% cost% of% these% services% has% been% prohibitive% to%
producers% and% slaughter% facilities% (Cox% and% Bredhoff,% 2003).% One% approach% to% coping% with%
quantity%and%quality%variations%could%be%to%develop%a%processed%product%that%extends%shelf%life%
while% allowing% quality% to% be%more% highly% controlled.% Combining% less% desirable% cuts% from% the%
front%end%of%the%animal%with%other%less%expensive%ingredients%could%allow%for%the%development%
of%a%valueeadded%product%(i.e.%beef%jerky),%seen%as%convenient%and%nutritious%by%consumers%and%
sold%at%a%relatively%high%price.%Perhaps%most%importantly,%given%that%small%producers%are%likely%to%
be% the% ones% to% help% fill% the% gap% in% the% local% meat% market% due% to% recent% industry% trends,%
cooperation%and+coordination%among%them%is%needed%to%provide%a%consistent%supply%and%quality%
of%meat%to%the%local%market.%
Consumer%Survey%%
Preliminary+Restaurant+Data++An+ exploratory+ survey+ of+ restaurant+ chefs+ was+ conducted+ verbally+ at+ the+ event,+ Taste+ of+ the+
Range,+ in+ 2011.+ Comments+ provided+ by+ chefs+ representing+ four+ consumer+ respondents+ are+
outlined+below:%
• Huggo’s:%%
o Very%interested%in%sources%for%local%ground%beef%
o A%supply%of%Big%Island%pork%would%provide%a%chance%to%smoke%my%own%meats%
o Also%interested%in%local,%organic%chicken%
• Tommy%Bahama’s:%%
o Have%some%local%sources%for%local%beef,%but%not%enough%–%I%would%be%interested%in%
buying%more%from%an%MSU%
• Honolulu%Burger%Company,%O‘ahu:%
o Will%be%expanding%to%the%Big%Island%soon%and%would%be%interested%in%buying%local%
beef%(from%an%MSU)%
• Village%Burger:%%
o Used%to% live%on%Lana’i,%where%there%was%an%MSU%that%culled%deer%and%sold% it% to%
the%hotels;%I%would%be%interested%in%purchasing%meat%from%a%Big%Island%MSU%
27%
Detailed+Survey+Results+% Consumer%surveys%were%conducted%by%phone%and%ineperson%from%April%to%May%2014%with%
select% restaurant% chefs% and% retail% store% purchasers% around%Hawai‘i% Island.% Respondents%were%
selected%to%include%establishments%known%to%have%a%local%food%procurement%program%as%well%as%
those% without% one.% A% total% of% seven% retail% stores% and% four% restaurants% were% included% in% the%
sample.%The%survey% is%divided% into% three%sections.%The% first% section%asked% if% the%establishment%
currently%buys%local%meat%and,%if%so,%from%where,%what%types,%if%a%label%is%required%to%ensure%the%
meat% is%genuinely% local,%and%what%percentage%of%total%meat%purchasing%that%accounts%for.%The%
second% section% collected% information% about% the% establishment’s% meat% purchasing% behavior%
more% generally,% such% as% the% volume% of% various% meat% cuts% purchased% over% the% past% week% or%
month%and% the%price%or%price% range%paid% for% such%cuts.%The% final% section%sought% to%determine%
whether%the%respondent%would%be%interested%in%purchasing%local,%gourmet%meat%from%an%MSU%if%
such%product%were%available%and%if%he/she%would%be%willing%to%pay%a%premium%for%it.%A%copy%of%
the%consumer%survey,%adapted%from%Curtis%et%al.%(2007),%can%be%found%in%Appendix%B.%+
% Results% indicated%that%most%establishments%surveyed%do%currently%purchase%some%local%
meat%(Figure%2).%Over%the%past%30%days,%more%than%80%%purchased%local%beef%and%just%under%20%%
purchased%local%lamb%and%pork,%while%none%purchased%any%goat%meat%–%local%or%otherwise.%%
28%
Figure!2.!Percent!of!Establishments!Surveyed!That!Purchase!Local!Meats!
0
10
20
30
40
50
60
70
80
90
Beef Lamb Pork Goat
Meat%Type
Percen
t%of%e
stab
lishm
ents%surveyed
Total
Retail
Restaurant
%
Of%the%seven%retail%stores%surveyed,%the%percent%of% local%beef%sourced%ranged%from%0%%
(Safeway)% to% 100%% (JJ’s% Market),% with% an% average% around% 34%% (Figure% 3).% % Of% the% four%
restaurants%surveyed,%that%percentage%also%ranged%from%0%%(Café%Il%Mundo)%to%100%%(Minnie’s),%
with%the%average%around%50%%(Figure%4).%The%percent%of%lamb%and%pork%sourced%locally%was%very%
modest%for%all%respondents%(below%20%),%except%for%JJ’s%(100%%local%lamb)%and%Minnie’s%(100%%
local%pork).%Most%establishments%reported%purchasing%their%local%meat%from%meat%processors%or%
distributors% such% as% Hawai‘i% Beef% Producers% or% Kulana% Foods,% and% only% one% reported% buying%
directly%from%producers%(Red%Water%Café).%70%%of%all%establishments%required%labeling%to%ensure%
their%purchases%were%genuinely%local.%%
29%
Figure!3.!Local!Beef!Sourcing,!By!Retailer!!
0
10
20
30
40
50
60
70
80
90
100
Foodland
Choicemart
KTA
Kona's4Natural4Food4
Safew
ay
JJ's4M
eat4M
arket
Takata's4
Percen
t4of4local4beef4p
urchased
%
Figure!4.!Local!Beef!Sourcing,!By!Restaurant!!
0
10
20
30
40
50
60
70
80
90
100
Sam$Choy's Red$Water$Café Minnie's Café$Il$Mondo
Percen
t$of$local$beef$p
urchased
30%
The%more%general%meat%purchasing%behavior%of%respondents%varied%considerably,%and%a%
few%retail%stores%were%not%willing%or%able%to%share%their%volume%and%purchase%price%information.%%
Of% the% eight% respondents% for%whom%data%was% available,%weekly% beef% purchases% ranged%up% to%
2,420lbs% for% retail% stores% and% up% to% 1,430lbs% for% restaurants;% pork% purchases% ranged% up% to%
1,440lbs%and%400lbs%for%retail%stores%and%restaurants,%respectively;%and%lamb%purchases%ranged%
up%to%220lbs%and%100lbs%for%the%two%groups.%When%a%single%establishment%purchased%the%same%
cut%from%both%local%and%nonelocal%sources,%the%local%wholesale%price%tended%to%be%comparable%to%
or%lower%than%the%nonelocal%price,%sometimes%by%over%50%%(i.e.%Foodland’s%beef%roast).%Only%one%
instance%was%reported%where%the%wholesale%price%for%a%local%product%was%higher%than%that%of%its%
nonelocal%counterpart,%and%that%was%for%Foodland’s%ribeye%steak%by%a%margin%of%32%.%%
The% types% of% cuts% purchased% also% varied% considerably% between% the% two% consumer%
groups,% with% retail% stores% more% commonly% buying% primal% cuts% (whole% or% half% carcasses)% and%
butchering% and% packaging% individual% portions% inehouse,% while% restaurants% typically% purchased%
custom%cuts.%The%most%common%meat%cuts%purchased%on%a%weekly%basis%included%rib%eye%steak%
(5%establishments),%ground%hamburger%beef%(4%establishments),%and%sirloin%steak,%pork%shoulder%
and%pork%loin%(3%establishments,%each).%All%other%cuts%reported%were%only%purchased%regularly%by%
one%or%two%locations.%%%
Of%all%establishments%surveyed,%70%%expressed%interest%in%purchasing%high%quality,%local%
meat%from%an%MSU%if%such%product%were%available,%though%one%retailer%(Takata’s)%noted%it%would%
only%be%interested%in%purchasing%pork%and%another%(KTA)%in%purchasing%lamb%and%pork%–%as%both%
stores%already%have%a%successful%protocol%for%purchasing%local%beef.%%Of%total%respondents,%half%
were% not% willing% to% pay% more% than% they% currently% do% for% local% meats,% and% the% other% half%
responded%that%they%would%consider%paying%a%premium%depending%on%the%product%quality.%%%
These%results% indicate%that%many%retailers%and%restaurants%currently%do%buy%some%local%
meat,% though% this% is%predominantly% limited% to%beef%products.% Interestingly,% the%percentage%of%
local%meats%purchased%did%not%necessarily%coincide%with%the%establishment%having%a%concerted%
or%advertised%“buy%local”%program;%for%instance,%Minnie’s,%a%local%restaurant%with%no%advertised%
local% foods%campaign,% served%a%greater%portion%of% its%meat% from% local% sources% than%any%other%
restaurant%in%the%sample.%Similarly,%Takata’s,%a%local%grocery%store%with%no%advertised%local%foods%
31%
program,%reported%a%substantially%greater%percentage%of%local%beef%than%KTA,%which%is%known%for%
its% local% food% brand.% Thus,% in% developing% the% market% for% local% meat,% all% potential% wholesale%
customers%should%be%considered%–%whether%big%or%small,%or%known%to%have%a%buy%local%program%
or% not.% Consumer% survey% results% also% suggest% that% there% is% significant% demand% for%more% local%
meats,%especially%lamb%and%pork,%though%there%is%also%room%for%increased%Hawai‘i%Island%beef%in%
the%local%market.%Retail%stores%will%likely%continue%to%prefer%purchasing%primal%cuts%to%fit%their%ine
store% operations,% while% restaurants% will% prefer% purchasing% custom% cuts% to% fit% their% varying%
menus.% Both% groups%will% not% be%willing% to% pay% a% premium% for% local,% natural%meats,% however,%
unless%the%product%has%a%consistently%demonstrated%higher%quality.%%
!
32%
IV.!Technical!Feasibility!!
How%an%MSU%Works%
% The% following% description% of% how% an%MSU%works% is% borrowed% from% the% CTAHR% (2011)%
report,%“A%review%of%mobile/modular%slaughter%and%processing%technology,”%and%is%necessary%to%
understand% the% regulatory% requirements%outlined% later% in% this% section.% % An%MSU% consists% of% a%
preefabricated% trailer% or% structure% designed% to% accommodate% slaughter,% chill,% and% initial%
processing% into%halves% or% quarters% in% a% single% unit.%When% the%unit% travels% to% various% ranches,%
each% rancher% is% usually% responsible% for% burial% or% composting% of% nonedible% offal% per% local%
regulations;%when% the%MSU%operates% at% a% central% docking% site% location,% the%MSU% tends% to%be%
responsible%for%appropriate%offal%disposal%and%meeting%other%regulations.%In%both%cases,%animals%
are%restrained%and%killed%outside%the%unit%and% immediately%brought% into%the%back%or%center%of%
the%trailer%via%a%topemounted%winch.%One%or%two%workers%remove%the%hide,%head,%and%offal,%and%
split%the%carcass%in%half.%Most%units%have%a%small%door%near%the%floor%where%offal%can%be%pushed%
out% directly% into% a% barrel% or% chute.% The% carcasses% are% then% moved% into% a% rear% or% central%
refrigerated% compartment%and% the%processing% compartment% is%washed%down%before% the%next%
animal%is%brought%in%to%be%processed.%Most%units%have%a%third%compartment%in%the%forwardemost%
portion%of%the%trailer%that%holds%a%water%tank,%generator,%and%other%operational%equipment.%%
Regulatory%Requirements%
A% certified% MSU,% like% all% Statee% or% federallyeinspected% meat% slaughter% or% processing%
businesses,%must%comply%with%USDA%food%safety%regulations%promulgated%and%enforced%by%the%
USDA’s%Food%Safety%and%Inspection%Service%(FSIS).%The%FSIS%is%responsible%for%inspecting%all%meat%
products% in% the% US% for% safety,% wholesomeness,% and% proper% labeling.% Federal% inspection%
personnel%must%be%present%at%all%times%in%virtually%all%slaughter%processing%plants%and%for%at%least%
part%of%each%day%in%establishments%that%further%process%meat%products%(USDAeFSIS,%2006).%The%
inspection% process% starts%with% the% live% animal.% Anteemortem% inspection% involves% a% visual% and%
physical% evaluation% of% the% live% animal% prior% to% slaughter% to% identify% any% conditions% that%may%
indicate%disease%or%illness.%Humane%handling%is%also%a%primary%concern,%and%strict%guidelines%are%
in%place%and%strongly%enforced%to%prevent%the%mishandling%of%animals.%FSIS%inspection%personnel%
33%
are% responsible% for% conducting% a% thorough% examination% of% all% slaughtered% animals;% the% poste
mortem% inspection%allows% inspection%personnel% to% further%evaluate% the%health%of% carcass% and%
tissues.% The% inspection% system% continues% throughout% the% entire% processing% segment% of% the%
industry,%including%both%raw%and%fully%cooked%products.%%
A%federal%grant%of%inspection%is%required%for%a%USDA%certified%MSU%to%operate.%There%are%
seven%steps%to%obtaining%a%grant%of%inspection,%outlined%in%FSIS’s%publication,%“Small/Very%Small%
Plant%Guide:%Applying%for%a%Federal%Grant%of%Inspection,”%available%online.%The%steps%are:%
1.!File!an!application!(FSIS%Form%5200.2)%
2.!Facilities!must!meet!regulatory!performance!standards%(Code%of%Federal%Regulations%
Forms% 9% CFR% 416.1% through% 416.6).% Inspection% from% FSIS% front% line% supervisor% is% also%
required%to%verify%regulatory%performance%standards%pertaining%to%walls,%floors,%ceilings,%
lighting%and%grounds.%
3.! Obtain! approved! labels! (all% carcasses% slaughtered% within% the% MSU% must% be% inke
branded% with% the% US% Inspection% legend,% which% includes% the% establishment% number%
assigned% to% the%MSU).% The%MSU%must% furnish% its% own% ink%brands,% burning%brands% and%
other% brands% for% marking% products% with% the% official% mark% of% inspection.% All% labels% on%
meat%products%must%be%approved%preesale%by% the%FSIS’% Labeling%Program%and%Delivery%
Division%and%submitted%using%form%7234e1%with%a%sketch%of%the%MSU’s% label,%which%can%
include%up%to%8%required%features:%product%name,%inspection%legend%with%establishment%
number,% company% address,% ingredients% statement% (for% products% with% more% than% 1%
ingredient),% net% weight,% handling% statement,% nutritional% facts% and% safe% handling%
instructions.%If%the%label%claim%is%certified%by%a%third%party%certifier%(i.e.%certified%organic%
or%humane),%a%copy%of%the%MSU’s%certification%to%the%FSIS%must%also%be%submitted.%
4.!Obtain!approved!water!source!letter%(required%for%each%site%the%MSU%plans%to%visit).%
The% letter% should% identify% the%water% sources,%a% statement% that% the% source% is%approved%
and% a% statement% that% the% water% is% potable% and% meets% tests% prescribed% by% the% EPA’s%
drinking%water%standards.%For%all% locations%where%a%municipal%water%supply%is%used,%the%
approved%water%source%letter%should%be%renewed%once%a%year;%for%locations%with%private%
wells,% the% letter% must% be% renewed% semieannually.% An% alternative% is% to% transport% the%
34%
MSU’s%water%in%a%tank%to%each%location,%which%is%permissible%as%long%as%there%is%a%water%
report%certifying%the%potability%of%the%water%source.%
5.!Obtain!approved!sewage!system!letter%(required%for%each%site%the%MSU%plans%to%visit,%
and%may%be%approved%by%the%same%authority%as% the%water%source% letter% for%each%site).%
The%sewage%system%letter%must%state%that%the%MSU’s%waste%removal%system%is%acceptable%
as% determined% by% state% or% local% health% authorities.% Assuming% the% MSU% will% not% be%
equipped%with% its%own%sewage%system,%human%waste% issues%will% take%place% in%different%
bathroom%facilities%at%each%slaughter%site.%
6.!Provide!a!written!standard!operating!procedure!for!sanitation!(SSOP)% (for%detailed%
regulations,%see%9%CFR%416.11%through%416.17).%This%written%procedure%states%the%MSU%
must% be% maintained% in% a% manner% that% will% not% result% in% product% adulteration% of%
unsanitary% conditions,% which%may% include% such% items% as% hand%washing% schedules% and%
temperature%controls.%The%written%SSOP%must%be%tailored%specifically% for%the% individual%
MSU.%
7.! Provide! a!written!hazard! analysis! and!HACCP!plan! (for% detailed% regulations,% see% 9%
CFR%part%417).%An%outside%consultant%may%be%used%to%conduct% the%hazard%analysis%and%
assist%in%developing%a%HACCP%plan%specific%to%the%operation,%which%should%be%developed%
to%prevent,%control%or%eliminate%all%potential%hazards%as%identified%in%the%hazard%analysis.%
Each%State%is%assigned%a%HACCP%contact%and%should%have%a%HACCP%Coordinator%to%assist%
establishments%with%the%development%of%HACCP%Programs.%The%HACCP%Coordinator%for%
Hawai‘i% State% is% Dr.% Aurora% Saulo,% Extension% Specialist% in% Food% Technology% at% the%
Department%of%Tropical%Plant%and%Soil%Sciences,%University%of%Hawai‘i%at%Manoa:%email%–%
aurora@Hawai‘i.edu,% office% phone% –% (808)% 956e6564.% Dr.% Saulo% offers% HACCP%
certification% courses% on% an% aseneeded% basis% around% the% State,% for% a% cost% of% $550% per%
person.+
% %
The% FSIS% also% recommends% that% MSUs% include% a% training% program% for% employees% on%
humane% handling.% Facilities% are% encouraged,% though% not% required% (as% of% 2010),% to% adopt% the%
suggested% systematic% humane% handling% and% slaughter% approach% issued% by% the% FSIS,% which%
35%
includes% an% SOP% that% employees% and% livestock% owners% can% sign% saying% they% understand% the%
Humane% Methods% of% Slaughter% Act% (9% CFR% 313).% Certified% facilities% are% provided% with% FSIS%
inspection%service% free%of%charge% for%up% to% five%consecutive%eightehour%days,%Monday% through%
Friday.%This%inspection%must%be%scheduled%in%advance%–%with%hours%of%operation%approved%by%the%
district%manager;%the%inspector%must%be%paid%for%any%work%beyond%those%initial%eight%hours/day.%
Every%time%the%unit%relocates%and%prior%to%conducting%slaughter%operations,%the%MSU%operator%
must% notify% the% district% office% of% its% operating% schedule.% In% addition,% office% space% must% be%
provided%free%of%charge%for%the%exclusive%use%of%the%USDA%inspector,%located%within%or%outside%
the%confines%of% the%unit;% this% includes%a% locker%suitable% for% the%storage%and%protection%of%FSIS%
program%supplies.%%
There% are% various% resources% available% on% the% FSIS% website,% including% guidelines% for%
obtaining%a%Federal%Grant%of%Inspection%and%even%specific%compliance%guidelines%for%MSUs.%The%
Niche% Meat% Processor% Assistance% Network% (NMPAN)% has% also% developed% model% HACCP% and%
SSOP% plans% for% MSUs,% which% can% be% found% on% its% website:%
http://www.nichemeatprocessing.org/.%%
MSUs%must%also%comply%with%a%variety%of%other%regulations%promulgated%and%enforced%
by% public% agencies% at% multiple% levels% of% jurisdiction,% including% municipal,% County,% and% State.%
Since% Hawai‘i% does% not% yet% have% an% operational,% certified% MSU% (a% new% MSU% was% recently%
purchased%by%a%company%on%Lana‘i,%but%is%not%yet%functional%and%initially%plans%to%process%Axis%
deer%for%community%distribution%only,%without%federal%inspection),%many%regulations%pertaining%
to%MSUs%may%have%no%precedent%and%the%new%unit%will%have%to%work%in%partnership%with%local%
and% State% agencies% to% develop% appropriate% protocols.% The% Hawai‘i% Island% MSU% Steering%
Committee%should%visit%with%government%agencies%early%on%and%engage%them%through%an%open,%
collaborative%working%approach.%This%may% include% inviting%all% relevant% regulators% to%meet%as%a%
group%to%explain%the%project’s%purpose%clearly%and%ask%how%they%can%all%help.%The%MSU%Steering%
Committee%may%also%provide%extensive% scientific%documentation%about%offal%and%waste%water%
composting% (i.e.% from% Cornell% University% Waste% Management% Institute,%
http://cwmi.css.cornell.edu/)% to% show% the% agencies% that% disposal% methods% proposed% will% not%
cause% a% public% health% problem.% Some% specific% regulatory% issues% that% are% likely% to% emerge% –%
36%
pertaining% to% both% the%MSU,% its% operating% sites,% and% the% chill,% cut/wrap% facility% that% provides%
additional% processing% services% (see% section% V% for% more% information% on% chill,% cut/wrap)% –% are%
outlined%below,%with%examples%illustrating%“best%practices”%from%other%successful%MSUs%around%
the%country.%%
Potable+Water+Supply+and+Waste+Water+Disposal+As%mentioned% previously,% the%MSU%must% obtain% an% approved% water% source% letter% for%
each%site%it%plans%to%visit,%identifying%the%water%sources%used%for%its%operations%and%stating%that%
the% water% is% potable% and% meets% the% EPA’s% drinking% water% standards.% The% MSU% may% also%
transport%its%own%water%in%a%tank%to%each%location,%as%long%as%there%is%a%water%report%certifying%
the%potability%of%that%water%source,%as%well.%
In% New% Mexico,% an% MSU% called% the% “Mobile% Matanza”% brings% its% own% potable% water%
drawn%from%a%commercial%well% to%each%of% its%operating%sites% in%a% large%tank.%The%New%Mexico%
Environment%Department%(NMED)%has%jurisdiction%over%water%in%that%State%and%requires%the%unit%
to% test% its% water%monthly% for% potability.% The% water% is% sampled% and% tested% by% the% NM%water%
testing%laboratory,%which%then%issues%a%report%to%the%MSU%and%the%MSU%provides%a%copy%to%the%
FSIS.% NMED% also% allows% the% MSU% to% let% its% waste% water% used% during% carcass% cleaning% and%
preparation%run%off%onto%the%soil%at%each%ranch/operating%site.%The%runoff%includes%a%2.5%%acid%
solution%used%to%wash%the%carcasses%to%control%pathogens.%The%total%amount%of%water%used%each%
slaughter% day% is% a% few% hundred% gallons.% The% Mobile% Matanza’s% chill,% cut/wrap% facility% was%
provided% by% the% noneprofit% Taos% County% Economic% Development% Corporation’s% (TCEDC)%
commercial%kitchen%and%was%required%by%the%NMED%to%hook%up%to%the%town%sewer%(which%cost%
$3,000).%However,%effluent%tests%are%now%being%conducted%to%assess%weather%TCEDC%can%build%
an%environmental%waste%water%treatment%facility%with%an%anaerobic%tank%to%process%the%waste%
water,%after%which%the%treated%water%could%be%used%to%water%trees%on%the%property.%
In%California,% the%“Coast%Grown”%MSU%also%brings% its%own%potable%water%drawn%from%a%
municipal% water% source% in% a% 300egallon% tank% (sufficient% for% 2e3% head% of% beef).% County%
environmental%health%departments%require%Coast%Grown%to%test% this%water%source%annually% to%
certify%potability%and%provides%water% testing%kits.%Any%additional%water%needed% for%processing%
and% cleanup% is% provided% by% the% ranch% site.% This% source% must% also% be% tested% (biannually% for%
37%
private% wells)% and% Coast% Grown% must% carry% a% copy% of% the% potability% certification% for% each%
location.% Coast% Grown’s% wash% water% may% not% run% offsite% and% must% be% contained.% The% wash%
water%may%be%applied%to% land% for%disposal%using%NRCS%recommendations,%developed%by%Coast%
Grown%in%partnership%with%the%regional%Resource%Conservation%and%Development%district;%these%
procedures%have%now%become%the%official%State%standard%and%specification%for%the%practice,%used%
by%other%MSUs%operating%in%CA.%+
In%South%Dakota%and%North%Dakota,%an%MSU%owned%and%operated%by%the%company,%“Wild%
Buffalo%Idea”%has%permission%from%both%States’%Environment%and%Water%Departments%to%spread%
wastewater%on%the%ranchers’%fields%where%slaughter%takes%place.%%
In% Kansas,% the% “Ranch% Foods% Direct”%MSU% uses% a% concrete% pad% with% an% underground%
drain%designed% to%deal%with%agricultural%waste%and%approved% for%waste%disposal.%The%water% is%
approved%as%agricultural%waste%(and%not% industrial%waste)%and%all%remaining%slaughter%waste%is%
utilized%as%a%high%quality%fertilizer.%%
On%Hawai‘i% Island,% the%County%Department%of%Water%Supply% is% the%agency% in%charge%of%
