Joseph grocer airs co-op slaughterhouse plan

By Katy Nesbitt, The Observer September 24, 2010 07:05 am
Troy Berglund, owner of Mt. Joseph Family Foods, wants to tap into the local food market and start a new business.

His idea is to bring a mobile slaughter unit to Joseph, providing local ranchers the opportunity to process their cattle in Wallowa County and market their beef locally and regionally.

The USDA has recently changed some of its requirements, allowing smaller processing plants to be built. Berglund said 83 percent of the nation’s cattle are processed at 22 plants owned by three companies, which causes beef to travel hundreds of miles before it makes it to the dinner plate.

“The idea has been kicked around Wallowa County for around 30 years,” Berglund told approximately 50 ranchers Tuesday night at Enterprise’s Cloverleaf Hall. “Many locals desire to have slaughter facilities closer by.”

Berglund has been in the meat-cutting and grocery business all of his adult life. He moved to Joseph five years ago when he bought Mt. Joseph Family Foods.

One of the changes the USDA made recently is that meat cutters no longer have to pay for mileage and salaries for inspection. They are only billed for overtime hours that an inspector may incur, Berglund said.

The proposed facility would create living-wage jobs, perhaps as many as 25, Berglund said. It would also strengthen the local livestock industry and add value to local meat products.

“I want to set up a cooperative, member-owned company and make the livestock industry more profitable so ranchers can have a fatter bottom line,” he said.

Berglund said he plans on spending 60 to 90 hours with Myron Kirkpatrick, Wallowa County Business Facilitation facilitator, on the business plan.

The site Berglund proposed for the new facility would be on land near the Chief Joseph rodeo grounds on the old mill site. Adequate power and water are available there, making it a good location choice.

“We’d be making use of vacant real estate,” Berglund said, “while making $12,000 profit available for the Chief Joseph Days rodeo committee.”

Berglund plans to pay $1,000 a month rent for the site.

The information Berglund presented showed that the building and land development would cost approximately $60,000. The mobile slaughter unit, built by Walla Walla’s Modular Food Systems, would run $840,000, and small wares and employee attire would be in the $20,000 range. Total funds, he said, would be about $920,000 as opposed to a fixed  bricks-and-mortar site that would run around $1.2 million.

He is looking for 40 stockholders to join the co-op at $10,000 each for part of the initial funding. Other funding could be accessed through a $500,000 bank loan and available USDA grant money could be applied for to the tune of $200,000.

“I’m a real believer in co-ops,” said Berglund, who has experience with member-owned companies like WinCo. The meat processing plant would function as a non-profit co-op.

Profits would be distributed to shareholders as a patronage rebate at the end of the fiscal year, Berglund said. To break even, 75 head a month would need to be processed. For real profit to be realized, the plant would need to handle 100 to 125 head a month.

OSU Extension Agent John Williams said the county raises 22,000 to 25,000 weaned calves and yearlings a year.

The emphasis would be on both primal cuts, Berglund said, and ground beef.

Currently, Joel Huesby, CEO of Thundering Hooves processing plant and Modular Food Systems, said that he is buying cattle for $.90 per pound, live weight.

Once you have the USDA stamp, Berglund said, you can market the meat products under several different labels, either specifying a specific ranch or under the name of the non-profit.

He said the facility would be able to handle not only beef but sheep, goats and hogs. Berglund said the operation could also expand into using his existing smoker.

Huesby said he views small slaughter houses as the microbreweries of meat packing.

“Though microbrews cost more than national brand beers,” Huesby said, “they taste better in my opinion.”

Last week, Huesby was interviewed by the New York Times.

“Local is a huge driver these days with the cost of transportation and fuel,” Huesby said.

Besides added costs, the “locavore” movement is huge throughout the country, Huesby said.

“People want to know where their product is coming from.”

Huesby is a fourth-generation Washington rancher who believes that by localizing meat processing “we are positioning ourselves for change.”

For more information on the proposed meat-packing co-op, call Berglund at 541-432-0740.