potable%water% issues,%directed%by%Querino%Antonio,% J.R.,%P.E.,%ManagereChief%Engineer%–%office%
phone:%(808)%961e8050.%Waste%water%handling%and%runoff%restrictions%are%under%the%jurisdiction%
of% the% State% Department% of% Land% and% Natural% Resources% (DLNR)% and% coordinated% with% the%
Natural%Resources%Conservation%Service%(NRCS).%%
Offal+Disposal+Offal% refers% to% the%byproducts%of% the%butchering%process,% and% includes% internal%organs%
and%entrails%–%some%of%which%may%be%used%for%food%such%as%the%liver,%as%well%as%inedible%parts.%
New%Mexico’s%Moble%Matanza%worked%with%the%NMED%and%USDAeFSIS%to%establish%that%offal%is%
recognized%as%the%responsibility%of%the%rancher%and%that%the%rancher%may%compost%it%on%his/her%
own% land.% The% offal% is% placed% into% bins% as% it% is% removed% from% the% animals% and% the% ranchers%
compost%it%accordingly%and%are%permitted%to%take%bones%to%the%landfill.%In%addition,%the%Mobile%
Matanza% offers% an% organic% butcher% waste% composting% workshop% for% ranchers% to% teach% them%
proper%composting%methods%to%assure%they%do%not%violate%State%environmental%regulations.%+
% In%California,%oneranch%composting%of%offal% is%not%permitted,% so% the%Coast%Grown%MSU%
must% dispose% of% it% offsite,% which% requires% an% “inedibles”% permit% from% the% CA% Department% of%
38%
Food%and%Agriculture,%which%identifies%an%approved%rendering%plant,%pet%food%plant%or%collection%
station%where%the%MSU%may%take%the%offal.%%
% In%the%Dakotas,%ranchers%utilizing%Wild%Buffalo%Idea’s%MSU%save%from%the%offal%what%they%
can%use%and%bury%what%they%cannot.%%%
In% Hawai‘i,% offal% is% already% a% concern% across% the% State% because% all% slaughter% facilities%
dispose% of% it% at% local% landfills% (Cox% and% Bredhoff,% 2003).% According% to%Melrose% and% Delparte%
(2012),% the% Hawai‘i% Beef% Producers’% slaughterhouse% in% Pa‘auilo% has% received% State% funds% to%
install% a% new% rendering% plant% and% other% improvements% that% will% help% to% expand% its% capacity.%
While% there%may%potential% for%a%Hawai‘i% Island%MSU’s%offal% to%eventually%be%processed%at% this%
new% rendering%plant% and% converted% into%a%highequality,% commercial% valueeadded%product% (i.e.%
food%for%pets,%livestock,%and/or%fish,%or%an%organic%soil%amendment),%construction%of%this%facility%
is%not%yet%completed%and% its% timeline%to%become%operational% is%currently%unknown.%On%Lana‘i,%
the% company% that% recently% acquired% an% MSU% for% processing% venison% for% community% use% is%
currently% working% with% Hawai‘i% State% Department% of% Health% Environmental% Engineer,% Lene%
Ichinotsubo,%to%obtain%a%deer%meat%composting%permit%based%on%the%Cornell%University%Waste%
Management% Institute’s% Natural% Rendering% guidelines,% which% provide% for% safe% onesite%
composting%of% nonedible% offal% (including%blood)% into%usable% compost% on% agricultural% land%not%
intended% for% the%production%of% raw%produce.%Mrs.% Ichinotsubo% is%working% collaborativey%with%
the%Lana‘i%MSU%group%and%can%be%reached%at%(808)%586e4226.%%
Food+Safety+++ All% chill,% cut/wrap% facilities%must% comply%with%US% Food%and%Drug%Administration% (FDA)%
guidelines.%This%agency%has%requirements%about%meat%handling,% including%that%meat%processed%
at%the%facility%be%transported%in%an%approved%cooler.%The%Mobile%Matanza’s%cut/wrap%facility%in%
Taos,%NM%is%also%inspected%by%NMED,%which%issues%its%establishment%permit.%
Weights+and+Measures++% The%State%DOA%is%in%charge%of%making%sure%all%agricultural%scales%are%properly%calibrated.%
This%is%an%annual%visit%and%applies%only%to%the%chill,%cut/wrap%facility.%
39%
Transportation+% Because%MSU’s%are%generally%commercial%tractoretrailers,%they%must%have%a%permit%from%
the%State%Department%of%Transportation%and%follow%agency%guidelines%about%maintenance%and%
recordkeeping.%This%is%true%for%both%the%NM%and%CA%MSUs.%%
Food+Defense+% The%State%Department%of%Homeland%Security,%as%part%of% its%mission%to%prevent%terrorist%
attacks% on% the% nation’s% food% supply,% may% have% requirements% for% water% source,% testing% and%
protection,% and% registration%and% recordkeeping% for%any% imported% food%products%used% in%meat%
preparation% or% processing.% As% of% 2010,% federallyeinspected% processing% establishments% are%
encouraged,%though%not%required,%to%adopt%a%Food%Defense%Plan%(FDP)%and%the%USDAeFSIS%may%
make%adoption%mandatory%in%coming%years.%The%agency%provides%a%model%FDP%to%support%MSUs%
or%other%plants%in%writing%one.%%%
Brand+Inspection+% To%ensure%the%MSU%does%not%slaughter%any%stolen% livestock,%the%unit%may%have%to%have%
documentation%of%ownership,%(e.g.%the%livestock%slaughtered%in%the%MSU%are%actually%owned%by%
the%ranchers%who%brought%them).%In%NM,%the%NM%Livestock%Board%(NMLB)%has%jurisdiction%over%
brand%inspection%and%allows%the%MSU%to%have%the%ranchers%sign%an%affidavit%so%a%brand%inspector%
need%not%be%present.%However,%one%of%the%counties%they%serve%has%started%requiring%ranchers%to%
provide%NMLB%with%eartag%information.%%
Business+Permit+% The%MSU%operates%under%business%registration%issued%by%the%State,%as%appropriate%for%its%
type% of% organizational% structure% (i.e.% cooperative,% nonprofit,% LLC,% etc.).% It% must% also% have% a%
General%Excise%Tax%(GET)%number%and%(unless%granted%tax%exemption%as%a%501(c)(3)%nonprofit)%
pay%Hawai‘i%State%GET%of%4.17%%on%the%sale%of%all%products%and%services.%%
Employment+Taxes+and+Worker+Safety+% Like%all%businesses,% the%MSU%pays%employment% taxes%and%worker%compensation% for% its%
employees.% In% addition,% because% employees% are% operating% a% tractoretrailer,% which% requires% a%
40%
special% license% (Class% A% CDL),% they% must% comply% with% specific% State% Department% of%
Transportation%requirements%including%drug/alcohol%testing%and%background%checks.%
Feral+Animals%%Feral%animals%are%slaughtered%like%livestock,%requiring%an%anteemortem%examination%by%a%
certified%USDA%inspector.%This%is%typically%done%by%trapping%the%animal%live%and%bringing%it%to%the%
unit%for%inspection,%or%by%bringing%the%USDA%inspector%into%the%field.+
Specialty+Food+Certification+and+Non+Certified+Slaughter+Meat% intended% for% specialty% food% certification% such% as% organic,% kosher% or% halal% can% be%
processed% in% the%MSU% first% in% the% day,% as% long% as% appropriate% personnel% are% on% board% (i.e.% a%
rabbi)% and% the% line% has% undergone% a% complete% cleaning% since% the% previous% work% day.% % In%
addition,% all% raw%materials%may%need% separate% storage% areas%prior% to%processing,% as%might% all%
finished%products%unless%they%are%completely%packaged%before%being%placed%into%the%cooler%or%
freezer.%%
Similarly,%an%MSU%can%handle%both%USDA%certified%and%exempt%slaughter% (not%destined%
for%commercial%sale),%as%long%as%the%carcasses%are%adequately%separated%to%avoid%any%chance%of%
cross% contamination.13% %Given% the% close% confines%of%an%MSU’s% cooler%where% the% carcasses%are%
hung,% this% is% generally%achieved%by% separating% the% types%of% slaughter%on%different%days%of% the%
week.%
% %
In%addition%to%these%regulatory%considerations,%the%MSU%should%be%prepared%for%a%Food%
Safety%Assessment%(FSA),%an%audit%done%by%the%USDAeFSIS%to%assure%that%food%safety%procedures%
are%effective.%Done% randomly%or% in% response% to%a%problem,%current%FSIS%practice% is% that%every%
federally% inspected% establishment% will% receive% an% FSA% at% least% once% every% 4% years.% An% FSA% is%
conducted%by%an%FSIS%enforcement%officer,%who%visits%the%plant%to%review%food%safety%documents%
(HACCP,%SSOPs,%etc.)%and%to%assess%the%operation%in%action.%%
The%MSU%should%also%always%be%prepared%for%a%humane%slaughter%audit,%which%can%occur%
at% any% time,% based,% in% part,% on% volume,% and% is% conducted% by% a% USDA% veterinary% medical%
13%Personal%communication%with%national%Mobile%Slaughter%expert,%Lauren%Gwin,%Director%of%the%Niche%Meat%
Processors%Association%(NMPAN),%September%22,%2014.%
41%
specialist.%USDAeFSIS%provides%a%guidance%booklet,%“Humane%Handling%of%Livestock%and%Poultry”,%
and% a% companion% DVD% featuring% Dr.% Temple% Grandin% –% an% engineer% and% professor% of% animal%
science% at%Colorado% State%University,%who% serves% as% a% consultant% to% the% livestock% industry%on%
animal%behavior.%%
It%should%be%noted%that%an%additional%challenge%in%operating%a%multiespecies%processing%
facility% –% mobile% or% otherwise% –% is% that% current% regulations% do% not% allow% for% more% than% one%
species% to% be% processed% at% a% time.% In% order% to% handle%more% than% one% species,% they%must% be%
separated% either% in% space% (completely% separate% areas% of% the% building/unit)% or% in% time% (in% the%
same% area,% but%with% a% complete% cleaning% of% the% line% between% a% change% from%one% species% to%
another).%In%addition,%all%raw%materials%need%separate%storage%areas%prior%to%processing,%as%do%all%
finished%products%unless%they%are%completely%packaged%before%being%placed%into%the%cooler%or%
freezer.%Moreover,%each%species%and%product%form%may%have%to%have%its%own%approved%HACCP%
food%safety%management%plan.%%
42%
V.!Auxiliary!Considerations!
Chill,%Cut/Wrap%and%Retail%Facility%
MSUs%only% provide% slaughter% services% along%with% the% initial% chilling% required% for%USDA%
compliance.% % Therefore,% it%must% also%own,% lease,% or%work% in% partnership%with% a% fixedelocation%
cut/wrap%facility%that%provides%the%additional%processing%services%needed%to%bring%the%certified%
meat% to% market.% Skinning% and% evisceration% takes% place% inside% the% MSU,% with% halfecarcasses%
subsequently% hung% in% the% unit’s% refrigerated% section,% after% which% the%MSU% or% a% refrigerated%
“nurse% truck”% transports% the% dressed% carcasses% to% a% fixed% facility% for% chilling% or% aging% and%
subsequent%cut,%wrap,%and%retail.%This%step% is%particularly% important%for%forage%finished%(grasse
fed)%meat,%which%must% age%2e3%weeks% to% reach% its% highest% quality% (Stevenson%and% Fukumoto,%
2011).%The%chill,%cut/wrap%facility%must%also%be%USDAeinspected,%as%previously%mentioned%in%the%
Technical%Feasibility%section.% If% the%entity%operating%the%MSU%also%operates%the%chill,%cut/wrap%
facility,%it%will%be%responsible%for%complying%with%all%regulations%pertaining%to%that%facility.%If%the%
entity%operating%the%MSU%has%a%contractual%arrangement%with%a%separate%chill,%cut/wrap%facility,%
the%latter%handles%its%own%regulatory%compliance.%%
The%longeterm%goal%for%the%Hawai‘i%Island%MSU%is%to%operate%its%own%chill,%cut/wrap%and%
retail% facility,% because% case% studies% of% numerous%MSUs% around% the% country% have% shown% that%
controlling%the%entire%meat%processing%chain%–%from%slaughter%to%marketing%and%sales%–%tends%to%
be%a%critical%component%for%project%financial%success.%Slaughter%operations%usually%aim%to%break%
even,% while% profit% is% made% on% the% further% processing% and% sale% of% meat% downstream% or% on%
production% upstream.% Furthermore,% as% discussed% in% the% Market% Analysis% section,% for% local%
producers% to% truly% benefit% from% having% access% to% a% certified% MSU,% their% meat% must% be%
appropriately% marketed% so% as% to% communicate% its% desirable% (valuable)% characteristics% to%
consumers%and%obtain%price%premiums.%A%chill,%cut/wrap%and%retail%facility,%integrated%with%the%
MSU% and% operated% by% and% for% island% producers,% would% provide% a% storefront% for% the% sale% of%
handcrafted%local%meats%and%–%importantly%–%a%vehicle%to%present%a%unified%brand%identity%with%
consistent%quality%and%quantity.%
However,% building% a% chill,% cut/wrap% and% retail% facility% is% capital% intensive,% possibly%
requiring%more%time%to%construct%than%to%acquire%the%MSU%itself.%For%this%reason,%various%interim%
43%
options% for% utilizing% existing% chill,% cut/wrap% facilities% oneisland% have% been% explored.% These%
options% include% partnering% with% a% local% grocery% chain% (KTA),% or% utilizing% the% chill,% cut/wrap%
facilities%of%one%or%both%of%the%island’s%two%slaughterhouses.%%Neither%of%these%options%appears%
to%be%viable%in%the%neareterm,%however,%as%both%slaughterhouses%already%have%a%shortage%of%chill%
space%and%KTA%is%not%able%to%provide%its%cut/wrap%services%for%outside%use.14%%And%whereas%some%
MSUs% around% the% country% have% partnered%with% local% communityebased% commercial% kitchens,%
none%of% those%oneisland%currently%have%meat%processing%capacity.%Several%starteup%community%
kitchens% are% in% the% planning% and% development% stages,% so% consideration% should% be% given% to%
engaging% them% about% potential% collaboration.% Several% have% already% stated% they% are% not%
interested% in% incorporating% meat% processing% services% because% of% the% additional% health%
inspection%requirements,%but%one%potential%option%to%consider% is% the%Waimea%Nui%Agricultural%
Complex,% currently% in% the% planning% stage% and% scheduled% to% break% ground% in% March% 2015.%
Managed% by% the% Waimea% Hawaiian% Homesteaders% Association,% the% Waimea% Nui% facility% is%
anticipated% to% include% a% 4,000% square% foot% chill,% cut/wrap% and% aging% facility% for% Homestead%
ranchers% and% others,% and% has% expressed% interest% in% working% with% the% MSU% and% possibly%
providing%a%site%location%to%“house”%the%unit%when%it%is%not%operating.%%A%few%privately%owned,%
nonecertified%butchering%facilities%also%exist%around%the%island,%and%some%consideration%may%also%
be%given%to%exploring%their%interest%in%acquiring%USDA%certification%or%in%providing%chill,%aging,%or%
cut/wrap%services%for%MSU%products%not%intended%for%commercial%sale.%%
Perhaps%the%most%promising%location%for%a%future%fixed%chill,%cut/wrap%and%retail%facility%
managed% by% the% MSU% is% the% Natural% Energy% Lab% (NELHA),% north% of% Kailua% Kona.% There% is%
currently%an%available%2,000%square%foot%building%on%the%upper%site%of%the%NELHA%campus,%near%
the%Gateway%Center,%which%could%be%refurbished.%NELHA%Executive%Director,%Greg%Barbour,%has%
expressed%interest%in%working%with%the%HI%MSU%Task%Force%to%explore%the%viability%of%converting%
that% space% into% a% chill,% cut/wrap% and% retail% facility.% The%West% Hawai’i% Explorations% Academy%
(WHEA)%–%a%public%charter%school%that%emphasizes%projectebased%learning%–%is%also%located%near%
the%site%and%may%be%interested%in%partnering%with%the%facility%to%offer%educational%and%internship%
opportunities%for%students%interested%in%learning%about%sustainable%rural%development,%the%food%
14%Personal%communication%with%Jeff%Ikeda,%KTA%meat%purchasing%manager.%March%25,%2014.%%
44%
industry,%butchering,%business%administration%and%various%other%related%subjects.% % Importantly,%
NELHA%is%already%an%established%fishefarming%hub,%with%developed%storefronts%and%aquaculture%
tours%that%draw%“foodie”%residents%and%visitors%from%all%around%the%island%and%State.%According%
to% Mike% Callicrate,% rancher% and% operator% of% a% successful% MSU% in% Kansas% but% whose% chill,%
cut/wrap%and%retail%store%is%located%in%Colorado%Springs,%Colorado:%“it+is+important+to+locate+the+
chill,+cut/wrap+and+retail+facility+where+people+[the+consumers]+are+located”% (NMPAN%Webinar%
Panel,%September%2013).%NELHA%is%close%to%the% island’s%main%consumer%market%around%Kailuae
Kona,% the% Costco% shopping% area% –% which% draws% consumers% from% around% the% whole% island,%
resorts%and%vacation%rentals,%and%the%KOA%airport%for%intereisland%shipping.%This%location%would%
also%allow%the%operation%to%utilize%innovative%deepesea%water%thermal%conversion%technology%for%
chilling% the%meat% and% solarepower% for% energy.% Over% the% longer% term,% stabilizing% the% facility’s%
energy%costs%will%help%make%it%economically%viable.%%
Some% important% considerations% that% may% affect% the% final% location% of% the%MSU’s% chill,%
cut/wrap% and% retail% facility% depend% on% the% entity’s% ownership/management% structure% and%
where% any% preexisting% meat% processing% infrastructure% is% located.% Additional% site% possibilities%
that% may% warrant% investigation,% based% on% the% Hawai‘i% County% Food% SelfeSufficiency% Baseline%
report%(Melrose%and%Delparte,%2012),%include:%%
• North!Kohala!–!private!facility!conversion:%there%is%a%private%slaughter%and%chill%facility%
in% North% Kohala,% used% for% home%meat% production% or% informal% distribution% within% the%
community.% The% butcher/owner% is% currently% considering% retirement% and% this% facility%
could%potentially%be%renovated%for%commercial%use.%
• !South!Kohala!–!Parker!Ranch:% the% largest% land%owner%and%agricultural%business% in% the%
district%is%run%by%the%Parker%Ranch%Foundation%Trust%–%which%operates%its%cattle%operation%
primarily%as%an%export%cowecalf%business%and%retains% little%of% its%beef%production% in%the%
State.%However,%discussions%are%ongoing%with%Parker%Ranch%on%ways%the%company%might%
increase% its% role% in% the% local% grass% fed% beef% industry% and% use% selected% lands% for%
agricultural% purposes% –% such% as,% perhaps,% a% chill,% cut/wrap% and% retail% meat% facility.% In%
Spring% 2014,% Parker% Ranch% announced% the% launch% of% a% joint% venture% with% Ulupono%
Initiative% called%Paniolo+ Cattle+ Co.,+ LLC,%which%will% run% a% grassefed%beef% trial% beginning%
45%
with%1,400%head%of%cattle%to%be%raised%at%the%Waimea%ranch%and%processed%and%marketed%
locally%(Shimogawa,%March%21,%2014).+
• Hamakua! –! Hawai‘i! Beef! Producers! (HBP)! on! county! land:% With% approximately% a%
quarter%of% the% island’s%pasture% lands,% cattle% ranching% is% the% largest%user%of% agricultural%
lands% in% this% district.% The% Stateeowned% and% privately% operated% HBP% slaughterhouse% in%
Pa‘auilo% is% an% important% piece% of% the% infrastructure% needed% to% increase% the% supply% of%
local% grassefed% beef% to% markets.% Key% to% HBP’s% expansion% is% the% construction% of% a%
rendering%facility%to%dispose%of%waste%products%from%the%beef%production%process,%which%
the% State% has% agreed% to% fund% through% the% County% office% of% R&D% (currently% in%
development).%A% substantial% amount%of%Hamakua% land% is%owned%by% the%County,%which%
has%embarked%on%a% farm%and%ranch% lease%program%to%put%the%region’s% lands% into%more%
productive%use,%and%may%be%interested%in%leasing%a%parcel%for%an%MSU%chill,%cut/wrap%and%
retail%facility.%+
• Kona!–!where!consumers!are!located:%Kona%is%the%tourism%center%of%the%Big%Island%and,%
though%there%were%only%a%few%commercial%livestock%operations%as%of%2012,%ranching%has%
been% a% defining% part% of% Kona’s% upcountry% landscape% for% well% over% a% century.% Today,%
several%cattle%producers%in%the%area%are%exploring%grassefed%operations%to%provide%more%
local%meat%to%markets,%and%chefs%at%many%Kona%resorts%and%restaurants%make%a%strong%
commitment% to%use% local% foods% in% their% farmetoeplate%cuisine,%which%provides%a%steady%
market% for% local% producers% and% educates% visitors% about% the% value% of% Hawai‘i’s% unique%
agricultural%products.%For%these%reasons,%Kona%may%be%an%optimal%location%to%house%the%
MSU’s%chill,%cut/wrap%and%retail%facility.%
Docking%Site%Locations%and%Preparation%Requirements%%
Most%MSUs%function%in%one%of%two%ways:%either%the%unit%travels%to%individual%ranches%and%
harvests%their%respective%animals%as%well%as%those%from%other%ranches%in%the%area%(if%the%ranch%
owner%allows),%or%individual%ranchers%haul%their%animals%to%a%central%docking%site%in%the%region,%
where%holding%pens%and%the%MSU%are%located.%Because%of%Hawai‘i%Island’s%size%and%topography,%
it%will% likely% not% be% feasible% to% bring% the%MSU% to%all% individual% ranches.% Instead,% the% unit%will%
frequently%need%to%exploit%the%second%logistical%strategy,%and%may%require%several%docking%site%
46%
locations%to%which%area%ranchers%in%different%regions%would%transport%their%animals%for%harvest.%
Several%docking%site%locations%currently%under%consideration%include:%
1. Several% private% ranchers% around% the% island% have% offered% their% farm% as% a% central% site%
location% for% the%MSU% to% operate% and% agreed% to% provide% access% to% other% producers% in%
their% region.% If% the% unit% is% parked% at% a% private% ranch/farm,% it% will% establish% a%
lease/compensation%agreement%with%the%producer.%%
2. The%MSU%could%alternate%between%two%or%more%prepared%sites%on%County%or%leased%land.%%
%
Docking%sites% should%be%equipped%with%potable%water%and%electricity,% though% the%MSU%
will%have%its%own%oneboard%supplies,%as%well.%The%sites%must%have%a%level%area%on%which%to%park%
and%operate%the%unit%with%reliable%road%access%for%the%truck%and%trailer.%Ideally,%the%docking%sites%
would%include%a%concrete%pad%for%convenient%cleanup%and%a%gravel%approach,%as%well%as%holding%
pens%for%animals%waiting%to%be%harvested,%though%portable%holding%pens%may%be%used,%as%well.%%
The%sites%where%the%MSU%operates%will%be%required%to%comply%with%regulations%and%permitting%
regarding% water% supply% and% wastewater% disposal,% offal% disposal,% food% handling/distribution,%
transportation,% food% defense,% human% livestock% handling,% brand% inspection,% business% licensing%
and%employees.%Assuming%the%MSU%will%not%be%equipped%with% its%own%sewage%system,%human%
waste% issues%will% take%place% in%different%bathroom% facilities%at%each% slaughter% site.%Regulatory%
issues%pertaining% to%docking% sites%were%discussed% in%greater%depth% in% the%Technical% Feasibility%
section.%
% Optimally,%docking%site%locations%should%be%accessible%to%the%greatest%number%of% island%
ranchers%interested%in%using%the%MSU.%Livestock%are%currently%produced%all%around%the%island,%as%
pasture% for%meat% production% is% the% largest% use% of% agricultural% land% countywide,% representing%
nearly% 640,000% acres% (Melrose% and% Delparte,% 2012).% The% largest% concentrations% of% meat%
producers%are% found% in% the%Districts%of%Hamakua%and%North%Kona.%The%main%producer%groups%
represented%in%the%produce%survey%are%located%in%the%districts%of%Puna,%Hamakua,%North%Kona,%
South% Kona% and% Ka‘u.% The% four% producers%who% have% already% offered% their% ranch% as% a% central%
docking% site% are% located% in% North% Kohala,% Puna,% and% Ka‘u.
47%
VI.!Economic!Feasibility!!MSUs%are%typically%used%as%a%feeeforeservice%to%meet%operation%costs%and%do%not%function%
as%a%stand%alone%business%for%profit%(Stevenson%and%Fukumoto,%2011).%Meat%sales%and%marketing%
are%left%to%individual%ranchers,%an%organized%group%of%service%users%(i.e.%a%producer%cooperative),%
or%subcontracted%out%to%a%separate%company.%Economic%viability%has%therefore%been%a%defining%
factor%between%successful%MSUs%and%those%that%have%failed%–%despite%clear%need%for%slaughter%
services% in%both%scenarios.%Accurately%assessing%an%MSU’s%financial% feasibility% is%thus%crucial% to%
early%project%planning.%Some%of% the%key% reasons%certain%MSUs%have% folded%over% time% include:%
initial% overestimating% of% meat% supply% (Cowee% and% Harris,% 2011)% and% using% an% ineffective%
marketing% and% sales% strategy% (CCCD,% 2014).% According% to% Lauren%Gwin,% Director% of% the%Niche%
Meat% Processors% Association% (NMPAN),% one% of% the% keys% to%MSU% economic% success% is% having%
control% of% the% whole% market% chain% –% not% just% slaughter,% and% especially% including% the% chill,%
cut/wrap% services;% MSUs%without% reliable% access% to% a% USDA% certified% chill,% cut/wrap% facility%
cannot% provide% their% ranchers% with% legaletoesell% meat% –% unless% the% producers% are% using% an%
informal%market%network% (i.e.% CSA%or% animaleshare%program).%MSUs% that% subcontract% services%
from% a% separate% chill,% cut/wrap% facilities% tend% to% struggle% economically.% % For% these% reasons,%
many% MSUs% are% owned% by% nonprofit% community% development% organizations% or% local%
governments% or% by% producer% owned% cooperatives% that% operate% slaughter% services% at% cost% for%
their%members.%Nonetheless,%all%MSUs%must%operate%under%a%solid%financial%model%to%cover%the%
costs%of%providing%slaughter%services.%%
Startup%Costs+%Startup%costs%are%the%initial%investment%required%to%obtain%the%MSU.%Financing%for%most%
units% has% come% from% a% combination% of% public% and% private% sources.% Most% units% currently% in%
operation%have%been%primarily%funded%through%federal%and%other%grant%sources%(i.e.%the%Mobile%
Matanza%in%NM,%Puget%Sound%Meat%Producers%Cooperative%in%WA);%however,%some%have%been%
completely% privately% financed% (Wild% Buffalo% Idea% in% SD,% Ranch% Foods%Direct% in% CO).% The% costs%
vary% depending% on% the% type% of% system% used,% the% capacity% needed% and% the% regulatory%
requirements%in%the%respective%State(s)%and%counties%served.%%
48%
Total%startup%costs%for%the%Hawai‘i%Island%MSU%are%estimated%at%$265,456%which%includes%
the%cost%of%acquiring%a%unit,%preparing%several%docking%sites,%purchasing%miscellaneous%supplies,%
providing%butcher%training%on%board%the%unit,%and%HACCP%certification%(Table%2).%
MSU+The% following% financial% estimates% are% based% on% acquiring% a% unit% from% one% of% the% four%
recognized%and%experienced%MSU%manufacturers% in% the% country:% TriVan,% Featherlite,%Brothers%
Body%and%Equipment,%and%Flat%River%Corp.%%A%lightly%used%Flat%River%Corp%unit%is%also%available%for%
purchase% from% the%nonprofit,% Socially%Responsible%Agriculture%Project% (SRAP),% and% included% in%
the%MSU%Manufacturer%comparison%table%on%the%following%page%(Table%2).%%
All% the%units% presented% in% Table%2% are%equipped% to%process%beef,% sheep,% goat% and%pig,%
with%a%maximum%capacity%of%10%head%of% cattle%per%day,%16%head%of% sheep%or%goat,%or%12%pigs%
(based%on%the%maximum%animal%carcass%space%in%the%cooler%compartment%before%the%unit%would%
have%to%unload).%The%units%are%all%divided%into%three%sections:%mechanical/storage,%processing,%
and% a% hanging% carcass% cooler% room%designed% to% bring% “hot%meat”% to% below%45% degrees% in% 24%
hours.% They% all% comply% with% USDA% requirements% for% fit% and% finish% of% materials% to% facilitate%
sanitary%operations%and%cleanup,%including%an%oneboard%diesel%generator%and%110%volt%electricity%
system,%water%tank,%builtein%meat%rail%system%in%the%walls%and%ceiling,%and%insulation%throughout%
the% processing% and% storage% compartments.% Since% the% cooler% and% processing% sections% are%wet%
areas,% all% materials% and% electrical% fittings% are% rated% for% use% in% wet% environments.% Other%
specifications%particular%to%each%unit,% including%inside%and%outside%dimensions,%are%reflected%in%
Table% 2.% TriVan% and% SRAP% also% provide% operational% and% butcher% training% on% board% the% unit.%%
TriVan’s% training% is% provided% by% MSU% consultant% and% processing% engineer,% Bruce% Dunlop,%
member%and%coefounder%of%the%Lopez%Island%Meat%Producer%Cooperative,%which%established%the%
first% certified% MSU% in% the% country.% SRAP’s% training% is% provided% through% one% of% its% programs,%
Renewable%Harvest,%which%provides%MSU%technical%assistance%program%and%is%based%in%Ulysses,%
Nebraska% (http://www.sraproject.org/abouterenewableeharvest/);% Renewable% Harvest’s%
training%is%administered%through%its%network%of%successful%MSU%operators/butchers%around%the%
country.%%
49#
Table&2.&Comparison&of&MSU&Manufacturers&Supplier& Dimensions& Specs.&
#Lead&Time&
Unit&Cost& Shipping&& Payment&Terms&
Warranty&of&maintenance&
Training&Provided&
TriVan## 30’#(L)#x#8’6”#(W)#x#11’#(H)#
400gal#water#tank#20KW#diesel#generator#110#volt#electric#system##Meat#rail#system#
4G5#mo.#
$197,885# $890#to#Seattle#$13,000#to#HI#($13,890)total)#
50%#down#Balance#due#prior#delivery#
1#year# Free#oper.#and#butcher#training#onGboard#two#MSUs#in#WA,#tour#of#Lopez#Island#MSU#chill,#cut#and#wrap#facility,#and#visit#to#manufacturing#plant.#
Featherlite# 26’#(L)#x#8’6”#(W)#x#7’#(H)#
150gal#water#tank#20KW#diesel#generator#110#volt#electrical#system#Meat#rail#system#
G# $200,873# $5,000## G# G# No#training#provided#
SRAP# 53’#(L)#x#96”#(W)#x#16’#(H)#
Fully#equipped#used#trailer,#includes#semiGtractor#and#all#processing#equipment##
n/a# $190,000## $1/mile#from#NE#to#LA,#$1,300#$15,000#to#HI##
1/3#down,#1/3#at#shipping,#1/3#at#delivery#
No#warranty# Free#oper.#and#butcher#training#through#SRAP’s#network#of#MSUs,#likely#in#
50#
($16,300)total))
St.#Francis,#
Kansas#onG
board#Mike#
Callicrate’s#
MSU##
Brothers#
Body#and#
Equipment#
36’#(L)#x#
101”#(W)#x#
144”#(H)#
300gal#water#
tank#
120/240#VAC#
60#Hertz#3#
Phase#Power#
25#KW#diesel#
generator#set#
Meat#rail#
system#
180G
210#
days#
after#
order#
$169,995# $4,960#
from#OH#
to#
Seattle;#
$9,895#
to#HI#
($14,855)total))
$60,000#
down,#
$60,000#
base#
trailer#
complete#
$64,850#
balance#
prior#
delivery;#
net#30#
days#
1#year# No#training#
provided#
Flat#River#
Corp#
#53’#(L)#x#
8’6”#(W)#x#
14’#(H)#
Includes#
refurbished#
trailer,#250gal#
water,#hide#
puller,#electric#
splitting#saw#
and#knife#
sterilizers,#
carcass#scale#
6G9#
mo.#
$255,000
for#
trailer,#
only,#
$290,000#
with#used#
semi#
tractor#
Shipping#
to#west#
coast#
include;#
$15,000#
to#HI##
G# 1#year# No#training#
provided#
51#
The#MSU#prices#used#in#this#startup#cost#analysis#are#based#on#an#average#of#the#above#
units’# costs# and# specifications.# Capacity# and# time# limitations# were# taken# into# consideration#
when#developing#the#financial#information#and#sensitivity#analyses.##
• $210,000#to#acquire#unit#(average#of#manufacturers’#quotes;#does#not#include#truck)#
• $1,573#to#transport#unit#to#the#port#of#LA#(1,210#miles#x#$1.30)#
• $15,000#to#ship#the#trailer#to#the#Big#Island.15##
Payment# terms#are# typically#50%#up# front#with# final#payment#before#delivery,#or#oneR
third# up# front# to# order# the# unit,# oneRthird# at# halfway# building# point,# and# final# payment# at#
completion.#Sales#tax#for#the#MSU#plus#shipping#was#calculated#at#4%,#the#average#sales#tax#in#
Hawai‘i#State,# for#a#total#of#$9,063.#The#total#cost#of#the#unit#with#sales#tax#was#estimated#as#
$235,636.##
Docking(Sites(and(Miscellaneous(Supplies(The# USDARFSIS# requires# that# each# MSU# operational# site# (docking# station)# provide# an#
anteRmortem#(preRslaughter)#pen#for#live#animals#at#rest#and#in#motion.#While#this#area#may#be#
provided#by#the#livestock#producer’s#ranch#where#the#MSU#is#operating,#$5,000#is#budgeted#for#
this#expense# in# the#event# that# the#MSU#would#want# to#provide# some#sort#of#nonRpermanent#
holding#pen#that#could#be#set#up#at#each#location,#although#these#funds#could#also#be#part#of#a#
costRshare#arrangement#with#the#landowner,#given#the#improvements#become#permanent#to#eh#
property.##
FSIS#also#recommends#that#animals#be#bled#on#a#sloped#concrete#ramp#with# lines#to#a#
drain# field# or# over# a# gravel# bed# that# allows# blood# and# water# to# drain# to# prevent# pooling.#
$10,000#was#incorporated#into#this#budget#to#cover#or#offset#some#of#the#costs#of#concrete#beds#
and/or#gravel#beds#at#2#operation#sites#($5,000#per#site).#Although#the#MSU#is#built#to#include#all#
supplies# needed# for# slaughter,# an# additional# $5,000# is# included# in# startup# costs# to# cover# any#
additional#supplies#not#considered#elsewhere#in#the#budget#(such#as#trolleys#and#hooks,#aprons,#
cleaning#supplies,#etc.).#Sales#tax#calculated#at#4%#was#included#for#these#facilities#and#supplies#
for#a#total#category#cost#of#$20,800.##
15#Based#on#transport#quote#estimated#by#Matson#Navigation#Co.#Contacted#March#26,#2014.##
52#
Butcher(Training(# For#this#analysis,#we#assume#that#MSU#butcher#training#will#be#provided#by#Renewable#
Harvest# free# of# charge# for# up# to# four# people.# We# foresee# sending# two# butchers# and# two#
assistant# butchers# to# a# successful,# economically# viable# MSU# operated# by# Mike# Callicrate# in#
Kansas#for#training.#Travel#and#accommodation#costs#are#estimated#as#follows:#airfare#for#four#
people#at#$2,800#($700#per#person#for#roundtrip#travel#from#Hawai‘i#Island#to#Kansas),#lodging#
at#$1,920#($480#per#person#for#6#nights,#or#$80/person/night),#food#at#$1,400#($350#per#person#
for#1#week,#or#$50/person/day),#ground#transportation#in#Kansas#at#$200.#Total#travel#costs#for#
butcher#training#are#estimated#at#$6,320.#
HACCP(Certification(# A# comprehensive# HACCP# plan#must# be# approved# by# the# USDARFSIS# prior# to# the#MSU#
operating.#Renewable#Harvest#has#offered#to#provide#a#professional#HACCP#consulting#team#to#
help#develop# the#MSU’s#HACCP#plan# free#of# charge.# Travel# costs#will# need# to#be#provided# to#
bring#two#of#the#HACCP#consultants#to#the#Big#Island#from#Ulysses,#Nebraska#once#the#MSU#is#
onRisland.#The#HACCP#consultants#will#accompany#the#MSU#on#its#first#3#kills#and#use#this#data#to#
make# final# plan# calibrations# and# revisions# to# the# plan.# Travel# and# accommodation# costs# are#
estimated# as# follows:# airfare# for# two# people# at# $1,600# ($800# per# person# for# roundtrip# travel#
from#Nebraska#to#Hawai‘i#Island),#lodging#at#$600#($100#per#person#per#night#for#3#nights),#food#
at#$300#($50#per#person#per#day#for#3#days),#ground#transportation#on#Hawai‘i# Island#at#$200.#
Total#travel#costs#for#HACCP#certification#are#estimated#at#$2,700.##
Table(3:(Breakdown(of(MSU(Start(Up(Costs((
MSU$Startup$costs$ ##Item$ Cost$Unit%(average%of%manufacturer%quotes%listed%in%Table%2)% ##Unit# $210,000#Ground#shipping#to#port# $1,573#Shipping#to#Hawaii# $15,000#Subtotal( $226,573(Tax#(4%)# $9,063#Total:$ $235,636$## ##Docking%sites%and%misc.%supplies% ##
53#
Transportable#animal#holding#pen# $5,000#Docking#sites#prep,#concrete/gravel#beds# $10,000#Other#supplies# $5,000#Subtotal:# $20,000#Tax#(4%)# $800#Total:$ $20,800$## ##Butcher%training%% ##Training#provided#free#of#charge#by#Renewable#Harvest## $0#Round#trip#air#travel#from#Hawaii#to#Kansas#(4#people)# $2,800#Lodging# $1,920#Food# $1,400#Ground#transportation#in#Kansas# $200#Total:$ $6,320$## ##HACCP%Certification% ##HACCP#plan#development#provided#free#of#charge#by#Renewable#Harvest## $0#Roundtrip#air#travel#from#Nebraska#to#Hawaii#(2#people)# $1,600#Lodging# $600#Food# $300#Ground#transportation#in#Hawaii# $200#Total:$ $2,700$## ##TOTAL$MSU$STARTUP$COSTS$ $265,456$#
Livestock#Costs#and#Service#Fees## Initially,# the# MSU# will# try# to# subcontract# chill,# cut/wrap# services# from# a# separate#
provider#(as#discussed#in#the#Auxiliary#Recommendations#section),#while#it#explores#options#to#
construct#its#own#chill,#cut/wrap#and#retail#facility,#possibly#at#NELHA.#It#is#anticipated#that#the#
MSU#will#operate#under#this#temporary#“Phase#I”#model#for#approximately#one#year#before#its#
own#facility# is#operational.# #During#Phase# I,#producers#will#have#three#options# for#utilizing# the#
MSU’s#services:#
1. Pay# for# MSU# slaughter# services,# only;# producer# receives# eviscerated,# chilled# carcass#
(halved#or#quarted)#ready#for#custom#butchering#(appropriate#for#home#use#or#informal#
market,#i.e.#CSA#/#animalRshare#program).##
54#
2. Pay#MSU#for#slaughter#services#and#work#with#a#separate#processor# for#chill,#cut/wrap#
services# (i.e.# Kulana# Foods,# if# chill# space# available;# private# butcher# on# island);# receive#
USDA#certified#meat,#already#portioned#and#ready#for#commercial#sale.#
3. Wholesale# live#animal# to#MSU,#which#slaughters#and#sells# the#eviscerated#carcass# to#a#
separate#chill,#cut/wrap#and#retail#facility#for#final#sale#(i.e.#KTA;#restaurant).#
#
Once#the#MSU’s#own#chill,#cut/wrap#and#retail#facility#is#operational,#Phase#I#will#be#replaced#
by#Phase#II,#and#while#the#first#service#option#outlined#above#will#still#be#available#for#producers#
not#looking#to#sell#their#meat#commercially,#the#second#and#the#third#options#will#be#replaced#
by#the#following:#
2.## Pay#MSU# for# slaughter# as# well# as# chill,# cut/wrap# services# and# receive# USDA# certified#
meat,#already#portioned#and#ready#for#commercial#sale#per#custom#order.#
3. Wholesale#live#animal#to#MSU,#which#slaughters,#chills,#cuts/wraps#and#retails#the#USDA#
certified#meat#under#a#unified#brand.##
Carcass(Yield(Assumptions(Meat# processing# costs# are# generally# based# on# the# animal# weight# or# a# flat# fee# per#
head/species.#Average#live#and#dressed#weights#for#beef,#pig,#and#sheep/goats#are#displayed#in#
Table#4#below.#Data#for#cattle#and#hogs#are#based#on#the#most#recent#USDA#Census#for#Hawai‘i#
State#slaughter#from#January#to#June#2013,#and#sheep#and#goat#data#are#based#on#the#Livestock#
Marketing# Information# Center’s# (LMIC)# weekly# price# and# production# estimates# for# the# week#
ending# 01/25/14# (http://www.lmic.info/priprod/pandp.html).# The# LMIC’s# data# is# based# on#
various#USDA#Agricultural#Marketing#Service#reports.#Dressed#weight#refers#to#the#weight#once#
the# carcass# has# been# portioned# into# meat# cuts,# or# the# “cut# and# wrapped”# weight.# This#
percentage# depends# on# many# variables# such# as# how# lean# or# fat# the# animal# was,# muscling,#
whether#cuts#are#bone#in#or#boneless,#the#amount#of#fat#left#in#the#cuts,#and#the#leanness#of#the#
ground#meat#product#(Wulf,#1999).#$
55#
(
Table(4:(Average(Live(and(Dressed(Animal(Weights,(By(Species%%Animal$species$ Average$live$weight$ Average$dressed$weight$ Percent$meat$
Cattle# 1,116#lbs# 623#lbs# 56%16#
Pigs# 243#lbs# 182#lbs# 75%#
Sheep/Goats# 136#lbs# 68#lbs# 50%#
#
Wholesale(Price(Slaughter# and# chill,# cut/wrap# services# are# generally# related# to# the# wholesale# animal#
price,# which# varies# per# livestock# species# and# is# either# calculated# as# a# flat# rate# or# as# animal#
weight,# for#which#there#are#two#main#methods:#“on#the#hoof”#refers# the# live#weight# for#each#
animal,#while# “Hot# Carcass#Weight”# refers# to# the#weight# just# prior# to# chilling;# both# units# are#
represented# as# $/lb.# For# the#MSU# to#be# economically# viable# and# appealing# for# producers,# its#
services# must# be# price# competitive# with# those# offered# by# the# island’s# two# existing#
slaughterhouses.# The# current#prices# for# slaughter#and# chill,# cut/wrap# services#at#Hawai‘i#Beef#
Producers# (which# only# slaughters# cattle)# and# Kulana# Foods# are# based# on# different# formula,#
displayed#in#Table#5#below.#Slaughter#cost/animal#is#based#on#average#weight/species#(Table#2).#
Table(5:(Current(Meat(Harvesting(Prices(on(Hawai‘i(Island%%(Data(based(on(personal(communication(with(slaughterhouses,(April(2013)%
Livestock$species$
SlaughterKhouse$
Pricing$method$$
Price/lb$ Slaughter$cost/animal$
Chill,$cut/wrap$cost$
Total$cost$
Cattle# Hawai‘i#Beef#Producers#
Hot#Carcass#Weight#
90#cents# $722.70# Included# $723#
Cattle## Kulana# On#hoof# 26#cents# $347.62# $252# $600#
Pig## Kulana# On#hoof## 56#cents# $160# $150# $310#
Sheep/#goat#
Kulana# Flat#rate# n/a# $45# $60# $105#
16#According#to#CTAHR#Extension#Livestock#Specialist,#Michael#DuPonte,#average#cattle#meat#percentages#range#from#59R63%#in#Hawai‘i#State.##
56#
Proposed#prices#for#the#Hawai‘i#Island#MSU#outlined#in#Table#6#and#designed#to#be#price#
competitive#with# those#offered#by# the# two#existing# slaughterhouses;# the# pricing# scheme#was#
based#on#that#developed#by#the#Puget#Sound#Meat#Packers#Cooperative#(PSMPC),#benchmarked#
as# an# economically# successful# deployment# of# an# MSU.# As# PSMPC# is# a# producerRowned#
cooperative,# its#pricing#model# is# tied# to#membership#–# though#nonRmembers#are#also#able# to#
utilize#the#unit’s#slaughter#services#for#a#slightly#higher#price.#The#prices#listed#were#not#marketR
adjusted#to#reflect#the#higher#operating#costs#in#HI.#
Table(6:(Proposed(Hawai‘i(Island%MSU(Slaughter(Prices(((Adapted(from(PSMPC(pricing(model:(http://www.pugetsoundmeat.com/pricelist.html)#
Producer$Stock$Class$ Member$ NonKmember$
Cattle#<30#months# $110## $140##
Cattle#>#or#=#30#months# $130## $160##
Cattle#>#or#=#1,000#lbs#HCW# $130## $160##
Pigs#<#275#lbs#HCW# $70## $90##
Pigs#>#or#=#275#lbs#HCW# $110## $135##
Sheep#<#100#lbs#HCW# $50## $70##
Sheep#>#or#=#100#lbs#HCW# $70## $90##
Goats#<#100#lbs#HCW# $50## $70##
Goats#>#or#=#100#lbs#HCW# $70## $90##
Hourly# Processing# Rate,# if#
additional#time#is#required17# $140## $160##
# HCW# refers# to#Hot#Carcass#Weight# and# is# defined#by#PSMPC#as# the#unRchilled# carcass#
weight# taken#shortly#after#slaughter#and# following#removal#of# the#hide,#head,#gastrointestinal#
tract#and#internal#organs.#PSMPC#has#developed#the#following#ratio#to#determine#HCW:#
• Approximately#50R55%#of#the#live#weight#for#cattle,#sheep,#and#goats##
• Approximately#65R70%#of#the#live#weight#for#pigs#
17#The#hourly#processing#rate#is#applied#If#the#animal#brought#in#is#unruly,#dirty,#or#presented#in#an#otherwise#
unsatisfactory#condition#requiring#the#additional#time#of#MSU#staff#and#the#USDA#inspector.##
57#
PSMPC’s#ratios#are#based#on#animal#weights#in#Washington#State,#and#should#ultimately#
be#adapted#to#the#average#ratios#on#Hawai‘i#Island#–#which#are#provided#in#Table#4#above#and#
differ#from#those#in#WA#due#to#a#range#of#environmental,#cultural,#and#economic#factors.#Other#
variables#impacting#the#ratio#include#the#age,#breed,#sex#and#body#condition#of#the#animal.##
The#PSMPC#prices#listed#are#minimums.##The#final#price#may#be#adjusted#onRsite#at#the#
time#of#slaughter.##Adjustments#to#prices#are#based#on#any#additional#processing#time#required#
at# the# listed# hourly# rate# (Table# 6)# and# may# include# charges# for# USDA# overtime.# Animals#
presented# for# slaughter# in# satisfactory# condition# are# inspected# and# accepted# by# the# USDA#
inspector.# #Animals#deemed#to#be# in#unsatisfactory#condition#may# incur#additional#processing#
fees#at#the#listed#hourly#rate#and#a#$20/animal#penalty#or#may#be#refused.##Extremely#large#or#
unruly#animals#may#also#be#refused.##The#animal#owner#is#responsible#for#prompt#removal#and#
hauling#of#any#animal# that,# for#any# reason#whatsoever,# cannot#be#slaughtered.#Prices# include#
carcass#hauling#to#the#designated#partner#chill,#cut/wrap#facility.#No#shows#(less#than#24#hours#
notice)#are#charged#50%#of#scheduled#charges.#
Operating#Costs#Operating# costs# are# the# costs#of# running# the#MSU.#With# the#exception#of# the# salaried#
manager#and#butchers#and#auto#insurance,#the#operating#costs#are#variable#depending#on#the#
number#of#days# the#unit# is# in#operation#as#well# as# the# slaughter# and#processing# volume.#The#
salaried#labor#and#auto#insurance#are#fixed#costs#not#dependent#on#how#often#and#how#much#
the#unit#is#used.##
Labor(Labor#is#the#most#significant#operating#cost.#It#is#assumed#that#the#MSU#would#need#staff#
consisting#of#one#partRtime#manager,#two#full#time#butchers#and#one#to#two#assistant#butchers,#
depending# on# MSU# capacity.# Additionally,# overtime# salary# was# written# in# for# the# USDA#
inspector#at#one#hour#per#kill#day.##
%
%
%
58#
Manager%
The#MSU#manager#would#be#the#person#responsible#for#coordinating#when#and#where#
the# unit# will# go.# Additionally,# this# person# would# handle# all# communications# with# the# USDA#
(including#scheduling#slaughter#days#with#the#USDA#inspector)#and#ensure#that#the#HACCP#plan#
is# being# followed.# Initially,# this# position# will# be# salaried# halfRtime,# at# a# base# rate# of# $20/hr#
($20,000#per#year),#assuming#that#it#will#take#some#time#for#the#MSU#to#operate#at#full#capacity.#
This#position#could#be#increased#to#fullRtime#in#the#future#if#funds#allow.#It#may#be#useful#if#this#
position#is#given#to#someone#with#a#vested#interest#in#the#MSU,#such#as#a#coop#member,#in#the#
event#that#the#requirements#of#the#position#become#more#than#part#time#before#full#time#wages#
become#available.#Future#responsibilities#may#also#include#marketing.##
%
Butchers%and%butcher%assistants%
In#order#for#the#MSU#to#operate#at#full#capacity,#two#fullRtime#professional#butchers#and#
one#to#two#partRtime#assistant#butchers/drivers#will#be#needed.#The#fullRtime#butchers#will#be#
paid#a# salary#of#$50,000#per#year,#accounting# for#eight#hours#of# labor# five#days#per#week,#50#
weeks#per#year#(at#a#base#rate#of#$25/hr)#–#though#initially#the#unit#will#only#operate#three#to#
four# days# per# week.# During# workdays,# however,# more# than# eight# hours# may# be# needed# to#
ensure# the# quality# of# the# operation,# including# maintaining# a# humane# standard# of# animal#
treatment#before#and#at#the#time#of#slaughter#as#well#as#the#quality#of#the#end#product#and#the#
cleanliness#of#the#unit.#Despite#the#MSU’s#gradual#buildup,#two#butchers#will#be#required#from#
the# beginning# rather# than# one,# to# ensure# that# a# backup# is# always# available# –# given# the#
importance#of#having#a#professional#butcher#onRsite#during#every#kill#day.##
The# assistant# butchers/drivers# will# be# paid# $18/hr# and# will# only# be# paid# for# hours#
worked.#Employees#in#this#position#will#be#required#to#have#a#CDL#so#they#can#be#in#charge#of#
driving#the#unit#to#operation#sites#as#well#as#taking#care#of#issues#such#as#washing#the#MSU#pad,#
assisting#with#offal# removal# and#disposal,#monitoring# the# cooler,# truck#maintenance,# and#any#
other#onRsite#issues#that#arise.#It#is#assumed#that#the#assistants#would#be#paid#for#ten#hours#for#
each#kill#day#to#include#drive#and#slaughter#time.##
59#
It# is# necessary# to# offer# a# good# salary/wage# to# attract# the# level# of# skill,# training# and#
reliability#desired# in# the#MSU#butchers# and#assistants.#While# reliable# labor# can#be#difficult# to#
find#anywhere,#the#success#of#the#MSU#will,#in#large#part,#depend#on#the#key#butcher#positions#–#
since#their#availability#and#performance#will#impact#the#ability#of#the#MSU#to#meet#its#slaughter#
schedule#with#the#ranchers#and#USDA#inspector.##
%
USDA%inspector%
Official# slaughter# establishments# in# the#US# are#provided#with#USDA# inspection# service#
without# charge# for# up# to# five# consecutive# eightRhour# days.# However,# if# the# unit# goes# into#
overtime,#the#facility#will#be#charged.#For#this#example,#it#was#assumed#that#there#would#be#one#
hour#of#overtime#accrued#by#the#USDA#inspector#each#kill#day#based#on#50#weeks#of#operation#
per#year.# #An#overtime#rate#of#$82#per#hour#was#used#for#this#example,#based#on#information#
presented#by#the#USDARFSIS#(USDARFSISb,#2010).#
%
Taxes%and%benefits%
Taxes# and# benefits# for# the# manager,# fullRtime# butchers# and# part# time#
assistant(s)/driver(s)#are#calculated#at#23%#of#total#annual#salary.#
Supplies(Miscellaneous# item# such# as# cleaning# supplies,# paper# towels,# and# plastics# bags# are#
estimated#as#$20#per#kill#day.#
Utilities(%
Propane%%
Propane#for#the#MSU’s#hot#water#heater#is#estimated#as#$20#per#kill#day.##
%
Electricity%%
Electricity#for#the#MSU’s#air#conditioner,#fans,#and#lights#is#estimated#as#$25#per#kill#day.#(
%
%
60#
Phones%
% Cellular# phones# will# be# provided# to# the# two,# fullRtime# butchers# as# part# of# their#
employment# package,# since# it# is# expected# that# they# will# need# to# coordinate# slaughter#
appointments#via#cell#phone#with#producers#and#the#USDA#inspector.#This#cost#is#estimated#at#
$150# per# month,# for# two# smart# phones.# Having# wireless# internet# access# on# the# phone# is#
important,#because#the#butchers#may#need#to#refer#to#the#MSU#website#to#determine#the#most#
updated#slaughter#schedule#based#on#internet#appointments.###
Other#SemiHtrailer%truck%
A#semiRtrailer#truck#will#be#used#to#transport#the#unit#to#different#locations#as#it#moves#
to#various#operating#sites#around#the#island.#This#truck#could#be#leased#on#a#monthRtoRmonth#or#
annual# basis,# purchased# new# or# used,# or# the# service# contracted# out# to# a# separate# trucking#
company,#such#as#Conan’s.# #A#price#estimate#for#using#Conan’s#services#is#$200#per#move#day,#
estimated#at#once#per#week#when#operating#3#days/week,#and#twice#per#week#when#operating#
4#or#5#days/week.#(
%
Auto%insurance%
Auto# insurance# for# the#MSU# and# refrigerated# nurse# truck#was# estimated# as# $200# per#
month,#12#months#per#year.#
%
Machinery%and%truck%repairs%
Machinery# and# truck# repairs#were# estimated# as# $50#per# kill# day#based#on#Cowee#and#
Harris#(2011);#if#the#unit#is#expected#to#travel#greater#distances#than#the#estimated#80#miles#per#
kill#day,#this#estimate#should#be#increased.#
%
Fuel%
Fuel#costs#are#based#on#the#assumption#that#the#MSU#will#travel#up#to#80#miles#on#each#
kill#day#with#gas#mileage#estimated#at#5#miles#per#gallon#for#a#total#consumption#of#16#gallons#
per#kill#day.#Fuel#was#calculated#at#a#cost#of#$4.00#per#gallon,# the#average#diesel# fuel#cost# for#
61#
Hawai‘i# for#February#13,#2014# (US#EIA#website,#accessed#February#13#2014).#A# total#of#$64# is#
budgeted#for#fuel#per#kill#day.#(
%
Annual%MSU%Lease%Fee%
% Assuming#the#MSU#will#be#owned#by#a#State#agency#such#as#the#Hawai‘i#Department#of#
Agriculture# or# a# local# community# nonRprofit# organization# such# as# Big# Island# Resource#
Conservation#&#Development#Council,#the#MSU#management#entity#(i.e.#producer#cooperative)#
may#pay#an#annual# lease# fee# to#use# it.# The# lease# rate#used# in# this# analysis# is# 3%#of# the#MSU#
appraisal# value# of# $175,000,#which#was# based#on# the# desired# rate# of# return# provided#by# the#
Hawai‘i#State#Department#of#Agriculture#for#similar#government#facilities#leased#for#private#use.##
%
Overhead%
Overhead#includes#such#costs#as#internet#and#legal#and#accounting#fees,#and#is#estimated#
as#5%#of#annual#operating#costs.#
Breakeven#Analysis#
To#calculate#perRhead#profit#and#breakeven#production#levels#for#each#type#of#livestock,#
all#parameters#of#operation#were#set#to#their#maximums,#assuming#three,#four,#and#five#days#of#
MSU#operation#at# initial#capacity.#This#means#up#to#10#head#of#cattle#may#be#slaughtered#per#
day,# 12# head# of# pigs,# or# 16# head# of# sheep# or# goats.# At# these# levels,# total# annual# costs# of#
operation#for#the#MSU#operating#50#weeks#per#year#would#be#$223,462#at#three#kill#days/week,#
$256,422# at# four# kill# days/week,# and# $279,722# at# five# days/week.# See# Appendix# C# for# full#
operating#cost#spreadsheets.##For#simplification#purposes#and#assuming#the#unit#would#provide#
slaughter# services# to# both# members# and# nonRmembers# and# handle# animals# of# varying#
weight/age,# slaughter# revenues#were#calculated#as# the#average#of#member#and#nonRmember#
service# fees# and# animal# weight# groups# (refer# to# Table# 6).# Using# these# estimations,# average#
slaughter#revenues#per#species#was#calculated#at#$135/head#for#cattle,#$102/head#for#pigs,#and#
$70/head#for#sheep/goats.#Additional#revenues#of#$10#per#head#(Nudell#and#Petry,#1997)#were#
calculated# for#animal#byproducts,# for#which# there#are#various#market#opportunities#discussed#
62#
later#in#this#section#(i.e.#for#hides,#bones,#organs).#Given#these#revenue#figures,#maximum#sales#
per#day#per#species#are#provided#in#Table#9.#
Table(7:(Maximum(Revenues(per(Species/Day(Species$ Average$
revenues/head$Maximum$head/day$
Total$slaughter$revenues$
Maximum$byproduct$sales$($10/head)$
Maximum$ total$revenues/day$
Cattle# $135# 10# $1,350# $100# $1,450##
Pig# $102# 12# $1,120 $120# $1,344##
Sheep/Goat# $70# 16# $1,224 $160# $1,280##
#
Operating#three#days#per#week#at#full#slaughter#capacity#with#one#day#for#cattle,#one#day#
for#pigs,#and#one#day#for#sheep#or#goats#(on#alternating#weeks),#estimated#slaughter#revenues#
generated# would# come# to# $203,700# –# which# is# $19,762( below# the# annual# operating# budget#
($223,462),#and#therefore#not#economically#viable#(Table#8).##
Table(8:(Hawai‘i(Island(MSU(Breakeven(Volumes,(at(3(Days/Week(Capacity%%MultiKspecies$operation$ Slaughter$revenues$
per$day$Byproduct$revenues$per$day$
Total$revenues$per$day$
Day#1#–#Cattle# $1,350# $100# $1,450##
Day#2#–#Pigs# $1,120 $120# $1,344##
Day#3#–#Sheep#or#Goats#
(alternating#weeks)#
$1,224 $160# $1,280##
Total$Revenues$per$year$ $184,700$ $19,000$ $203,700$#
Increasing#operations# to# four#days/week,# the#unit#would#breakeven#with# two#days# for#
cattle,#one#day#for#pigs,#and#one#day#for#sheep#or#goats#(on#alternating#weeks),#with#estimated#
slaughter# revenues# at# $276,200# –# or# $19,778( above# its# annual# operating# budget# ($256,422)#
(Table#9).#Operating#the#unit#at#four#days/week#with#two#days#for#pigs,#one#day#for#cattle,#and#
one# day# for# sheep# or# goats# (on# alternating# weeks)# –# would# also# bring# a# slight# surplus,# with#
estimated#slaughter#revenues#of#$270,900#–#$14,478(above#projected#operating#costs;#as#well#
63#
as#two#days#for#sheep#and/or#goats,#one#day#for#cattle#and#one#day#for#pigs#–#with#revenues#of#
up#to#$267,700#R#$11,278(above#projected#operating#costs.##
Table(9:(Hawai‘i(Island(MSU(Breakeven(Volumes,(at(4(Days/Week(Capacity%(MultiKspecies$operation$ Slaughter$revenues$
per$day$Byproduct$revenues$per$day$
Total$revenues$per$day$
Day#1#–#Cattle# $1,350# $100# $1,450##
Day#2#–#Cattle# $1,350# $100# $1,450##
Day#3#–#Pigs## $1,120 $120# $1,344##
Day#4#–#Sheep/Goats#(alternating#weeks)#
$1,224 $160# $1,280##
Total$Revenues$per$year$ $252,200$ $24,000$ $276,200$#
Increasing# operations# to# five# days/week# at# full# capacity,# the# unit# could# generate# an#
estimated#up#to#$343,400#in#slaughter#revenues,#with#two#days#for#cattle,#two#days#for#pigs,#and#
one#day# for#sheep/goats#–# #$63,678#above# its#annual#operating#budget# ($308,702),#and#reach#
economic# viability# with# a# substantial# profit# margin# (Table# 10).# The# unit# could# also# generate#
smaller#profit#margins#and#still#be#economically#viable#with#two#days#for#sheep#and/or#goat,#two#
days#for#cattle,#and#one#day#for#pigs#($345,400#–#$36,698(above#projected#operating#costs);#or#
with# two#days# for# sheep# and/or# goats,# two#days# for# pigs# and#one#day# for# cattle# ($334,900# –#
$26,198(above#projected#operating#costs);#or%
Table(10:(Hawai‘i(Island(MSU(Breakeven(Volumes,(at(5(Days/Week(Capacity%%MultiKspecies$operation$ Slaughter$revenues$
per$day$Byproduct$revenues$per$day$
Total$revenues$per$day$
Day#1#–#Cattle# $1,350# $100# $1,450##
Day#2#–#Cattle# $1,350# $100# $1,450##
Day#3#–#Pigs## $1,120 $120# $1,344##
Day#4#–#Pigs## $1,120 $120# $1,344##
Day#5#–#Sheep/Goats#(alternating#weeks)#
$1,224 $160# $1,280##
Total$Revenues$per$year$ $313,400$ $30,000$ $343,400$
64#
According#to#these#calculations,#the#MSU#would#have#to#operate#4#days#per#week#with#
any#mix#of#species#to#achieve#baseline#economic#viability,#and#the#highest#profit#margin#in#that#
scenario#could#be#realized#by#providing#slaughter#two#days#per#week#for#cattle,#one#day#for#pigs,#
and# one# day# for# sheep# or# goats.# Table# 11# shows# an# annual# profit# &# loss# statement# for# this#
scenario.#Additional#economic#calculations#can#be#explored#with#the#online#MSU#cost#calculator,#
developed# by# Cooperative# Extension# specialist,# Kathleen# Painter# (2008):#
http://www.extension.org/pages/17897/costRcalculatorRforRaRmobileRslaughterR
unit#.UtilF2SwIvQ.##
Table(11:(Annual(Profit(&(Loss(Statement(((
GROSS$INCOME$Total$Units$
Revenues$per$unit$ Total$value/cost$
Cattle#($135/head)# 1000# $135## $135,000.00#Pig#($102/head)# 1200# $102## $122,400.00#Sheep/goat#($70/head)# 800# $70## $56,000.00#Byproducts#($10/head)# 3000# $10## $30,000.00#TOTAL%GROSS%INCOME% %% %% $343,400.00%## ## ## ##OPERATING$COSTS$ ## ## ##Labor:% ## ## ##Manager## ## ## $20,000.04#Butcher#1# ## ## $50,000.04#Butcher#2# ## ## $50,000.04#Assistant#butcher## ## ## $41,400.00#USDA#Inspector## ## ## $18,860.00#Payroll#taxes#and#benefits# ## ## $37,122.03#Total(labor(costs( ## ## $197,382.11(## ## ## ##Supplies:% ## ## ##Cleaning#supplies,#plastic#bags,#paper#towels# ## ## $4,600.00#Total(supply(costs( ## ## $4,600.00((( ## ## ##Utilities:% ## ## ##Propane#for#hot#water#heater## ## ## $4,600.00#Electricity#for#lights#&#air#conditioner## ## ## $5,750.00#Phones# ## ## $1,800.00#Total(utility(costs( ## ## $12,150.00(
65#
## ## ## ##Other%MSU%Costs:% ## ## ##Semi#truck#rental# ## ## $18,400.00#Vehicle#Insurance# ## ## $2,400.00#Maintenance/Repairs## ## ## $11,500.00#Fuel## ## ## $14,720.00#MSU#Annual#Lease#Fee## ## ## $5,250.00#Overhead## ## ## $13,320.00#Total(other(MSU(costs( ## ## $65,590.00#(( ## ## ##TOTAL%OPERATING%COSTS%% %% %% $279,722.21%%% %% %% %%NET$PROJECTED$RETURNS$ $$ $$ $63,677.79$#
Additional#sources#of#income#may#be#generated#by#converting#MSU#waste#products#into#
valueRadded#products,# such#as#processing#bones,#blood#and#offal# into# fertilizer,# compost,#bioR
energy,#and#feed#for#livestock,#fish,#and/or#pets.#Such#products#represent#growing#industries#in#
Hawai‘i,#where#the#majority#of#farm#inputs#are#currently#imported#and#high#demand#exists#for#
local#alternatives.##According#to#successful#MSU#operator#Mike#Callicrate#of#Ranch#Foods#Direct#
in#CO,#selling#slaughter#byproducts#can#“make(the(difference(between(breaking(even(or(not,(as(
these(items(can(be(worth(a(lot(in(the(right(markets”#(NMPAN#Webinar#Panel,#September#2013).#
Callicrate#sells#his#operation’s#hides#in#Kansas#for#$40#each,#and#saves#and#sells#the#heart,#liver,#
tongue#and#tail,#while#composting#the#remaining#inedible#parts#in#the#field#–#providing#excellent#
soil#amendments#for#his#ranch.#Given#that#the#Hawai‘i#Island#MSU#could#produce#20#cow#hides#
per#week#when#operating#4R5#days#per#week,#the#unit#could#potentially#add#an#additional#$600#
in# revenues# per# week# based# on# Callicrate’s# prices# (above# that# accounted# for# in# the# current#
breakeven# calculations,# which# only# include# $10# revenues/head# for# byproduct# sales),# or# an#
additional#$30,000#per#year.#CTAHR#Extension#Livestock#Specialist,#Michael#DuPonte,#reiterated#
that#most#commercial#slaughterhouses#make#most# if#not#all#of#their#profit#by#selling#slaughter#
byproducts# to# lucrative# markets# such# as# medical# school# laboratories.18# Such# market#
opportunities#deserve#further#exploration.(
18#Personal#communication#with#Michael#DuPonte.#March#24,#2014.##
66#
VII.$Ownership$and$Organizational$Structures$$MSUs# can# be# owned# and# operated# by# various# types# of# organizations.# Existing# units#
around# the# country# are# operated# by# producer# cooperatives,# local# nonprofit# organizations# or#
government# agencies,# and#private#businesses# –# such# as# a# single# rancher#who#makes# the#unit#
available# to# other# area# producers.# Current# ownership# options# under# consideration# for# the#
Hawai‘i# Island# MSU# include# ownership# by# either# the# Big# Island# Resource# Conservation# and#
Development# (BIRC&D),# a# countyRbased# nonprofit# organization,# or# the# State# of# Hawai‘i.# A#
producerRowned#entity# could# then#be#developed# to#manage#and#operate# the#unit,# as#well# as#
leasing# the# MSU# from# its# owner,# staffing/training# employees# and# (eventually)#
marketing/branding# its# products.# Some# organizational# structures# to# be# considered# for# a#
producer#entity#include:#
Producer#Cooperative##
A#cooperative#is#a#forRprofit#business#entity#that#is#memberRowned,#memberRbenefited,#
and#memberRcontrolled,# meaning# the# same# people# own# the# business# as# use# its# products# or#
services.#The#producerRowners#of#a#cooperative#(coop)#capitalize#and#utilize#the#business,#often#
eliminating# the# costs# of# a#middleman#or# accessing# services# that#were# previously# unavailable;#
they# may# also# scale# up# product# volume# and# enhance# consistency# or# quality# for# collective#
marketing.#Coops#are#run#like#other#business#entities,#governed#by#a#Board#of#Directors#elected#
by# the# membership.# The# Board# of# Directors# set# policy# and# hire# managers# to# oversee# the#
employees# and# dayRtoRday# operations.# Coops# are# also# democraticallyRcontrolled,# operating#
through#one#memberRone#vote.#Coops#provide#their#members#with#benefits#such#as#access#to#
services,#discounted#member#prices,#and#the#allocation#of#business#profits#based#on#respective#
member#usage.##
Coop#members#may#finance#startup#and#operating#costs#through#a#variety#of#methods.#
One# option# is# through# the# sale# of# stock# –# the# original# equity# buyRin,# which# coop# members#
purchase#to#join#the#organization.#This#differs#from#corporations,#as#each#member#holds#exactly#
one# share# of# common# stock.# Another# financing# method# is# for# members# to# make# a# direct#
financial# contribution# through# annual# membership# fees.# # A# third# method# is# for# the# coop# to#
67#
withhold# a# portion# of# its# net# earnings# from# coop# members# for# reinvestment# back# into# the#
organization,#tracked#in#their#capital#accounts.#
Cooperatives# can# also# issue# preferred# stock# for# capital# improvements# or# startRup.#
Preferred#stock#is#for#nonRvoting#nonRmembers#to#invest#in#the#business.#Return#is#capped#at#8%#
by#federal#law#and#is#considered#patient#capital.#Preferred#stock#owners#receive#interest#before#
patronage#dividends#are#distributed#annually#and,#if#the#coop#ceases#to#exist,#are#compensated#
first.#The#USDA#also#has#several#grant#programs#aimed#specifically#for#cooperatives.#Coops#can#
also#apply#for#shortRterm#loans#to#cover#operating#costs#during#the#first#year#of#operation.#These#
are# acquired# through# the# Farm#Credit# System#and# the#National# Cooperative#Bank.# LongRterm#
credit,# if# needed# for# facility# purchase,# is# also# available# through# FederalR# and# StateRsponsored#
credit#programs,#such#as#USDA#Rural#Development,#Cobank,#St.#Paul#Bank#for#Cooperatives,#and#
National#Cooperative#Bank#(Curtis#et#al.,#2007).###
Coops#are#taxed#once,#not#twice# like#corporations.#Coops#members#pay# income#tax#on#
patronage#dividends,#but#the#cooperative#does#not#pay#tax#on#them#under#subchapter#T.#They#
provide#a# layer#of# legal#protection#for#their#members.#The#member#can#only#be#sued#for#their#
investment#in#the#coop,#not#for#farm#or#personal#assets.#
C#Corporation#This# is# the# traditional# form# of# a# business# entity# that# provides# limited# liability# to# its#
owners# and# shareholders,# meaning# that# their# personal# assets# are# protected.# Unlike# a# sole#
proprietorship#or#partnership,#a#C#Corp#exists#as#a#separate#legal#entity,#and#therefore#is#taxed#
separately#from#its#directors#and#shareholders.##
S#Corporation#These# organizations# are# C# corps# that# have# elected# to# file# for# S# Corp# tax# status,#which#
means#it#is#granted#“pass#through”#taxation#because#all#of#the#corporation’s#profits#are#passed#
on# to# the# shareholders# in# the# form# of# dividends,# so# there# is# no# additional# taxation# at# the#
corporate#level.#Another#advantage#to#the#S#Corp#is#that#its#directors#may#pass#business#losses#
through#to#their#personal#income#tax#return.#The#main#disadvantage#is#that#the#S#Corp#may#not#
have#more#than#100#shareholders.#$
68#
Limited#Liability#Company#(LLC)#
The#LLC#is#more#flexible#and#less#formal#than#the#corporation#and#subject#to#different#tax#
laws.# It# is# a# business# ownership# structure# that# provides# limited# liability# to# its# owners,# called#
members.##
#
Based# on# this# information,# the# most# promising# option# for# the# operation# and#
management# of# the# MSU,# is# the# development# of# a# producer# cooperative# business,# formed#
specifically# to#manage# the# daily# operations# of# the#MSU# as#well# as# to# lease# the# unit# from# its#
owner,#staff/train#employees#and#(eventually)#market/brand#its#products.#A#cooperative#model#
is# justified# as# no#private# individual# has# stepped# forward# to# take# all# the#business# risk.# For# the#
Hawai‘i#Island#MSU#to#be#viable,#it#appears#that#cooperation#will#be#needed#for#local#producers#
to# realize# economies# of# scale# through# vertical# integration.# Already,# some# Hawai‘i# producer#
groups# and# individuals# have# successfully# cooperated# to# obtain# a# consistent# supply# of# high#
quality#meat#–#helping#local#producers#gain#more#power#in#the#local#market#place#by#acting#in#a#
unified# manner# (Cox# and# Bredhoff,# 2003).# The# Hawai‘i# Cattle# Producers# Cooperative,# a#
statewide# organization,# assists# ranchers# in# marketing# their# cattle,# while# both# Moloka`i# and#
O‘ahu# slaughterhouses# are# operated# cooperatively.# A# cooperative# organizational# structure#
would# also# ensure# the# unit’s# services# remain# available# to# all# Hawai‘i# Island# ranchers# –# both#
members#and#nonRmembers#–#with#varying#price#schemes#appropriate#for#each#user#category.#
Importantly,#island#producers#may#need#cost#incentives#to#use#the#MSU#initially#and#low#barriers#
to#investment,#such#as#discounted#slaughter#service#fees#along#with#modest#initial#membership#
fees.#Other#price# incentives#may#be#developed#over# time#as# the#business#model#proves# itself.#
Time# must# also# be# given# for# producers# to# grow# their# herds.# Appendix# D# provides# sample#
organizational#documents#for#the#producerRowned#entity,#referenced#with#permission#from#the#
Puget#Sound#Meat#Producers#Cooperative#and#the#Kaua‘i#Meat#Producers#Association.##
69#
VIII.$Summary$and$Recommendations$
Producer#Interest#and#Supply#
Summary%
• There# is# a# clear# need# on# Hawai‘i# Island# for# slaughter# capacity# targeting# small# and#
medium# size# ranchers#with# a# variety# of# animals# in# addition# to# cattle# including# sheep,#
goats,#and#pigs.#
• Producer# survey# results# show# that# 77%# of# producers# are# unsatisfied# with# current#
slaughter#options#and#91.5%#are#interested#in#utilizing#an#MSU.#
• Producers# indicated# that# if# an# MSU# were# currently# available,# they# would# utilize# its#
services#for#processing#a#total#of#399#cows,#695#sheep#and#goats,#and#441#pigs.
• Additional# services# that# producers# would# like# to# obtain# from# an# MSU# producer#
organization# (i.e# coop)# in# addition# to# slaughter# (91%)# and# chill,# cut# and#wrap# services#
(86)%,# include# marketing# and# sales# (54%)# and# purchasing# feed# (31%);# 82%# of# those#
desiring# cooperative# feed#purchasing# are# cattle#operations,# highlighting# the# significant#
challenge#of#high#feed#prices#for#cattle#ranchers#on#the#island.
• Producers#anticipate#that#having#an#MSU#on#Hawai‘i#Island#would#impact#their#operation#
in# the# following# ways:# increase# production# and# herd# size# (46%),# finish# more# animals#
locally#and#reduce#cattle#weanRoff#exports#(40%),#and#produce#more#specialty#grassRfed,#
natural#products#(20%).
• 69%#of#producers#(24)#expressed#a#willingness#to#invest#in#the#MSU#and#an#additional#8#
producers#(23%)#said#they#would#consider#investing#in#it.
• Overall,#24#producers#have#committed#MSU#investments#of#$40,750#to#$63,500.#
• 94%#of#producers#surveyed#want#to#participate#in#further#discussions#about#an#MSU,#and#
77%#said#they#would#consider#serving#on#an#MSU#producer#steering#committee.
Recommendations%
• Target#MSU# services# to# small# and#medium# size# ranchers# raising# a# variety# of# livestock#
species;#currently#only#one#commercial#slaughter#facility#(Kulana#Foods#in#Hilo)#provides#
USDARcertified#slaughter#for#animals#other#than#cattle.#
70#
• Given#the#increasing#concentration#of#small#and#medium#size#meat#producers#on#Hawai‘i#
Island,# producer# cooperation#will# be# required# to# obtain# the# consistent# supply# of# high#
quality# meats# needed# to# capture# a# larger# share# of# the# local# market;# thus,# the# MSU#
should#work#with#producers#to#establish#consistency#in#product#quality#and#quantity.(
• Work# with# CTAHR# to# support# the# development# of# economically# viable# piggeries# onR
island,#as#CTAHR#extension#agents#are#already#working#on#piggery#operational/technical#
enhancements# and# this# represents# an# emerging# source# of# supply# with# high# market#
demand.#(
• Work# with# other# island# efforts,# such# as# Waimea# Nui,# to# develop# a# more# affordable#
source#of#livestock#feed,#especially#for#cattle#producers.#(
• Maintain#the#momentum#generated#at#the#three#islandRwide#producer#meetings#in#July#
and#September#2014#by#notifying#producers#of#the#survey#results#and#organizing#a#follow#
up# meeting# to# establish# a# producer# steering# committee# to# continue# leading# MSU#
development#efforts#on#Hawai‘i#Island.(
Consumer#Demand#and#Marketing#
Summary%
• The#majority#of#the#island’s#meat#demand#is#currently#met#by#imported#sources,#which#
could#be#substituted#by#local#sources;#over#80%#of#commercially#available#beef#and#95%#
of#all#pork,#sheep#and#goat#meat#consumed#comes#from#offRisland.#
• There# is# high# and# increasing# demand# for# local,# naturally# raised# meats# among# all#
consumer#segments.##
• While# many# retailers# and# restaurants# currently# purchase# some# local# meat,# there# is#
tremendous# room# for# increased# supply# of# beef,# lamb# and# pork# –# especially# the# two#
latter#products.#
• Current#retail#and#wholesale# local#meat#prices#are#comparable#with#those#of#nonRlocal#
sources;#to#generate#premium#prices#for#Hawai‘i#meats,#a#demonstration#of#consistently#
71#
higher# product# quality# and# sufficient# quantity# and# a# more# sophisticated# marketing#
approach#are#needed.#
o Retail#customers,#chefs#and#specialty/boutique#markets#may#be#willing#to#pay#a#
premium#for#local,#naturally#raised#meats#depending#on#its#quality.#
o LargerRscale#(super)#markets#may#not#be#able#to#pay#as#high#a#premium,#but#may#
still#be#willing#to#pay#relatively#more#as#long#as#product#quality#and#quantity#are#
consistently#demonstrated#and#any#added#cost#can#be#passed#on#to#consumers#at#
final# point# of# sale# with# appropriate# consumer# education# (i.e.# marketing,#
branding).#
• One#of#the#biggest#obstacles#to#ensuring#a#largeRscale#market#for#MSURprocessed#meats#
is#the#perception#of#inconsistent#quality#and#quantity,#resulting#from#the#aggregation#of#
products#from#a#diverse#group#of#smallRscale#ranchers.#
• In#addition#to#meeting#Hawai‘i#Island’s#demand#from#both#residents#and#tourists,#it#may#
be#economically# viable# to# air# ship# local#meat# around# the# State,# though# this#possibility#
must#be#explored#in#greater#detail.##
Recommendations%
• Create# an# exclusive#MSU# product# brand# and#marketing# niche# recognized# as# providing#
local,(hand_crafted,(high(quality(boutique(protein#for#local#consumption.#
• Emphasize# the#MSU’s#core#competency#as#a# level#of# flexibility# that#allows# it# to# rapidly#
adapt#and#exploit#market#niches# that# fixedRlocation# facilities# cannot,#due# to# their#high#
volume#processing#constraints.#This#includes#the#entire#range#of#specialty#meat#products#
generally# unavailable# in# the# market,# along# with# custom# meat# processing# and# valueR
added#services.##
• Include#a#discussion#of#the#MSU’s#public#benefits#in#its#marketing#message,#(i.e.#positive#
economic# impact#on# the# island#meat# industry#and#producers,#contributing# to#Hawai‘i’s#
selfRsufficiency#and#sustainability,#etc.)#
• Develop#a#processed#product#to#increase#shelf#life#while#providing#a#means#of#using#less#
desirable#cuts.(
72#
• Provide#affordable#meat#products#to#increase#local#protein#sources#for#the#island’s#lowR
income# population.# Consider# that# 30%# of# County# families# are# on# EBT# (SNAP# benefits)#
and# these# federal# dollars# could# be# captured# by# local#meat# producers.# To# this# end,# be#
sure#to#accept#EBT#at#any#future#retail#outlet.(
• Establish#customer#relations#with#restaurant#and#hotel#chefs#or#institutional#buyers#such#
as# schools,# hospitals,# prisons,# and# the#military# to# use# less# desirable# cuts# (i.e.# ground#
meat),#as#other#successful#MSUs#have#done#around#the#country#(i.e.#Wild#Buffalo#Idea#in#
North#and#South#Dakota).(
• Establish# customer# relations# with# State# agencies,# as# the# governor# set# a# 15%# price#
preference#for#Hawai‘i#producers#when#placing#their#bids#for#State#purchases.#
• Focus#on#consumer#education#to#change#any#preRexisting#perceptions#of#local#meats#as#
having# inconsistent# quality# or# quantity,#while#working#with#MSU# producers# to# ensure#
wellRcoordinated#production,#processing,#marketing#and#sales.##
• Identify#particularly#promising#market#opportunities#for#local#meat#to#replace#offRisland#
sources;#for#example,#pork#comprises#a#significant#part#of#the#local#island#diet#while#95%#
of#that#commercially#available#is#currently#imported.#
#
Technical#Issues#and#Regulatory#Requirements#
Summary%
• Like# all# USDA# inspected# slaughterhouses,# the# MSU# must# obtain# a# federal# grant# of#
inspection# from# the#USDARFSIS# by# filing# an# application# along#with# a#written# SSOP# and#
HACCP#plan.##The#USDARFSIS#is#familiar#with#the#MSU#concept,#and#has#already#granted#
federal#grants#of#inspection#to#over#20#MSUs#around#the#country.##
• Certified# facilities# are# provided# with# FSIS# inspection# service# (anteRmortem# and# postR
mortem)#free#of#charge#for#up#to#five#consecutive#eightRhour#days,#MondayRFriday.##
• The# MSU# must# also# comply# with# a# variety# of# other# regulations# promulgated# and#
enforced#by#public#agencies#at#multiple# levels#of# jurisdiction,# including#the#County#and#
State#(i.e.#potable#water#supply,#waste#water#disposal,#offal#disposal).##
73#
• Different#animal#species#as#well#as#specialty#slaughter#(organic,#kosher,#halal)#and#even#
nonRcertified# slaughter# may# be# take# place# in# the# same# MSU# facility,# but# must# be#
separated#by#time#(with#proper#cleaning#between#species)#or#space#(separate#room#or#
compartment).##
Recommendations%
• Utilize# available# resources# to# provide# technical# assistance# in# applying# for# the# federal#
grant# of# inspection# with# the# USDARFSIS,# such# as# NMPAN,# local# USDA# officials,# and#
existing#successful#MSUs#around#the#country#that#have#offered#support.#
• #Adopt#the#systematic#humane#handling#and#slaughter#approach#issued#by#the#FSIS,#and#
include#a#humane#handling#training#program#for#employees#(this#is#currently#encouraged#
but#not#required#by#the#FSIS).##
• Consider#working#with#Dr.#Temple#Grandon,#acclaimed#professor#of#animal#behavior#and#
livestock#industry#consultant,#on#humane#animal#slaughter#procedures.##
• Operate# slaughter# of# only# one# animal# species# per# day,# and# conduct# any# special#
certifications#such#as#kosher,#halal#or#organic#first#in#the#day.#
• Work# collaboratively# with# local,# State# and# federal# agencies# to# develop# appropriate#
protocols#to#address#the#many#regulations#pertaining#to#an#MSU;#invite#representatives#
from#all#pertinent#regulatory#agencies#(Department#of#Health,#USDA)#to#meet#as#a#group#
and# explain# the# project’s# purpose# clearly# and# ask# how# they# can# all# help.# Provide#
extensive#scientific#documentation#about#offal#and#waste#water#disposal/composting#to#
show#agencies# that#disposal#methods#proposed#have#been#tried#and# tested#elsewhere#
and#will#not#cause#a#public#health#concern.###
• Offer# training# for# ranchers# to# teach# proper# organic# composting/waste# management#
methods# to# assure# they# do# not# violate# state# environmental# regulations# pertaining# to#
offal#disposal.#
#
74#
Auxiliary#Issues#
Summary%
• Successful#MSUs# around# the# country# tend# control# their# whole#market# chain,# not# just#
slaughter,#including#chill,#cut/wrap#and#retail#services.#
• MSUs#may#operate#at#individual#ranches#or#several#central#docking#site#locations#where#
area#ranchers#bring#their#animals#to#be#harvested#by#the#unit;#both#strategies#are#viable#
in#different#settings,#depending#in#large#part#on#the#region’s#topography#and#degree#of#
ranch#dispersal.#
• At# least# three# producers# have# already# volunteered# their# ranch# or# farm# as# a# central#
docking#site#to#be#made#accessible#to#other#producers#in#their#region#(in#Puna,#Ka‘u,#and#
North#Kohala).#
Recommendations%
• Partner#with#an#existing#chill,#cut/wrap#and#retail#facility#initially,#while#funds#are#being#
acquired#to#construct#the#MSU’s#own#chill,#cut/wrap#and#retail#facility.#
• Over# 50%# of# producers# surveyed#would# be# fine# with# utilizing#MSU# slaughter# services#
either#on#their#ranch#or#at#a#nearby#location.##
• Due# to#Hawai‘i# Island’s#mountainous# topography# and# dispersed# ranch# layout,# identify#
several#central#docking#site#locations#that#will#be#accessible#for#ranchers#in#each#region.##
• Maintain# the# MSU’s# flexibility# to# operate# at# individual# ranches,# if/when# feasible# (i.e.#
sufficient# road# access);# provide# appropriate# compensation# and# liability# coverage# for#
such# ranchers# and# encourage# them# to# allow# other# area# producers# to# access# the# unit#
when#it#is#stationed#on#their#land.#
• If# providing#exempt,#nonRcertified# slaughter# for#products#not# intended# for# commercial#
sale,# consider# giving# a# separate# and# distinct# brand# name# to# that# service# to# help#
differentiate#it#from#federally#inspected#slaughter.##
• Consider#beginning#with#nonRcertified# slaughter#as#a# functional#and#productive# testing#
round,# and# add# inspected# slaughter# to# the# unit’s# schedule# once# a# federal# inspector# is#
assigned#to#the#unit#and#capacity#is#assured.#
75#
Economic#Feasibility#Summary%
• MSU# slaughter# services# typically# operate# at# cost,# with# no# substantial# profit# margin;#
greater#margins#can#be#realized#upstream#(livestock#production)#and#downstream#(chill,#
cut/wrap#and#retail).#As#a#cooperative,#the#profits#will#be#concentrated#in#the#producers’#
hands#in#both#cases.#
• To#be#economically#viable,#the#MSU#must#operate#at#least#4#days#per#week#with#any#mix#
of#species,#though#the#most#profitable#scenario#would#include#2#days#for#cattle,#1#day#for#
pigs,#and#1#day#for#sheep#or#goats#(on#alternating#weeks).##
• Current#MSU#throughput#projections#based#on#producer#survey#results#fall#short#of#the#
required# breakeven# volumes# –# 399# vs.# 500R1000# cattle,# 695# vs.# 800R1600# sheep# and#
goats,# and# 441# vs.# 600R1200# pigs# (depending# on# the# 4# day/week# slaughter# schedule);#
however,# producer# interest# in# an#MSU# is# high# and#more# volume# could# realistically# be#
harnessed# through# increased# outreach# and# education# about# the#MSU# concept.# Clarify#
with#producers# that# the#MSU#can#offer# flexible# services#–# including#both# certified#and#
nonRcertified#slaughter.#%
Recommendations%
• Search# for# startup#operating#capital# to#support# the#MSU#while# it# ramps#up#production#
and#until#it#can#operate#at#full#capacity#and#cover#its#own#operating#costs.#
• Allow# for# substantial# planning# and# coordination#with#producers# ahead#of# time,# so# the#
MSU#can#reach#full#capacity#as#quickly#as#possible#after#it#becomes#operational#(at#least#
three#months#in#advance#of#startup).#
• Explore#lucrative#market#opportunities#for#animal#byproducts#such#as#hides#and#offal#as#
an# additional# revenue# sources# for# the#MSU;# for# example,# hides# could#be# sold# to# local#
saddle#makers,#while#offal#could#be#converted# into#valueRadded#products# like#pet#food#
and# organic# fertilizer.# Search# for# business# partners# interested# in# exploring# such#
innovative#ventures.#
76#
• Acquire# funds# to# construct# a# chill,# cut/wrap#and# retail# facility# for# the#MSU#as# soon#as#
possible;#this#will#allow#participating#ranchers#to#develop#a#cohesive#brand#identity#and#
market#outlet#for#their#line#of#local,#grassRfed#meat.###
#
Ownership#and#Organizational#Structure#Summary%
• Various#organizational# structures#are#used# to#manage# the#MSUs#around# the#country#–#
including# an# LLC,# private# forRprofit# corporation,# nonRprofit# corporation,# or# producerR
owned#cooperative.#
Recommendations%%
• Create#a#producer#cooperative#to# lease#and#manage#the#unit#as#many#small#producers#
need#this#service#and#have#no#access#to#slaughter,#and#no#private#business#has#stepped#
up#to#take#the#risk.#
• To# encourage# producer# membership# in# the# cooperative# while# maximizing# revenues,#
offer# a# tiered# slaughter# pricing# scheme# –#with# lower# prices# for#members# and# slightly#
higher#prices#for#nonRmember#producers.##
• Provide# ongoing# technical# assistance# and# Board# education# to# support# the# producer#
cooperative#as#it#forms#and#grows.#
(
77#
References$$CCCD# (California# Center# for# Cooperative# Development).# 2014.# “Central# Coast# Agricultural#Cooperative#Case#Study”#–#Powerpoint#Presentation.###Cowee,#Margaret#W.# and# Thomas# R.# Harris,# Regulatory# and# Financial# Considerations# fro# Red#Meat#Mobile#Slaughter#in#Nevada,#University#Center#for#Economic#Development,#Department#of#Resource#Economics,#University#of#Nevada#Reno,#Technical#report#UCED#2010/11R04##Cox,#Linda#and#Soot#Bredhoff.#2003.#The#Hawai‘i#Beef#Industry:#Situation#and#Outlook#Update.#College#of#Tropical#Agriculture#and#Human#Resources#(CTAHR),#University#of#Hawai‘i#at#Manoa.##Cox,#Linda#J.,#Catherin#G.#Cavaletto,#Sandra#L.#Kunimoto,#James#C.#Nolan,#Jr.,#ShwuREn#Chen,#and#Peter#V.#Garrod.#1987.#Evaluation#of#Beef#Rib#Roasts#Available#to#Hawai‘i#Consumers.#College#of#Tropical#Agriculture#and#Human#Resources#(CTAHR),#University#of#Hawai‘i#at#Manoa,#Research#Series#052.#11pp.##Curtis,# Kynda# R.,# Margaret# W.# Cowee,# Michael# K.# Price,# Thomas# R.# Harris.# 2007.# Economic#Feasibility#of#a#MultiRSpecies#Slaughter/Processing#Facility# in#Northeastern#Nevada.#University#Center#for#Economic#Development,#University#of#Nevada,#Reno.##DBEDT#(Hawai‘i#Department#of#Business,#Economic#Development,#and#Tourism).#2002.#Hawai‘i#State#Data#Book,#1997R2002.###DBEDT# (Hawai‘i# Department# of# Business,# Economic# Development,# and# Tourism).# 2012.#Increased#Food#Security#and#Food#Self#Sufficiency#Strategy.##ESS#(Economics#and#Statistics#System,#US#Department#of#Agriculture).#1998.#Food#Consumption,#Prices,#and#Expenditures#1970R1997.###Food# Marketing# Institute.# 2009.# US# Grocery# Shopper# Trends.# Food# Marketing# Institute:#Arlington,#VA.###Fukumoto,#G.K,#Y.S.#Kim,#K.H.#Kim,#and#H.#Ako.#1999.#Carcass#and#Meat#Quality#Characteristics#of# ForageRBased# Beef.# Proceedings# of# Food# for# Health# in# the# Pacific# Rim,# 3rd# International#Conference# of# Food# Science# and# Technology.# Food# and# Nutrition# Press,# Inc.,# Trumbull,# CT#06611.##HASS#(Hawai‘i#Agricultural#Statistics#Service).#Hawai‘i#cattle.#2003###Hawai‘i# Department# of# Agriculture.# December,# 2007.# Protecting# the# Livestock# Industry# in#Hawai‘i.#Report#to#the#Legislature#of#the#State#of#Hawai‘i#In#Response#to#2007#House#Concurrent#Resolution#No.#170,#SD1#and#Senate#Concurrent#Resolution#No.#192.##
78#
KeelingRBond,# J.,#D.#Thilmany,#and#C.#Bond.#2009.#What# Influences#Consumer#Choice#of#Fresh#Produce#Purchase#Location?#Journal#of#Agricultural#and#Applied#Economics,#41(1):61R74.##Knight,#Carole#H.#September#2013.#Understanding#Beef#Carcass#Reports.#University#of#Georgia#Extension.##Martinez,#Steve,#Michael#Hand,#Michelle#Da#Pra,#Susan#Pollack,#Katherine#Ralston,#Travis#Smith,#Stephen# Vogel,# Shellye# Clark,# Luanne# Lohr,# Sarah# Low,# and# Constance# Newman.# 2010.# Local#Food# Systems:# Concepts,# Impacts,# and# Issues.# United# States# Department# of# Agriculture,#Economic#Research#Service.#Economic#Research#Report#Number#97.###Melrose,#Jeffrey#and#Donna#Delparte.#2012.#Hawai‘i#County#Food#SelfRSufficiency#Baseline#2012,#prepared# for# the# Hawai‘i# County# Department# of# Research# and# Development.# University# of#Hawai‘i#at#Hilo,#Geography#and#Environmental#Studies#Department.###Nemoto,#Kristen.#January#2014.#Home#on#the#Range.#Dining#in#Paradise#Magazine,#pp.#6R10.##NMPAN# (Niche# Meat# Processors# Assistance# Network)# Webinar# on# Red# Meat# Mobile#Slaughterhouses,#September#10,#2013##NMPAN#(Niche#Meat#Processors#Assistance#Network),#Mobile#Slaughter#Unit#Manual,#April#2010##Nudell,# D.,# and# T.# Petry# (1997).# “Feasibility# of# Operating# a# Lamb# Slaughter# Plant# in# North#Dakota.�”#North#Dakota#State#University#Agricultural#Economics#Report#384.#Packaged#Facts,#Fresh#and#Local#Food#in#the#US,#MarketResearch.com,#New#York,#NY,#May#2007##OmniTrak#Group#Inc.,#December#2011.#“Local#Food#Market#Demand#Study#of#O‘ahu#Shoppers”.#Ulupono#Initiative.###Painter,# Kathleen.# December,# 2008.# Feasibility# Analysis# for# a# Mobile# Slaughter# Unit.# Peer#reviewed# and# published# on# eXtension's# website:#http://www.extension.org/pages/Feasibility_Analysis_for_a_Mobile_Slaughter_Unit.##Shimogawa,# Duane.# “Parker# Ranch,# Omidyar’s# Ulupono# Initiative# partner# on# expansion# of#Hawai‘i’s#beef#market.”#Pacific#Business#News.#March#21,#2014.###Stevenson,#Matthew#and#Glen# Fukumoto.# June#2011.#A#Review#of#Mobile/Modular# Slaughter#and# Processing# Technology.# College# of# Tropical# Agriculture# and# Human# Resources# (CTAHR),#University#of#Hawai‘i#at#Manoa.#Food#Safety#and#Technology.#FSTR44.##United#States#Department#of#Agriculture#Census,#2007.##US#Energy#Information#Administration#(2014).#Weekly#retail#onRhighway#diesel#prices.#Retrieved#online#on#February#13#2014:#http://www.eia.doe.gov/oog/info/wohdp/diesel.asp.###
79#
#USDA#Census#of#Agriculture,#2007.#County#Profile#–#Hawai‘i#County;#Goat#Data#–#Inventory#and#Number#Sold:#2007#and#2002;#Hogs#and#Pigs#–#Inventory#and#Sales:#2007#and#2002;##Cattle#and#Calves#–#Inventory#and#Sales:#2007#and#2002.##USDA# Census# of# Agriculture,# 2010.# Statistics# of# Hawai‘i# Agriculture.# Summary:# Number# of#Livestock#Operations#and#Total#Number#of#Farms,#by#County,#2006R2010.###US#Census#Bureau,#Statistical#Abstract#of#the#United#States.#2012.#Health#and#Nutrition#141.#Per#Capita#Consumption#of#Major#Food#Commodities:#1980#to#2009.##USDARFSIS#(Food#Safety#and#Inspection#Services),#Small/Very#Small#Plant#Guide:#Applying#for#a#Federal#Grant#of#Inspection#for#Meat#and#Poultry#Establishments,#2006,#retrieved#online#from:#http://www.fsis.usda.gov/PDF/Guidelines_for_Obtaining_Federal_Grant_of_Inspection.pdf###USDARFSIS,#webinar#on#red#meat#mobile#slaughter#units.#January#20,#2010##USDARNASS#(National#Agricultural#Statistics#Service),#Hawai‘i#Farm#Facts,#February#2013##Wolfe,# Kent,# Audrey# LukeRMorgan,# Jim# Daniels,# and# John# C.# McKIssick,# Feasibility# of# a# local#processing#facility#in#Carrol#County,#Georgia,#The#University#of#Georgia,#Center#for#Agribusiness#and#Economic#Develompent,#College#of#Agricultural#and#Environmental#Sciences,#May#2009##Wulf,#D.#1999.#“Did#the#Locker#Plant#Steal#Some#of#My#Meat?”#South#Dakota#State#University.#Retrieved# online# from:#http://www.caes.uga.edu/Topics/sustainag/documents/didthelockerstealmymeat.pdf.###Zepeda,#L.#and#J.#Li.#2006.#Who#Buys#Local#Food?#Journal#of#Food#Distribution#Research,#Vol.#37,#pp.#1R11.##
$
80#
Appendix$A$–$Producer$Survey$Form$See#PDF,#attached.##
Appendix$B$–$Consumer$Survey$Form$See#PDF,#attached.#(
Appendix$C$–$MSU$Operating$Cost$Spreadsheets$See#PDF,#attached.#(
Appendix$D$–$Sample$Organizational$Documents$for$ProducerKOwned$Entity$See#PDF,#attached#(includes):#
• Sample#MSU#Producer#Cooperative#documents:#
• Bylaws##
• Board#of#Directors#Job#Description#
• Conflict#of#Interest#Statement#
• Delivery#Policy#
• Policy#on#Financials#and#Controls#
• Operational#Sites#Policy#
• Payment#Policy#
• Scheduling#Policy#
• Animal#Slaughter#Agreement#
• Example#legal#documents#from#the#Kaua‘i#Meat#Producers#Association##
• Master#Livestock#Scheduling#Sheet#
• Producer#Application#and#Commitment#Pledge#
• Pasture# Lease# Agreement# (note:( this( form( was( designed( for( producers( leasing(
land( from( a( landlord,( but( may( be( adapted( for( the( MSU( to( “lease”( individual(
ranchers’(land(if/when(slaughter(takes(place(on(a(private(ranch)#
• Livestock#Production#Affidavit#and#Bill#of#Sale#(relevant(when/if(a(producer(sells(
his/her(animal(to(the(MSU)#
• Cull# Cow# Selection# Criteria# (relevant( if( producer( entity( creates(member( quality(
standards)#
(
!
4/29&30!
1!
Hawai’i&Island&Mobile&Slaughter&Unit&(MSU):&&Producer&Survey&&
The&Hawai’i&Island&MSU&Task&Force&is&working&to&determine&the&feasibility&of&bringing&a&Mobile&Slaughter&Unit&to&Hawai`i&Island.&&&Thank&you&for&providing&your&input.&&&We&value&your&opinion.&&Instructions:++please+circle+the+most+appropriate+response+(only+one+please),+or+write+in+your+response+when+provided+a+lined+space.++
!
1. Where&is&your&farm/ranch&located?&Hamakua! ! Ka`u!! ! Puna! ! North!Kohala! ! South!Kohala!! !North!Kona!! South!Kona! North!Hilo! South!Hilo!
&2. How&many&acres&does&your&ranch/farm&own&or&lease&(including&allotments)?&&(specify)#)!_____!
&3. In&the&following&table,&list&the&number&and&type&of&animals&you&produce&annually,&any&specific&
breed&used,&special&production&methods&employed,&and&the&calving&season&if&appropriate.&&
Animal&Species&&(cattle,&pig,&sheep,&
goat,&etc.)&
Number&of&Animals&
Breed&(i.e.&black&angus)&
Production&Method&(grassPfed,&hormonePfree,&certified&organic,&etc.)&
Calving&Season&(spring,&fall,&etc.)&
! ! ! ! !
! ! ! ! !
! ! ! ! !
! ! ! ! !
&
4. How&does&your&ranch/farm¤tly&market&its&livestock&products?&(fill)out)all)that)apply)&Yearlings!sold!to!mainland!feedlot,!#!_____________________!Locally&slaughtered!and!processed,!species!1!_____________________,!#!_____________________!
Locally&slaughtered!and!processed,!species!2!_____________________,!#!_____________________!!Locally&slaughtered!and!processed,!species!3!_____________________,!#!_____________________!!Locally&slaughtered!and!processed,!species!4!_____________________,!#!_____________________!!
&5. If&locallyPslaughtered,&where&do&you¤tly&process&your&animals?&Kulana!Foods!in!Waiakea!
Hawaii!Beef!Producers!in!Pa`auilo!!At!home!Other,!please)specify:!_______________________________________!
!&
!
4/29&30!
2!
6. If&locallyPprocessed,&how&do&you¤tly&market&your&animals?&Wholesale!to!retailer!(grocer/specialty!store)!
Sell!to!restaurant!Farmers!market!Internet/mail!order!
Word&of&mouth!Other:!_______________________________!
!
7. Do&you&anticipate&a&difference&in&the&number&and/or&type(s)&of&animals&you&plan&to&process&3&years&from&now?&&
If!yes,!please!specify:!________________________________________________________________!
!8. Are&you&satisfied&with&the¤t&animal&processing&situation&onPisland?&Yes!!
No!!9. If&a&USDA&inspected&Mobile&Slaughter&Unit&(MSU)&was&available,&would&you&utilize&it?&
Yes!No!If+yes,+what+volume+of+animals+might+your+ranch+send+to+the+MSU+per+year?+(please)use)separate)
lines)for)same)animal)types)of)differing)ages))
Animal&Species&
&(cattle,&pig,&sheep,&goat,&etc.)&
Number&of&
Animals&
Average&&
Live&Weight&
Animal&Age&&
(yearling,&cull,&etc.)&
! ! ! !
! ! ! !
! ! ! !
! ! ! !
!10. If&you&utilized&the&unit,&would&it&want&it&to&come&to&your&ranch/farm&or&would&you&be&willing&to&
bring&your&animals&to&a&holding&pen/landing&site&nearby?&Ranch!Nearby!
Either!!
11. If&a&cooperative&or&other&business&entity&of&local&producers&was&established&to&manage&the&
MSU,&what&functions&would&you&want&this&entity&to&provide&for&your&operation?&(please)circle)all)that)apply)!
Slaughtering! ! Chill/cut/wrap!
Marketing!and!sales!! Purchasing!feed!!!
!
4/29&30!
3!
12. Starting&a&new&business&requires&startPup&capital.&&If&this&business&entity&were&shown&to&be&a&potentially&profitable&venture,&would&you&be&willing&to&invest&in&it?&
Yes!No!!
13. If&you&answered&yes&to&question&12&above,&and&this&venture&was&found&to&be&a&worthwhile&investment&of&time&and&money,&what&amount&would&you&be&willing&to&invest&in&a&local,&producerPowned&business&entity?&
$1&500!$501!to!$1000!$1000!to!$2500!
$2501!to!$5000!$5000!or!more!Expertise,)please)specify:!______________________________________________________!
!14. If&you&were&to&participate&in&this&local&producerPowned&business&entity&and&utilize&the&MSU,&
briefly&describe&how&your¤t&livestock&operation&might&change)(i.e.)feed)out)and)not)sell)to)
mainland,)increase/decrease)the)number)of)animals)produced,)produce)specialty)product)–)grass=fed,)natural,)etc.)&
!
!!
&&15. Would&you&be&interested&in&participating&in&further&discussions&about&an&MSU?&&
Yes!No!If)yes,)please)provide)your)contact)information)so)we)can)let)you)know)about)a)future)meeting:!
Name:!_____________________________________________!Phone:!_____________________________________________!Email:!______________________________________________!
&16. Would&you&be&interested&in&being&part&of&a&Producer&Steering&Committee&to&help&form&a&local&
producerPowned&organization&to&manage&an&MSU?&
Yes!No!!
!
Mahalo&for&your&time&and&responses!!
1
MSU$Consumer$Phone$Survey$–$Questionnaire!!Surveyor!Name!____________________________! ! Date!____________________!!Business!Name,!Location!(town)!!_________________________________!!Retail!store![!]! ! Restaurant![!]! ! (check!one)!!Surveyor!instructions:!circle!the!most!appropriate!answer!provided!by!the!respondent!or!write!it!down!when!a!line!is!provided.!!Hi,$my$name$is$[………]$and$I$am$working$with$the$Hawaii$Island$Mobile$Slaughter$Unit$initiative$with$The$Kohala$Center$and$local$ranchers.$We$are$trying$to$assess$interest$in$local$meats$by$island$stores$and$restaurants.$If$you$agree$to$participate$in$this$survey,$it$will$take$approximately$5K10minutes$to$complete$and$will$greatly$benefit$our$project$–$which$is$about$increasing$the$availability$of$local$meats$on$the$island.$Do$you$have$5K10minutes$to$participate$in$this$important$study?$!!
1. Does$your$establishment$currently$purchase$local$meats?$(raised$and$processed$on$Hawaii$Island)$$
(if!answer!is!no,!skip!to!question!#6)!!2. If$yes,$which$of$the$following$types$of$local$meats$have$you$purchased$in$the$past$30$
days:$$Beef! !!!Lamb! ! !Pork! ! !Goat!!3. What$percent$of$your$establishment’s$monthly$meat$purchases$are$local?$Please$
provide$your$best$estimate.$$Beef,!%______________________________! !!!Lamb,!%_____________________________! ! !Pork,!%______________________________! ! !Goat,!%______________________________!$4. Where$has$your$establishment$purchased$locally$grown$meats?$Select$as$many$as$
apply.$Direct!from!a!farmer!From!a!farmers’!market!From!a!local!processor!From!a!foodservice!distributor!Other!(please!list):!_____________________________________________________!!
2
5. Do$you$require$any$labeling$or$certification$to$ensure$that$your$meat$purchases$are$truly$local?$
Yes!No$Explain:!______________________________________________________________!$$6. How$many$pounds$of$the$following$beef$cuts$did$you$purchase$for$your$establishment$
in$the$last$30$days$or$7$days*$(whichever$is$easier$to$answer),$and$how$much$did$you$pay$for$each$per$lb?$$
*Note!timeframe!for!numbers!provided!(month!or!week):!!Cut$type$ 1K20lbs$ 20K50lbs$ 50K
100lbs$More$than$100lbs$
Did$not$purchase$
Price$per$lb.$[note$local$(L)$vs.$mainland$(M)$prices,$and$%!purchased!locally]$
Beef!triLtip! ! ! ! ! ! !Beef!roast! ! ! ! ! ! !Prime!rib! ! ! ! ! ! !Preformed!hamburgers!or!meatballs!
! ! ! ! ! !
Rib!eye!steak! ! ! ! ! ! !Sirloin!steak! ! ! ! ! ! !Beef!chuck! ! ! ! ! ! !Beef!stew!meat! ! ! ! ! ! !Bee!liver/kidney/tripe! ! ! ! ! ! !
Other:!_______________!
! ! ! ! ! !
$$$$$$$$$
3
7. How$many$pounds$of$the$following$pork$cuts$did$you$purchase$for$your$establishment$in$the$last$30$days,$and$how$much$did$you$pay$for$each$per$lb?$(Check!the!appropriate!box!and!list!price!in!last!column)$
Cut$type$ 1K20lbs$ 20K50lbs$ 50K100lbs$
More$than$100lbs$
Did$not$purchase$
Price$per$lb.$[note$local$(L)$vs.$mainland$(M)$prices,$and$%!purchased!locally]$
Shoulder! ! ! ! ! ! !
Belly/Bacon! ! ! ! ! ! !
Ribs! ! ! ! ! ! !
Leg! ! ! ! ! ! !
Feet! ! ! ! ! ! !
Loin! ! ! ! ! ! !
Ground!pork! ! ! ! ! ! !
Other:!_______________!
! ! ! ! ! !
$8. How$many$pounds$of$the$following$sheep/lamb$cuts$did$you$purchase$for$your$
establishment$in$the$last$30$days,$and$how$much$did$you$pay$for$each$per$lb?$$(Check!the!appropriate!box!and!list!price!in!last!column)$
Cut$type$ 1K20lbs$ 20K50lbs$ 50K100lbs$
More$than$100lbs$
Did$not$purchase$
Price$per$lb.$[note$local$(L)$vs.$mainland$(M)$prices,$and$%!purchased!locally]$
Shoulder! ! ! ! ! ! !Rack! ! ! ! ! ! !Breast! ! ! ! ! ! !Leg! ! ! ! ! ! !Lamb!chops! ! ! ! ! ! !Loin! ! ! ! ! ! !Shank! ! ! ! ! ! !Whole!lamb! ! ! ! ! ! !Ground!meat! ! ! ! ! ! !Mutton! ! ! ! ! ! !Other:!________________!
! ! ! ! ! !
!
4
!9. How$many$pounds$of$the$following$goat$cuts$did$you$purchase$for$your$establishment$
in$the$last$30$days,$and$how$much$did$you$pay$for$each$per$lb?$$(Check!the!appropriate!box!and!list!price!in!last!column)$
Cut$type$ 1K20lbs$ 20K50lbs$ 50K100lbs$
More$than$100lbs$
Did$not$purchase$
Price$per$lb.$[note$local$(L)$vs.$mainland$(M)$prices,$and$%!purchased!locally]$
Shoulder! ! ! ! ! ! !Belly! ! ! ! ! ! !Ribs! ! ! ! ! ! !Leg! ! ! ! ! ! !Loin! ! ! ! ! ! !Goat!stew!meat! ! ! ! ! ! !Whole!goat! ! ! ! ! ! !Ground!meat! ! ! ! ! ! !Other:!________________!
! ! ! ! ! !
!$
10. Would$you$be$interested$in$purchasing$local$meat,$or$more$local$meat,$if$a$handKcrafted,$natural$product$were$available$through$a$producerKowned$entity$using$a$USDAKcertified$Mobile$Slaughter$Unit?$$
!!
11. What$would$you$be$willing$to$pay$more$for$this$high$quality,$gourmet$meat?$!Same!price!as!pay!now!for!mainland!meat!Same!price!as!pay!now!for!local!meat!$0!L!$0.50/lb!!$0.51!L!$1.00/lb!premium!$1.01!L!$2.00/lb!premium!$2.01!L!$3.00/lb!premium!$3.01!L!$4.00/lb!premium!!
$Mahalo$for$your$time$and$responses!$
Appendix C. MSU Operating Costs - 3, 4, and 5 Days/Week
Hawaii Island MSU Operating Costs - 3 Days/Week
Opera&ng)expenses)for)3)days/wk)(50wks/year) January February March April May June) July August September October November December TotalLabor:Manager/Co-ordinator @ $20/hr, salary $20K/yr (1/2 time) 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20,000Butcher 1, salary $50K/yr 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 50,000Butcher 2, salary $50K/yr 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 50,000Assistant butcher @ $18/hr, 30hrs/wk (3 kill days @ 10hrs/kill day) 2,160 2,160 2,160 2,160 2,160 2,160 2,160 2,160 2,160 2,160 2,160 1,080 24,840USDA Inspector @ $70/hr at 1hr overtime per kill day 984 984 984 984 984 984 984 984 984 984 984 492 11,316Payroll taxes and benefits 2797 2797 2797 2797 2797 2797 2797 2797 2797 2797 2797 2548 33,313Total labor costs 14,274 14,274 14,274 14,274 14,274 14,274 14,274 14,274 14,274 14,274 14,274 12,454 169,469
Supplies:Cleaning supplies, plastic bags, paper towels - $20/kill day 240 240 240 240 240 240 240 240 240 240 240 120 2,760Total supply costs 240 240 240 240 240 240 240 240 240 240 240 120 2,760
U/li/es: 0Propane(for(hot(water(heater(-($20/kill(day( 240 240 240 240 240 240 240 240 240 240 240 120 2,760Electricity(for(lights(&(air(condi<oner(-($25/kill(day 300 300 300 300 300 300 300 300 300 300 300 150 3,450Phones (2 iPhones for full-time butchers) 150 150 150 150 150 150 150 150 150 150 150 150 1,800Total utility costs 690 690 690 690 690 690 690 690 690 690 690 420 8,010
Other3MSU3Costs: 0Semi truck rental ($200/move day - twice per week) 800 800 800 800 800 800 800 800 800 800 800 400 9,200Vehicle Insurance 200 200 200 200 200 200 200 200 200 200 200 200 2,400Maintenance/Repairs @ $50/kill day 600 600 600 600 600 600 600 600 600 600 600 300 6,900Fuel ($60/kill day) 768 768 768 768 768 768 768 768 768 768 768 384 8,832MSU Annual Lease Fee (3% of appriasal value of $175,000) 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 5,250Overhead (5% of operating costs per year) 887 887 887 887 887 887 887 887 887 887 887 887 10,641Total other MSU costs 3692.25545 3692.25545 3692.25545 3692.25545 3692.25545 3692.25545 3692.25545 3692.25545 3692.25545 3692.25545 3692.25545 2608.3 43,223
TOTAL: 18,896 18,896 18,896 18,896 18,896 18,896 18,896 18,896 18,896 18,896 18,896 15,602 223,462
Hawaii Island MSU Operating Costs - 4 Days/Week
Opera&ng)expenses)for)4)days/wk)(50wks/year) January February March April May June) July August September October November December TotalLabor:Manager/Co-ordinator @ $20/hr, salary $20K/yr (1/2 time) 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20,000Butcher 1, salary $50/yr 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 50,000Butcher 2, salary $50/yr 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 50,000Assistant butcher @ $18/hr, 40hrs/wk (4 kill days @ 10hrs/kill day) 2,880 2,880 2,880 2,880 2,880 2,880 2,880 2,880 2,880 2,880 2,880 1,440 33,120USDA Inspector @ $70/hr at 1hr overtime per kill day 1312 1312 1312 1312 1312 1312 1312 1312 1312 1312 1312 656 15,088Payroll taxes and benefits 2962 2962 2962 2962 2962 2962 2962 2962 2962 2962 2962 2631 35,218Total labor costs 15,488 15,488 15,488 15,488 15,488 15,488 15,488 15,488 15,488 15,488 15,488 13,061 183,426
Supplies:Cleaning supplies, plastic bags, paper towels - $20/kill day 320 320 320 320 320 320 320 320 320 320 320 160 3,680Total supply costs 320 320 320 320 320 320 320 320 320 320 320 160 3,680
U/li/es: 0Propane(for(hot(water(heater(-($20/kill(day( 320 320 320 320 320 320 320 320 320 320 320 160 3,680Electricity(for(lights(&(air(condi<oner(-($25/kill(day 400 400 400 400 400 400 400 400 400 400 400 200 4,600Phones (2 iPhones for full-time butchers) 150 150 150 150 150 150 150 150 150 150 150 150 1,800Total utility costs 870 870 870 870 870 870 870 870 870 870 870 510 10,080
Other3MSU3Costs: 0Semi truck rental ($200/move day - once per week) 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 800 18,400Vehicle Insurance 200 200 200 200 200 200 200 200 200 200 200 200 2,400Maintenance/Repairs @ $50/kill day 800 800 800 800 800 800 800 800 800 800 800 400 9,200Fuel ($60/kill day) 1024 1024 1024 1024 1024 1024 1024 1024 1024 1024 1024 512 11,776MSU Annual Lease Fee (3% of appriasal value of $175,000) 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 5,250Overhead (5% of operating costs per year) 1018 1018 1018 1018 1018 1018 1018 1018 1018 1018 1018 1018 12,211Total other MSU costs 5079.05 5079.05 5079.05 5079.05 5079.05 5079.05 5079.05 5079.05 5079.05 5079.05 5079.05 3367.05 59,237
TOTAL: 21,757 21,757 21,757 21,757 21,757 21,757 21,757 21,757 21,757 21,757 21,757 17,098 256,422
Hawaii Island MSU Operating Costs - 5 Days/Week
Opera&ng)expenses)for)5)days/wk)(50wks/year) January February March April May June) July August September October November December TotalLabor:Manager/Co-ordinator @ $20/hr, salary $20K/yr (1/2 time) 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20,000Butcher 1, salary $50/yr 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 50,000Butcher 2, salary $50/yr 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 4,167 50,000Assistant butcher @ $18/hr, 50hrs/wk (5 kill days @ 10hrs/kill day) 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 1,800 41,400USDA Inspector @ $70/hr at 1hr overtime per kill day 1640 1640 1640 1640 1640 1640 1640 1640 1640 1640 1640 820 18,860Payroll taxes and benefits 3128 3128 3128 3128 3128 3128 3128 3128 3128 3128 3128 2714 37,122Total labor costs 16,701 16,701 16,701 16,701 16,701 16,701 16,701 16,701 16,701 16,701 16,701 13,667 197,382
Supplies:Cleaning supplies, plastic bags, paper towels - $20/kill day 400 400 400 400 400 400 400 400 400 400 400 200 4,600Total supply costs 400 400 400 400 400 400 400 400 400 400 400 200 4,600
U/li/es: 0Propane(for(hot(water(heater(-($20/kill(day( 400 400 400 400 400 400 400 400 400 400 400 200 4,600Electricity(for(lights(&(air(condi<oner(-($25/kill(day 500 500 500 500 500 500 500 500 500 500 500 250 5,750Phones (2 iPhones for full-time butchers) 150 150 150 150 150 150 150 150 150 150 150 150 1,800Total utility costs 1050 1050 1050 1050 1050 1050 1050 1050 1050 1050 1050 600 12,150
Other3MSU3Costs: 0Semi truck rental ($200/move day - twice per week) 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 800 18,400Vehicle Insurance 200 200 200 200 200 200 200 200 200 200 200 200 2,400Maintenance/Repairs @ $50/kill day 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 500 11,500Fuel ($60/kill day) 1280 1280 1280 1280 1280 1280 1280 1280 1280 1280 1280 640 14,720MSU Annual Lease Fee (3% of appriasal value of $175,000) 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 437.5 5,250Overhead (5% of operating costs per year) 1110 1110 1110 1110 1110 1110 1110 1110 1110 1110 1110 1110 13,320Total other MSU costs 5627.51 5627.51 5627.51 5627.51 5627.51 5627.51 5627.51 5627.51 5627.51 5627.51 5627.51 3687.51 65,590
TOTAL: 23,779 23,779 23,779 23,779 23,779 23,779 23,779 23,779 23,779 23,779 23,779 18,155 279,722
Sample Bylaws for MSU Producer Co-operative Article I Object The purpose of the association is to engage in any lawful business for which associations may be incorporated under Chapter 23.86 of Revised Code of Washington Article II Membership Section 1. Eligibility Membership in this Association shall be limited to persons that:
(a) Are bona fide Meat Producers on Hawaii Island as defined from time to time by the Board of Directors;
(b) Have purchased and own one full share of the Association’s common stock at such price as the Board shall determine from time to time;
(c) Have agreed to abide by the Articles of Incorporation, Bylaws, rules and regulations of the Association and all amendments thereto;
(d) Have been accepted for membership by the Association’s Board of Directors; or
(e) Do not qualify as a Meat Producer, but having an interest in meat production, do qualify as an Associate member. Associate members shall not have voting privileges and shall not be eligible for election as a Director or Officer in accordance with the provisions of these Bylaws.
Section 2. Termination of Membership A membership shall terminate:
(a) for want of the qualification under Article II; (b) upon resignation being made in writing with the Association; (c) upon a resolution of the Board for the termination of membership.
A resolution for the termination of the membership under (c) shall be adopted by a vote of not less than two-thirds of the number of all Directors. When the Board resolves to terminate the membership of a Member under (c), the Association shall notify in writing the Member whose membership is terminated, and redeem the common stock held by terminated member.
Article III Directors and Officers Section 1. Number and Allocation The business of the Association shall be controlled by a Board of Directors consisting of Nine (9) members in good standing of the Association.
Section 2. Term Except as provided herein or in the Articles of Incorporation, one-third of the directors, as nearly as may be, shall be elected each year on a rotating basis, and unless specified otherwise herein or in the Articles of Incorporation, the term of office of each director shall be three (3) years. In order to establish these rotating terms, the terms of the initial Board of Directors shall be as follows: (a) four (4) initial directorships shall expire as of the annual meeting date for the fiscal year ending December 31, 2009; (b) four (4) initial directorships shall expire as of the annual meeting date for the fiscal year 2010; and the remaining initial directorships shall expire as of the annual meeting date for the fiscal year 2011. The initial directors shall determine which initial directors occupy these various terms of office. Unless otherwise specified at the time of election of a director, his term shall commence as of the date of the annual meeting of members immediately following his election, and unless a director shall die, resign or be removed from office, a director shall hold office until the annual membership meeting at which his successor shall be elected and until his successor shall qualify. A director who has died, resigned, or been removed from office shall be replaced in the manner provided in Section 14 below entitled “Board Vacancies.” Section 3. Nomination and Election Procedure The Board of Directors may prescribe rules and regulations not inconsistent with these Bylaws governing the nomination of directors and the qualifications of candidates. However, said rules and regulations shall specify that candidates shall currently qualify as members of the Association, and shall be willing to be a candidate for the office of director and to serve in that capacity if elected. Said rules and regulations may also provide that a Nominating Committee be appointed by the Board of Directors. Nominations may also be made from the floor at the annual meeting provided any such nominee is present at such meeting and meets the qualifications of a candidate as referenced herein. Section 4. Annual and Regular Board Meetings An annual Board meeting shall be held without notice immediately after and at the same place as the annual membership meeting for the purpose of reorganizing the Board, election of officers and such other business as may come before the meeting. By resolution, the Board may provide the time and place either within or without the State of Washington for holding regular Board meetings without other notice than such resolution. Section 5. Special Board Meetings Special Board meetings may be called by or at the request of the President or Vice President or any two (2) Directors. The person or persons authorized to call special meetings may fix any place either within or without the state of Washington as the place for holding any special Board meeting called by them. Section 6. Notice of Special Board Meetings Written notice of each special Board meeting shall be delivered personally, mailed, or emailed to each director at his address shown on the records of the Association at least three (3) days before the meeting. Notice shall be effective upon delivery at such address, provided that notice by mail shall also be deemed effective if deposited in the United States
mail properly addressed with postage prepaid at least five (5) days before the meeting, and notice by email shall also be deemed effective if the content thereof is sent at least five (5) days before the meeting. Neither the business to be transacted at nor the purpose of any special Board meeting need be specified in the notice of such meeting. Section 7. Waiver of Notice
(a) Whenever any notice is required to be given to any director under the provisions of these Bylaws or under the provisions of the Association’s Articles of Incorporation or by law, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the waiver or notice of such meeting.
(b) The attendance of a director at a Board meeting shall constitute a waiver of notice of such meeting, except where a director attends a Board meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.
Section 8. Quorum A majority of the directors shall constitute a quorum for the transaction of business at any Board meeting, but if less than such majority be present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. Voting by written proxy shall be allowed. Section 9. Manner of Acting The act of the majority of the directors present at a meeting at which there is a quorum shall be the act of the Board, unless the vote of a greater number is required by these Bylaws or by law. Section 10. Presumption of Assent A director of the Association present at a Board meeting at which action or any Association matter is taken shall be presumed to have assented to the action taken unless the dissenting director’s dissent is entered in the minutes of the meeting or unless the dissenting director files written dissent to such action with the person acting as the Secretary of the meeting before the adjournment thereof or unless the dissenting director forwards such dissent by registered mail to the Secretary of the Association immediately after the adjournment of the meeting. A director who voted in favor of such action may not dissent. Section 11. Executive and Other Committees
(a) The Board may appoint standing or temporary committees from its own number and invest such committees with such powers as it may see fit, subject to such conditions as may be prescribed by the board and by applicable law. The designations of any such committee and the delegation of authority thereto shall not relieve the Board, or any member thereof, of any responsibility imposed by law.
(b) An Executive Committee may be appointed by resolution passed by a majority of the full Board. Any standing committee or Executive Committee shall have and may exercise such authority of the Board as may be specified in the resolution creating such committee; provided, however, that no such committee shall have the authority of the Board in reference to proposing amendments to or repeal of the corporate articles; electing or removing from office and director or officer of this Association; adopting a plan of merger or adopting a plan of consolidation with another association; authorizing the sale, lease, exchange or mortgage or other disposition of all or substantially all of the property and assets of this Association; authorizing the voluntary dissolution of this Association or revoking proceedings therefore; adopting a plan for the distribution of the assets of this Association; or amending, altering or repealing any resolution of the Board.
(c) All committees so appointed shall keep regular minutes of their meetings and shall cause them to be recorded in books kept for that purpose in the office of this Association.
Section 12. Compensation of Directors By Board resolution, directors and committee members may be paid their expenses, if any, of attendance at each Board or committee meeting, or a fixed sum for attendance at each Board or committee meeting, or a stated salary as director or a committee member, or a combination of the foregoing. No such payment shall preclude any director or committee member from serving this Association in any other capacity and receiving compensation therefore. Section 13. Resignation Any director may resign at any time by delivering written notice to the President or to the Secretary of by giving oral notice at any meeting of the directors or members. Section 14. Board Vacancies When a Board vacancy occurs for a reason other than by expiration of a director’s term or removal by the membership as described below, the remaining members of the Board, by a majority vote, shall fill the vacancy. Section 15. Removal of Directors. Any member may bring charges against a director by filing such charges with the Secretary of the Association, together with a petition signed by members representing ten percent (10%) of the membership votes, requesting the removal of the director in question. Thereupon the Board of Directors must call a special meeting of the members to consider the removal of the director. By a vote of members representing a majority of the membership voting, the director in question shall be removed from office and the vacancy shall be filled. The director against whom such charges have been brought shall be informed in writing of the charges previous to the meeting and shall have an opportunity at the meeting to be heard in person or by counsel and to present witnesses; and the person or persons bringing the charges against him shall have the same opportunity. A director can also be removed by a majority vote of the Board.
Section 16. Absence of Officer In the case of the absence or disability of any officer of the Association, or for any reason deemed sufficient by a majority of the Board of Directors, the Board of Directors may delegate the power or duties of such office to any other officer or director for the time being. Article IV Duties of Directors Section 1. Management of Business The Board of Directors shall have general supervision and control of the business and the affairs of the Association and shall make all rules and regulations not inconsistent with law or with these Bylaws for the management of the business and the guidance of the members, officers, employees, and agents of the Association. They shall have installed an accounting system which shall be adequate to the requirements of the business and it shall be their duty to require proper records to be kept of all business transactions. Section 2. Bonds and Insurance The Board of Directors shall require that all officers, agents, and employees charged by the Association with responsibility for the custody of any of its funds or negotiable instruments to furnish adequate fidelity bonds. Such bonds, unless cash security is given, shall be written by a responsible bonding company and approved by the Board of Directors, and the cost thereof shall be paid by the Association. The Board of Directors shall provide for property insurance considered by it to be adequate to protect the Association from loss and in addition adequate insurance covering liability for accidents to all employees and the public. Section 3. Audits (amended) At least once in each year the Board of Directors shall secure the services of a competent and disinterested certified public accountant who shall make a careful audit of the books and accounts of the Association and render a report in writing thereon, which report shall be submitted to the members of the Association at their annual meeting. This report shall include at least a balance sheet showing the true assets and liabilities of the Association, and an operating statement for the fiscal period under review. Section 4. Agreements with Members The Board of Directors shall have the power to carry out all agreements of the Association with its members in every way advantageous to the Association representing the members collectively. Section 5. Depository The Board of Directors shall have the power to select one or more banks to act as depositories of the funds of the Association and to determine the manner of receiving, depositing, and disbursing the funds of the Association and the form of checks and the
person or persons by whom same shall be signed, with the power to change such banks and the person or persons signing such checks and the form thereof at will. Section 6. Indebtedness The Board of Directors shall incur necessary indebtedness and fix the amount thereof for the operation of the business and authorize the execution and delivery of all necessary instruments and documents in the name of the Association. Article V Duties of Officers Section 1. General. The officers of this Association shall be a President, one or more Vice Presidents, a Secretary and a Treasurer, and such other officers and assistant officers as may be deemed necessary and may be elected or appointed by the Board of Directors. Section 2. Duties of President The President shall: (1) Preside over all meetings of the Association and the Board of Directors; (2) call all meetings of the Board of Directors; (3) perform all acts and duties usually performed by an executive and presiding officer; and (4) sign all papers of the Association as she/he may be authorized or directed to sign by the Board of Directors. The President shall perform such other duties as may be prescribed by the Board of Directors. Section 3: Duties of the Vice President In the absence or disability of the President, the Vice President shall perform the duties of the President; provided, however, that in case of death, resignation or permanent disability of the President, the Board of Directors may declare the office vacant and elect his/her successor. Section 4: Duties of the Secretary The Secretary shall: (1) take all minutes of all Annual, Special, and Board meetings; (2) co-sign all papers of the Association as she/he may be authorized or directed to co-sign by the Board of Directors. She/he shall sign all stock certificates and certificates evidencing book credits, capital funds and allocated reserves (if any) with the President and such other papers pertaining to the Association as she/he may be authorized or directed to sign by the Board of Directors. She/he shall serve all notices required by law and by these Bylaws. She/he shall keep the corporate seal and the book of stock certificates and complete all certificates issued, and affix the corporate seal to all papers requiring a seal. She/he shall keep complete stock certificate and book credit, capital fund, and allocated reserve records. Section 5: Duties of the Treasurer The Treasurer shall ensure that accurate financial accounts of the Association are kept, and that the financial accounts are audited at the close of each fiscal year and at other times as directed by the Board. He/she will present a summary of the financial standings of the Association to the Board of Directors at regular meetings. He/she shall perform such other
duties with respect to the finances of the Association as may be prescribed by the Board of Directors. Article VI Meetings of Members Section 1. Annual Meeting The annual meeting of members shall be held within one hundred fifty (150) days after the end of the Associations fiscal year at the principal place of business of the Association or at such other time and place, within or without the State of Washington, as the Board of Directors shall designate, for the purpose of transacting such business as may properly come before the meeting. Section 2. Special Meetings The Board of Directors may call special meetings of the members for any purpose at any time. Upon the petition of the holders of not less than ten percent (10%) of all membership votes entitled to vote at the meeting, the President shall call a special meeting of the members not less than ten (10) nor more than (30) days after the receipt of such petitions. The purpose of every special meeting of the members shall be stated in the resolution or petition therefore and the notice thereof. Section 3. Notice Notice of every meeting of the members shall be given at least ten (10) days prior to such meeting, by sending to each member of record appearing upon the books of the Association addressed to him at his last known post office address as shown on the records of the Association, a written or a printed notice signed by the Secretary or President stating the time, place, and purpose of the meeting. Such notice may be set forth in or as a part of any official publication of the Association, provided the foregoing requirements are met. Whenever any notice is required to be given to any member under the provisions of these Bylaws or under the provisions of the Association’s Articles of Incorporation or by law, waiver thereof in writing, signed by the member entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Section 4. Quorum A quorum at a meeting of members is constituted by the representation in person, by mail or by proxy of twenty-five percent (25%) of all membership votes entitled to be cast at such meeting. Section 5. Action by Consent Any action required or permitted to be taken at a meeting of the members may be taken without a meeting if a written consent setting forth the action so taken is signed by all members entitled to vote with respect to the subject matter thereof. Any such consent shall be inserted in the minute book as if it were the minutes of the meeting of the members. Section 6. Designation of Representative
Every member who is a corporation, partnership, trust or other entity shall designate a specific individual to vote the membership or otherwise represent said member in its dealings with the Association. Such designation shall be in the form of a resolution adopted by the Board of Directors of the member, verified by its incumbent President and shall be filed with the Secretary of the Association before or at the time of a meeting. In the event the lessor and lessee of a share tenancy jointly hold a single membership, the lessor and lessee may agree, and so notify the Association in writing, that the lessee shall have first right to vote the membership and the lessor shall have the alternate right to vote the membership in the absence or failure of the lessee to vote, and in the absence of such agreement and notification to the Association, the lessee shall have the sole right to vote the membership. Section 7. Proxy and Mail Ballots Voting by proxy shall be allowed. Proxy forms can be obtained from the Secretary and must be submitted in advance of the meeting. Voting by mail shall be allowed, provided the ballot is issued from the office of the Association. Article VII Operations Section 1. Character of Business All activities of this Association involving members shall be nonprofit and cooperative in character for the mutual benefit and upon the mutual responsibility of its members. The Association may deal with a nonmember patron on either a nonprofit, cooperative basis or on a for-profit basis, as determined by the Association. Section 2. Margins
a. The Board of Directors shall determine from time to time the Association’s charges for providing services to its patrons. “Margins” made by this Association are hereby defined to be the net proceeds derived from all such charges, plus all other revenues or income of the Association after operating expenses, charges (including over advances and charges for carrying forward any operating loss for any preceding year), interest, and dividends on all classes of stock, book credits, capital funds or allocated reserves have been deducted.
1. Margins made by this Association from its operations during each fiscal year properly allocable to the business done with or for members (and any other patrons with whom the Association contracts to deal on a nonprofit cooperative basis) shall be distributed to its members and such patrons in proportion to their patronage during said year on or before eight months and fourteen days after the end of such year. In the event the Board of Directors has established separate pools, departments or classifications, then the margins of each such pool, department or classification properly allocable to the business done with or for members shall be distributed to its members in proportion to their patronage of each such pool,
department or classifications during said year on or before eight months and fourteen days after the end of the year.
2. Margins made by the Association from a transaction (i.e. income from the lease of premises, investment in securities interest, or from the sale or exchange of capital assets) which is determined by the Board of Directors to be directly related to the Association’s business, will be deemed to be patronage sourced margins and, subject to a contractual limitation in loan or other financing documents, shall be distributed to members in proportion to their patronage during such period as the Board of Directors shall determine to by reasonable.
3. Margins made by this Association other than those describe in Sections (a)(1)-(2) above, after payment of the appropriate income tax thereon, may be retained by the Association at the discretion of the Board as permanent equity; paid in whole or in part as dividends on preferred stock (if any); distributed to members on such basis as the Board may determine, used to offset any loss from non-member business the Association has incurred as the Board shall determine, or treated in combination of the methods just described.
b. A member or patron’s “patronage” (as that term is used in these Bylaws) shall be determined as follows: the margins attributable to the providing of services to members (and any other patron with whom the Association contracts to deal on a nonprofit cooperative basis) shall be allocated based on their respective dollar value of agricultural products delivered; and the margins attributable to the procuring of supplies by the Association shall be allocated to each member (and any other patron with whom the Association contracts to deal on a nonprofit cooperative basis) based upon their respective dollar amounts(s) of such purchases of supplies or services.
c. Margins may be distributed in cash, preferred stock, capital fund credits or allocated reserves, or any combination thereof all as the Board shall determine.
d. 1. In the event the usual and ordinary operations of the Association for any
fiscal year should result in a net operating loss, such loss shall be allocated to all members (and any other patrons with whom the Association contracted to deal on a nonprofit cooperative basis) on the same basis as margins are distributable hereunder. Notwithstanding the foregoing, if the Association has separated its operations into pools, departments, or classifications, then a net operating loss in a particular pool, department or classification may be netted against a margin of another pool, department or classification: where, in the judgment of the Board, the patrons of one are substantially similar to the patrons of the other, the commodities or services involved are similar, geographical separation is limited and the various patrons are adequately informed of this risk-sharing arrangement before the loss transactions occur, or as allowed by the then applicable provisions of the Internal Revenue Code and regulations thereunder, if any. Losses actually allocated to a member or other patron may be recovered by the Association pursuant to the offset procedure described in Section 4 below, or by any other method of collection.
2. Losses produced by a transaction of the nature described in Section 2(a)(2) which are determined by the Board to be directly related to the Association’s business will be deemed to be patronage sourced losses. The Board in its sole discretion shall prescribe the basis on which said loss shall be treated, including, but not limited to: carry forward or carry back; reduction of preferred stock (if any), capital funds, or allocated reserves with or without regard to patronage and/or allocation to members and collection of the same from members as described herein. Notwithstanding the foregoing, such a loss may be netted against a margin of a pool, department or classification or against a margin from another transaction of the nature described in Section 2(a)(2) above which is determined by the Board to be directly related to the Association’s business in accordance with the then applicable provisions of the Internal Revenue Code and regulations thereunder, if any.
3. In the event of a casualty loss or any other loss not the result of the usual and ordinary operations of the Association, the Board in its sole discretion shall prescribe the basis on which said loss shall be treated including but not limited to, carry forward or carry back, reduction of preferred stock (if any), capital funds or allocated reserves without regard to patronage and/or allocation to members and patrons and collection of the same as described in Section 2(d)(1) above.
Section 3. Member Contributions Each member ((and any other patrons with whom the Association contracted to deal on a nonprofit cooperative basis) agrees to invest money from time to time in such classes of the Association’s preferred stock, book credits, capital funds or allocated reserves and in such amounts as the Board may from time to time determine to be necessary or proper to provide for the following: adequate capital for the Association, and acquisition of property and assets for the accomplishment of any or all of its purposes. Except for the payment of a non-refundable organizational fee and the initial purchase of a share of membership common stock and the required number of shares of Class B preferred stock by a member, the amount of such investment by any one member (and any other patrons with whom the Association contracted to deal on a nonprofit cooperative basis) in any one year shall be limited to the following: such uniform rate per unit or per dollar of value on such member or patron’s agricultural products marketed through the Association or on supplies procured by him from or through the Association as is provided in the various agreements between the Association and its member and such patrons, or as is assessed by the Association’s Board for any of the above-stated purposes; plus such member or patron’s patronage returns for such year. The terms and conditions of the Association’s stock, book credits, capital funds and other allocated reserves credited to members and patrons’ accounts shall be determined from time to time by the Board. Such terms and conditions shall include whether any such credits are to be permanent capital or redeemed in relation to year of origin (revolving fund plan), in relation to a share of total capital needs of the Association determined as equitable for each member or patron (base capital plan), or other plan of redemption, as determined by the Board to be reasonable.
Section 4. Right of Offset; Security Interest; Tax Consent The Association shall have the right to offset any indebtedness of a patron to the Association against: any sums payable by the Association to such patron; such patron’s book credits, capital funds, allocated reserves and/or preferred or common stock in the Association; and/or the cash portion of any patronage dividend payable by the Association to such patron. Each patron of the Association does hereby make, constitute and appoint the Association such patron’s attorney-in-fact for him and in his name, place and stead, for his use and benefit, to sign, endorse and deliver to the Association such portion of the cash portion of such patron’s patronage dividend as may be necessary to satisfy any indebtedness of such patron to the Association. Each person who hereafter applies for and is accepted to membership in the Association shall by such act alone consent and agree as follows: that the amount of any distributions with respect to his patronage which are paid in qualified written notices of allocation (as defined in 26 USC 1388©) and which are received by him or her from the Association will be taken into account by him or her at their stated dollar amounts in the manner provided, in 26 USC 1385(a) in the taxable year in which such written notices of allocation are received by him or her; and that the amount of any per unit retain allocations which are paid in qualified per unit retain certificates and which are received by him or her from the Association will be taken into account by him or her at their stated dollar amounts in the manner provided in 26 USC 1385(a) in the taxable year in which such qualified per unit retain certificates are received by him or her. Section 5. Reserves The Board shall have the power and authority to set up reasonable reserves for necessary purposes of the cooperative. These reserves may be either unallocated or allocated as follows:
1. Unallocated Reserve. An unallocated reserve shall be accumulated from the following sources: margins from sources other than patronage, margins from patronage on business done for the United States government or any of its agencies, margins from patronage attributable to patrons who are unidentified, and margins from patronage attributable to patrons who do not consent to take into account patronage dividends from the cooperative in the manner provided in 215 USC Section 1385.
2. Allocated Reserve. An allocated reserve may be accumulated each year from the margins from patronage on a basis which is either qualified or nonqualified under applicable federal income tax laws.
Section 6. Use of Funds The Board is hereby authorized to use any of the funds in the possession of the Association or any of the property or assets of the Association for any of the purposes or activities authorized by the Association’s Articles of Incorporation or Bylaws. Section 7. Unclaimed Funds Any monies or funds or rights or interest or property represented by any check (except one issued for the purpose of being a “qualified check” under the provisions of 26 USC 1388), or draft or stock certificate or book credit, capital fund or allocated reserve or other certificate
or other writing issued by the Association to any person, or called from such person for payment by the Association, which remains outstanding or uncashed or which after the Association has mailed such check, draft, certificate, notice of call or other writing to such person at his last known address remains unclaimed or undelivered shall revert to the Association at any time after one year from the end of the fiscal year during which such distribution or redemptions have been declared, at the discretion of the Board. Article XIII Parliamentary Authority The rules contained in the current edition of Robert’s Rules of Order Newly Revised shall govern the association in all cases to which they are applicable and in which they are not inconsistent with these bylaws and any special rules of order the association may adopt. Article IX Amendments These Bylaws may be amended at any regular or special meeting of the members by the affirmative vote of those members representing a majority of the membership votes voting thereon, provided that not less than twenty-five percent of the total membership votes vote thereon. Article X Fiscal Year The fiscal year of this association shall commence on the first day of January each year and shall end on the last day of December of that year.
SAMPLE MSU PRODUCERS COOPERATIVE Job Description Board of Directors
GENERAL RESPONSIBILITIES Board members serve voluntarily on behalf of the members. It is their responsibility to ensure that the MSU Producers Cooperative (the Cooperative) meets members’ needs in a manner that is safe, sound, secure and meets fiduciary responsibilities. The Board establishes the direction of the Cooperative by adopting policies that provide the overall framework within which Cooperative Management operates. At the direction of the Board President with full knowledge and disclosure; without financial gain, elected Board Members may assume Cooperative Management responsibilities as may be required. As a whole, Board members have responsibility for the general direction and control of the affairs of the Cooperative. General direction refers to establishing strategic policies that guide the Board President and the Cooperative Management in their responsibilities within the guidelines and limitations as set forth. The responsibility for control refers to the oversight of established policies. Each Board member has fiduciary duty as follows:
1. Duty of Obedience requires board members to be faithful to the Cooperative’s mission, ensuring that the mission guides all the board’s decisions. Board members must also ensure the Cooperative observes the law as well as its own bylaws and policies
2. Duty of Care requires board members to act with due care in fulfilling their tasks of
policymaking and monitoring the Cooperative operations. The standard in measuring this duty of care has been defined as being the same degree of care and prudence that people prompted by self-interest generally exercise in conducting their own affairs.
3. Duty of Loyalty requires board members to avoid using their position as directors to gain
personal advantage. This duty of loyalty means that business or investment opportunities that properly belong to the Cooperative cannot be diverted to the personal benefit of a director in a position to make a decision on behalf of the Cooperative. Duty of Loyalty includes the avoidance of conflicts of interest and/or the appearance of such conflicts.
. Board members establish the foundation for an effective working relationship between the Board, the President, and the Operations Manager. As such, each member will be proactive in fostering a collegial culture that respects and clearly delineates the roles and responsibilities of board members, elected officers, and management. Board members are subject to Term Limits of two consecutive three-year terms (6 years) with no lifetime cap and a mandatory one-year hiatus after the expiration of their terms. SPECIFIC RESPONSIBILITIES AND PERFORMANCE EXPECTATIONS/DUTIES
1. Attend monthly board meetings, the annual planning session, the annual membership meeting, and any other special meeting called at the direction of the President of the Board. If unable to attend a board meeting, then the President will be notified in advance of the meeting. Any Board member who fails to attend three consecutive monthly board meetings or a total of six, without reasonable excuse should be dismissed from the Board.
2. Maintain confidentiality of Cooperative information and member data. 3. Exercise good judgment in decision-making and independent judgment. 4. Operate with allegiance to the members and recognize that Board members individually
have no authority to instruct or otherwise impose expectations on the management, staff, or vendors.
5. Monitor management performance in setting and achieving operational plans and objectives.
6. Disclose immediately any conflict or perceived conflict of interest to the Board, dismiss oneself from the Board meeting during discussion, and refrain from voting on any issue related to such conflict.
7. Perform duties as outlined in bylaws. 8. Continuously increase and strengthen knowledge of the Cooperative and its services. 9. Establish operating policies that give direction to management. 10. Suggest possible nominees to the Board who can make significant contributions to the work
of the Board and the organization. 11. Help move meetings along by asking strategic questions and paraphrasing points for the
rest of the Board when needed. 12. Use Cooperative services and promote the Cooperative as a strong alternative to other
providers. 13. Promote Community Involvement for the Cooperative. 14. Prepare for Board meetings by obtaining and reviewing monthly Board packet information
prior to the meeting. 15. Actively serve on and participate in sub-committees, such as; membership, policy, business
planning, etcetera. 16. Participate in grass roots activities as needed.
BOARD MEMBER REQUIREMENTS • Member in good standing of the Cooperative • Meet minimum age requirement as specified in bylaws • Cannot have been convicted of a crime involving dishonesty or breach of trust • Has no legal action pending against the Cooperative. LEADERSHIP QUALITIES • General leadership and business skills experience • Passion for the Cooperative and serving members • Active learner and open-minded • Strategic thinker • Knowledgeable of basic financial information/performance • General knowledge of Roberts Rules of Order EDUCATIONAL REQUIREMENTS Each Board member and Supervisory Committee member is expected to participate in educational opportunities. Periodic education sessions will be provided to directors through the Laulima Center.
Hawaii Island MSU Producers Cooperative
CONFLICT OF INTEREST STATEMENT The standard of behavior of the co-op is that all Board and committee members avoid conflicts of interest between the interests of co-op on the one hand, and personal, professional and business interests on the other. This includes avoiding potential and actual conflicts of interest as well as reasoned perceptions of conflicts of interest. I understand the purpose of this Statement is to protect the integrity of the co-op decision making process and the membership’s confidence in the co-op Board and committee members. During the course of co-op business or activities and during Board meetings or if any situation arises that could be considered a conflict of interest, I will promptly disclose to the Board said situation where any interests in a transaction or decision (including but not limited to offers of employment, employment, contracts, lending or accepting credit, or other similar activities) where I, my family and/or any significant other, employer or close associate will receive a measurable benefit or gain. After disclosure, I understand I will be asked to refrain from entering into the Board discussion regarding the conflict of interest and I will not be permitted to vote on the question. I agree to abide with the decision of the Board regarding any conflict of interest. I understand this Statement is meant to enhance good judgment and I respect the Statement’s spirit as well as its wording. I have read and agree to abide by this conflict of interest policy. SIGNATURE:_________________________________________ NAME (please print):__________________________________ BOARD OR COMMITTEE POSITON:_________________________________ DATE:____________________________
SAMPLE MSU PRODUCERS COOPERATIVE
Policy: Delivery
This policy is intended to identify parties responsible for the safe, efficient delivery of product. Hours of operations are dependent on many different parties; as such specified hours are not practical. The MSU will provide all required documentation at point in time of delivery. Point of Delivery shall be; the threshold of the cooler door of the MSU. The connecting rail from the MSU to the Receiver’s rail is the responsibility of the Receiver. Delivery personnel are obligated to provide product handling to the cooler door of the MSU. Receiver is responsible for; handling of all products beyond the cooler door of the MSU.
SAMPLE MSU PRODUCERS COOPERATIVE
POLICY ON FIANACES AND CONTROLS
POLICY Prudent management of the financial resources of the MSU Producer Cooperative is a key responsibility of the Co-op Board. Members of the Cooperative, and those who would look over their shoulders, must have a confidence that decisions regarding Cooperative finances are sound and in keeping with good financial practices. AUTHORITY
1. The Board of Directors is ultimately responsible for the financial management of all activities.
2. The Treasurer is authorized to act on the Board’s behalf on financial and operational matters when action is required in advance of a meeting of the Board of Directors.
3. The Operations Manager is responsible for the day-to-day financial management of the organization. The Board authorized the Operations Manager to hire and supervise staff and independent contractors, bills, and receive funds.
4. The Treasurer is responsible for maintaining the bank accounts of the organization.
5. The Operations Manager is authorized to sign checks up to $2,500. Checks for amounts greater than $2,500 shall require the signature of the Treasurer.
6. The Board of Directors must authorize and binging contracts entered into by the organization.
FINANCIAL TRANSACTIONS WITH INSIDERS
1. No advances of funds to employees, officers, or directors are authorized. Direct and necessary expenses including travel for meetings and other activities related to carrying out responsibilities shall be reimbursed when approved in advance by the Board of Directors.
2. In no case shall CO-OP borrow funds from any employee, officer, or director of the organization without specific authorization from the Board of Directors.
SAMPLE MSU PRODUCERS COOPERATIVE
Policy: Operational Sites
All Operational Sites shall have a periodic review for animal containments, and Humane Handling Standards. All Operational Sites used on a regular basis shall be added to the MSU insurance policy as additional Named Insured.
SAMPLE MSU PRODUCERS COOPERATIVE
Policy: Payment Payment is expected on the day of operations. Members may be invoiced for services. Invoices are required to be paid within two (2) weeks. Additional services will not be offered for accounts past due.
SAMPLE MSU PRODUCERS COOPERATIVE
Policy: SCHEDULING
Scheduling of animals is necessary for the MSU in order to provide for consistent reliable services to our Members. Scheduling is encouraged two (2) or more weeks in advance of operations. Scheduling will continue up until the day prior to scheduled operations, on a space available basis. Unscheduled animals delivered to operations may be done on a time available basis, and will be subject to USDA overtime charges for that day.
MSU Producers Cooperative Animal Slaughter Agreement
By my signature hereon I certify the following: 1. I am the owner (or owner's authorized agent) of the following animal(s) to be slaughtered. Please group animal(s)
by species & list below, if more space is required check the box & continue list on reverse. Animal ID Species Animal ID Species ______________ ______________ ______________ _______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ _______________ ! Check here if list is continued on reverse of page.
2. I have knowledge of or access to a complete medical record of the animal(s) to be slaughtered and that no prohibited drugs have been administered to the animal. (see 5 below).
3. The animal(s) to be slaughtered are in good health to the best of my knowledge, or have the following medical conditions. Please list animal(s) ID and medical condition(s) below, if more space is required check the box & continue list on reverse.
(Note: some medical conditions may result in animal or carcass rejection by the USDA). _____________________________________________________________ ! Check here if list is continued on reverse of page.
4. That any species approved medication(s) or vaccine(s) administered to the animal(s) to be slaughtered have been given strictly in accordance with label directions and have exceeded their specified slaughter withdrawal period(s).
5. That any extralabel drug use (ELDU) has met the following criteria: a. A veterinary-client-patient relationship. b. That a veterinarian had direct supervision over the animal(s)'s treatment. c. That the ELDU drug is an FDA approved animal or human drug. d. That the ELDU drug was used for prevention, treatment, or control purposes, only when the animal(s)'s health was threatened. e. The ELDU drug is not prohibited in food producing animals. Prohibited drugs are: chloramphenicol, clenbuterol, diethylstilbestrol (DES), dimetridazole, ipronidazole, other nitroimidazoles, furazolidone, nitrofurazone, sulfonamide drugs (except approved use of sulfadimethoxine, sulfabromomethazine, and sulfaethoxypyridazine), fluoroquinolones, glycopeptides, phenylbutazone. f. The ELDU drug does not produce illegal food residues or present a risk to human health. g. I have proper documentation from a veterinarian showing the ELDU drug used, date(s) administered, dosage, route of administration, and slaughter withdrawal period. (Note: Deviation from ELDU regulations is an illegal action subject to prosecution by the FDA.) 6. Cattle only: the animal(s) to be slaughtered are less than 30 months of age, or I have informed CO-OP that the animal(s) are 30 months of age or older so that CO-OP can perform alternate post-slaughter processing to comply with FDA regulations. I understand that the CO-OP may revoke all rights and privileges accorded to CO-OP members, without compensation if I am found to have intentionally certified an animal that does not meet the above criteria. Furthermore, I agree to pay CO-OP within 10 business days of today's date for services rendered. Payment shall be in accordance with CO-OP's rates and policies in effect on the date of slaughter. Additionally, I will not market animals, their meat, or any other products or by-products, under the name of the Puget Sound Meat Producer's Co-op (CO-OP). Owner or Agent Name:_______________________ Farm Name:_______________________ Address:__________________________________________________________________ Contact Phone Number:(______)___________________Contact Name:______________________ Owner/Agent Signature:_______________________________ Date:____________________
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%Producer%Application%Form%!Producers!Note:!!The% producer��is%the%one%who%owns%the%livestock%at'the'time'of'slaughter.%%%You%must%also%���������������������Producer%Commitment%Pledge��%%!Name________________________________________Position__________________________!!Company_____________________________________Phone____________________________!!Address_______________________________City_________________________Zip__________!!Email!Address__________________________________________________________________!%%%Membership%Dues%(renewed&annually)! % $100!!Make%check%payable%to:%!�����Kaua`i!Meat!Producers!Association�!or!�KMPA�!!!Return%application%and%completed%Producer%Commitment%Pledge%to:%!The!Kaua`i!Economic!Development!Board!or!KEDB!!4290!Rice!Street,!Lihue,!Kaua`i,!HI!96766!!Attn:!Kaua`i!Meat!Producers!Association!%%%%
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Producer%Commitment%Pledge%
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Please&Note:&The&following&information&will&be&used&to&estimate&production&volumes&expected&in&service&to&its&members.&This&information&will&be&kept&confidential&and¬&used&for&any&other&purpose.&&Name:__________________________________________________________%
!Please!complete!this!chart!with!the!estimated!number!of!livestock!retained!on!Kauai!to!be!slaughtered!at!the!Andrade!or!Sanchez!facilities!but!processed!at!the!proposed!new!KMPA!processing!establishment!for!each!lot.!An!Explanation!of!how!to!use!the!chart!is!below.!
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!I,%___________________________________________,%hereby%pledge%to%make%every%effort%to%deliver%%
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according%to%the%specifications%detailed%in%this%Livestock%Performance%Estimate%chart.%
Livestock%Performance%Estimate
Example%%
Lot%#%%%%%%
John%Doe%1
Lot%# Lot%# Lot%# Lot%# Lot%#
Livestock!Species Cattle
Head!Count!Retained/Purchased 10
Date!Retained/Purchased 11/8/2012
Est.!Begin!Stocker!Weight 500
Stocker!Average!Daily!Gain 1.8
End!Stkr!&!Begin!Finisher!Weight 850
Calc.!Stocker!Days!to!Finisher 194
Calc.!Months!to!Finisher!Start 6.4
Start!Date!Finisher!Forage 5/21/2013
Finisher!Average!Daily!Gain 2.2
Enter!Finished!Weight!Goal 1,150
Calc.!Finisher!Days!to!Slaughter 136
Calc.!Months!on!Finish!Forage 4.5
Expected!Slaughter!Date 10/4/2013
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%Livestock%Performance%Estimate%Chart%Explanation%!In!the!above!Livestock!Performance!Estimate!Chart,!note!Green%cells!require!calculations,!non:green!cells!require!data!entry.!!
�! Enter!your!livestock!species!(Cattle,!Sheep,!Pigs,!or!Goats).!It!is!noted!that!the!chart!is!geared!for!cattle!but!other!livestock!can!be!accommodated.!
�! Enter!head%count!that!you!retained!and!will!own!at!the!time!of!slaughter!or!that!you!purchased!and!will!own!at!slaughter.!
�! Enter!the!Date!that!you!Retained!or!Purchased!the!livestock!for!slaughter.!�! Enter!the!Beginning!Stocker!Weight.!A!stocker!is!defined!here!as!a!steer!or!heifer!from!weaning!to!800:
850!pounds!a!year!to!a!year!and!a!half!of!age,!growing!frame!and!muscle!and!requiring!more!protein!in!the!diet.!
�! Enter!the!Stocker!Average%Daily%Gain%in!pounds.%Be!conservative.!Estimate!from!the!experience!of!others!if!necessary.!
�! Enter!the!transition!Weight!from!stocker!to!finisher.!This!is!about!where!70%!of!the!physiological!maturity!to!finish!weight!occurs!and!can!vary!by!body!phenotype!and!age.!It!is!the!point!where!the!finisher!diet!will!transition!from!less!protein!to!more!energy!(carbohydrates)!for!fat!deposition,!if!possible.!(This!may!take!a!few!years!to!refine.)!
�! Calculate!Stocker%Days!to!Finisher!by!subtracting!the!Beginning!Stocker!Weight!from!the!Ending!Stocker!weight!and!dividing!difference!by!the!Average!Daily!Gain.!
�! Calculate!the!Months!to!Finisher!Start!(End!Stocker)!by!dividing!the!Stocker!Days!by!30.5.!�! Calculate!the!Start%Date!for!the!Finisher!Forage!by!adding!the!Stocker!Days!to!the!Date!Retained!or!
Purchased.!�! Enter!the!Finisher!Average!Daily!Gain!in!pounds.!Again,!be!conservative.!Estimate!from!the!experience!
of!others!if!necessary.!�! Enter!the!Finish%Weight!Goal.!For!Heifers!it!will!be!about!150!pounds!less!than!for!Steers.!More!
important!than!to!enter!a!predetermined!weight!is!to!know!the!weight!YOUR!livestock!will!finish!given!fat!deposition!for!a!given!body!type!and!feeding!regime.!This!will!take!experience!but!generally!average!cattle!will!finish!on!forage!at!about!1,200!pounds!+/:.!!!
�! Calculate!Days!to!Slaughter!by!subtracting!the!Beginning!Finisher!Weight!from!the!Finished!Weight!Goal!and!dividing!the!difference!by!the!Finisher!Average!Daily!Gain.!
�! Calculate!Months!on!Finish!Forage!by!dividing!Finisher!Days!to!Slaughter!by!30.5.!�! Calculate!Expected!Slaughter%Date!by!Adding!Finisher!Days!to!Slaughter!to!the!Start!Date!Finisher!
Forage.!�! Enter!each!lot!of!livestock!across!the!chart!for!additional!scheduling.!!�! Coordination!with!other!Association!members!will!be!necessary!to!insure!consistent!supplies.!!
!!
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Pasture(Lease(Agreement(1.#Parties:#This(Lease(entered(into(this(________(day(of(__________________,(_______,(between(
________________________________________________________________________________,(Landlord,(
of_______________________________________________________________________________(address)(
and(
__________________________________________________________________________________,(Tenant,(
of(_______________________________________________________________________________(address).(
(
2.#Property#Description#The(Landlord(hereby(leases(to(the(Tenant,(to(occupy(and(use(for(pasture(purposes,(the(following(described(property:_____________________________________________________________________(____________________________________________________________________________(
____________________________________________________________________________(
consisting(of(approximately(__________(acres(situated(in______________________________((
and(on(any(other(land(that(the(Landlord(may(designate(by(mutual(written(agreement.(
3.#General#Terms#of#Lease#A.#Term.(The(term(of(this(lease(shall(be(approximately(_________days,(commencing(on(or(about(the________(day(of___________,(and(end(on(or(about(the(_________day(of_________.(The(exact(term(for(rental(computation(purposes(to(be(determined.(B.#Review#of#lease.(A(request(for(general(review(of(the(lease(may(be(made(by(either(party(at(least(________days(prior(to(the(final(date(for(giving(notice(to(terminate(the(lease.(
C.#Amendments.(Amendments(and(alterations(to(this(lease(shall(be(in(writing(and(shall(be(signed(by(both(the(landlord(and(tenant.(D.#No#partnership#created.(This(lease(shall(not(be(deemed(to(give(rise(to(a(partnership(relation,(and(neither(party(shall(have(the(authority(to(obligate(the(other(without(written(consent,(except(as(specifically(provided(in(this(lease.(
E.#Binding#on#heirs.(The(terms(of(this(lease(shall(be(binding(upon(the(heirs,(executors,(administrators,(and(successors(of(both(Landlord(and(Tenant(in(like(manner(as(upon(the(original(parties,(except(as(provided(by(mutual(written(agreement(otherwise.(F.#Transfer#of#property.(If(the(Landlord(should(sell(or(otherwise(transfer(title(to(the(farm/range(such(action(will(be(done(subject(to(the(provisions(of(this(lease.(
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G.#Additional#agreements#regarding#the#terms#of#lease:#____________________________________________________________________________#____________________________________________________________________________#____________________________________________________________________________#4.#Normal#Units�Maximum#Allowable:#Not$more$than$__________animal$units$shall$be$kept$in$the$pasture$at$any$time.$Violation$of$this$provision$shall$constitute$grounds$for$termination$of$the$lease$unless$the$Landlord$first$secures$in$writing$the$consent$of$the$Tenant.$Each$1,000$pounds$of$average$weight$for$the$pasture$period$shall$be$considered$an$animal$unit.$
#5.#Duties:#The$Tenant$agrees:$
!������������������������������������������ ������������������������������������������������� �� ������be$found$outside$the$pasture$on$at$least$three$occasions,$the$Landlord$may$request$its$removal. $
!���������������is/her$rights$and$duties$under$this$lease$without$the$written$consent$of$the$Landlord.$
!������� ���������������������������������ficient$to$determine$identity$of$ownership.$A$written$list$of$all$animals$beyond$weaning$age$entering$the$pasture$together$with$brand$description$and$classifications$according$to$breed,$age$grouping,$and$sex$shall$be$provided$to$the$Landlord.$Such$list$shall$be$kept$up$to$date$throughout$the$lease.$
!������������� ������������������������������������������������������� �ord$in$advance$regarding$number,$health,$sex,$breed,$and$age.$
$
The$Landlord$agrees:$
!������������������������������� �������� ������������������������������� ������������������� �������������are$brought$to$the$pasture$and$to$maintain$the$fences$during$the$pasture$season.$
!��������� ���� �������������������������������������������������������������this$subsection$shall$constitute$grounds$for$termination$of$the$lease.$
!������������������������������������������������������������������ ����� �plans$for$putting$any$male$animals(s)$into$the$pasture,$including$a$description$and$approximate$dates$of$entry$and$withdrawal.$Such$intentions$shall$be$made$a$matter$of$record$as$follows:$Description$of$bulls(s)K$Date$of$entryK$Date$of$removal. $
In$the$event$the$Landlord$should$wish$to$put$male$animals$not$described$above$into$the$pasture,$he$shall$give$all$owners$of$female$stock$notice$of$his$intention$to$do$so$at$least$_______days$in$advance$of$actually$doing$so.$Owners$of$female$stock$shall$then$have$the$option$of$removing$female$stock$without$liability$for$any$rental$charges$on$the$animals$removed$for$the$remainder$of$the$season.$Failure$to$remove$female$stock$during$the$specified$length$of$time$shall$be$interpreted$to$mean$that$the$owner$has$not$objected$��������� ��� "������ �intention$and$this$contract$shall$continue$to$be$binding.$
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6.#Both#Agree:#��Not#to#obligate#the#other#party.!Neither!party!hereto!shall!pledge!the!credit!of!the!other!party!hereto!for!any!purpose!whatsoever!without!the!consent!of!the!other!party.!Neither!party!shall!be!responsible!for!the!debts!or!liabilities!incurred!or!for!damages!caused!by!the!other!party.!
����������������!Additional!responsibilities!for!each!party!shall!be!divided!as!follows:!
Responsibilities!Livestock!Owner!(Tenant)!
Pasture!Owner!
(Landlord)!
Livestock!Manager!
Inspect!fences!not!less!than!once!per_________! !! !! !!
Furnish!labor!for!repair!of!fences! !! !! !!
Furnish!material!for!repair!of!fences! !! !! !!
Furnish!material!for!repair!of!water!system! !! !! !!
Furnish!salt!and!minerals! !! !! !!Count!livestock!not!less!than!once!per________! !! !! !!
Call!veterinarian!in!case!of!emergency! !! !! !!
Pay!veterinary!expenses! !! !! !!
Provide!loading!and!unloading!facilities! !! !! !!
Furnish!supplementary!feed,!if!needed! !! !! !!
Notify!other!party!of!shortage!in!count! !! !! !!
Maintain!liability!insurance! !! !! !!!
7.#Right#of#Entry:#Both!parties!and!agents!or!employees,!therefore,!shall!have!the!right!to!enter!the!pasture!at!any!time!for!any!legitimate!purposes:!(a)!of!consultation!with!the!TenantK!(b)!of!making!repairs,!improvements,!and!inspectionsK!and!(c)!after!notice!of!termination!of!the!lease!is!given,!of!performing!customary!seasonal!work,!not!of!which!is!to!interfere!with!the!Tenant!in!carrying!out!regular!operations.!Due!care!shall!be!exercised!to!ensure!that!gates!are!closed!upon!entering!and!leaving!the!premises.!Landlord!may!request!right!of!entry!to!hunt!and!fish.!
8.#Computation#of#Rent:#Payment#for#Gain#Livestock!shall!be!weighed!prior!to!entering!the!pasture!at___________________________!and!upon!leaving!the!pasture!at!_______________________.!Weighing!shall!be!at!the!expense!of!the!livestock!owner,!and!in!the!
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presence'of'the'Landlord'or'his'representative.'A'3%'shrink'shall'be'applied'to'both'weights.'The'net'increase'in'weight'will'be'paid'at'a'rate'of'_______'per'pound.'
!!9.!Payment!Schedule!Rent'shall'be'due'and'payable'when'all'stock'has'been'removed'by'the'livestock'owner'(Tenant).!!If'rent'is'not'paid'when'due,'the'Tenant'agrees'to'pay'interest'on'the'amount'of'unpaid'rent'at'the!rate'of_________'percent'per'annum'from'the'due'date'until'paid.!
10.!Arbitration!In'case'of'disagreement'relative'to'any'provision'of'this'lease,'such'dispute'shall'be'referred'to'an'arbitration'committee'composed'of'one'member'selected'by'each'party,'and'a'third'member'elected'by'the'other'two.'The'decision'of'the'arbitration'committee'shall'be'binding'upon'the'parties'of'this'lease.'
'
11.!Execution!of!Lease!Executed'in'duplicate'on'the'date'first'above'written:''
____________________________________________'Tenant/Livestock.owner..____________________________________________'Landlord/Pasture.owner.
.
____________________________________________'Livestock.Manager.
.
'
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!Livestock!Production!Affidavit!
!Owner/Seller___________________________________________!Ranch/Farm!___________________________________________!Address_______________________________________________!! !!!_______________________________________________!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!zip!code!Phone!number!____________________!!!!!!!__________________!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!daytime!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!evening!!!!!!!!!!!!!!!Bill!of!Sale!Number__________________________!!!I%declare!under!penalty!of!perjury!as!the!owner/seller!or!authorized!agent!that!the!livestock!referred!to!in!the!attached!Bill!of!Sale!of!this!Affidavit!throughout!their!lives!from!birth!to!this!date:!!!
�! Have!never!been!����������������������������������!Confined!Animal!Feeding!Operation!(CAFO)!����������������������������������������������� ���� ��������������������������������������������!
�! Have!never!been!fed!subJtherapeutic!doses!of!antibiotics!!�! Have!never!been!administered!artificial!hormones!or!other!growth!enhancers!!�! Have!never!had!access!to!protein!supplements!that!contain!animal!byJproducts!!�! Have!never!been!fed!grain!or!grain!byJproducts!!�! Have!been!raised!and!handled!humanely!!�! Are!in!general!good!health!and!free!from!any!apparent!injury!or!disease!as!determined!through!visual!appraisal!or!other!records!
!!!On!this!date,!before!me!as!authorized!livestock!purchasing!agent!for_____________________,!the!undersigned!owner/seller!attests!that!all!information!given!is!a!true!and!accurate!description!of!the!livestock!described!in!attached!Bill!of!Sale.!!!!!________________________________!!!!!!!!!!!!!_________________________________!Owner/Seller!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Buyer!!___________________________!!!!!!!!!!!!____________________________!Date!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Date!!
Date Bill(of(Sale(#
Name NameAddress AddressAddress AddressPhone Phone
Yes NoFailure(to(disclose(a(lien(of(mortgage(may(be(punishable(as(a(gross(misdemeanor.
It(is(understood(and(agreed(that(the(attached(Livestock*Production*Affidavit*referred(to(is(by(this(reference(hereby(made(part(of(this(Bill(of(Sale.
The(seller(shall(be(responsible(for(any(loss(or(damages(incurred(by(the(buyer,
including(attorney's(fees(and(costs,(in(the(event(any(of(the(declarations(contained(in(the(attached(affidavit(are(untrue.
I(certify(that(I(am(the(lawful(owner(and/orauthorized(seller(of(the(described(livestock.
SellerVOID(IF(ALTERED:(Any(false(of(forged(information(on(this(Bill(of(Sale(may(be(punishable(as(a(felony.
Are(the(above(livestock(subject(to(a(lien(or(mortgage?
If(applicable(enter(name(of(any(lien(holder:
Indemnity*and*damages.
Livestock(Bill(of(Sale
Total(Sale(Price
Individual**ID*or*Ear*Tag*Numbers
Total**Weight
Price*per*Cwt
Price*per*Each
Total*Price
The(undersigned(Seller(hereby(sells(and(transfers(to(buyer(all(right,(title,(and(interest(in(the(livestock(identified(and(described(as(follows:(
Number Kind Breed SexBrand/**Location*
Owner/Seller Buyer
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Kaua`i!Grown!Cull!Cow!Selection!Criteria!
!Cull!cows!currently!represent!the!largest!local!meat!products!on!Kaua`i.!The!following!criteria!
with!accompanying!Affidavit!would!qualify!cull!cows!for!the!Kaua`i!Grown!program.!!
!
Within!a!Body!Condition!Score!(BCS)!range!of!2.5!to!5.5,!that!is!carrying!some!condition!
��������������������� �,!tha���� ����� �� ���� ���!
Have!a!live!weight!within!the!range!of!1,000!to!1,500!pounds!
Do!not!have!a!terminal!condition!
Are!not!disabled,!lame,!or!wounded!
Have!no!apparent!bruising!
Do!not!have!excessive!udder!problems!
Do!not!have!cancer!eye!or!other!advanced!eye!lesions!
Are!discounted!$20!per!head!if!vaccination!injection!sites!are!found!in!the!rump!and!not!neck!
Have!cleared!proper!withdrawal!times!for!vaccines!
Are!discounted!$10!per!head!if!branded!on!ribs!
Do!not!have!large!or!protruding!horns!
Do!not!have!frothy!mouth!
Have!clear!title!and!are!brand!inspected!
Are!sorted,!and!ready!for!inspection/price!determination,!if!applicable!!