The Agricultural Utilization Research Institute (AURI) and the United States Department of Agriculture’s Agricultural Marketing Service (USDA-AMS) have been collaborating for more than a year on a series of projects to support local, regional, small and medium scale meat and poultry processors in the Upper Midwest.
Spurred by several economic and demographic developments in the industry, the partnership aims to strengthen the competitiveness of small and medium meat and poultry processors in Iowa, Minnesota, North Dakota, South Dakota and Wisconsin. AURI is one of only six USDA-authorized technical assistance providers in the country. Special focus will be given to identifying the needs and challenges facing business owners, spotting gaps in resources and offering solutions.
AURI and USDA-AMS are working together on two cooperative agreements. The first agreement lays out four key objectives: (1) create a regional advisory taskforce, (2) form a finance working group, (3) conduct a needs assessment and literature review and (4) develop a resource map. The second agreement creates a framework to provide ongoing, individual technical assistance to processors. Work on the first agreement ends early next year and the second agreement runs through 2026.
In the first agreement with USDA-AMS, AURI established a regional advisory taskforce to review and advise on the activities of the cooperative agreement, produce specific deliverables custom designed to grow the Upper Midwest’s processor industry, increase revenue and leverage existing networks to maximize the reach of the project.
A finance working group studied some of the most important factors for local protein processors to consider when starting or expanding a business. The group compiled a list of the essential variables vs. expenditures and permits businesses should consider before expanding or constructing new processing sites. Work was also completed to catalogue financial reporting structures to provide clarity, establish a benchmarking pilot on how processors are performing compared to their peers and identify strategies on how businesses can improve their operations.
As part of the project, AURI staff facilitated focus group sessions and interviewed industry stakeholders to prioritize and identify supply chain gaps. They also reviewed existing resources and literature to gain a more complete understanding of the opportunities that exist to enhance resiliency in the livestock processing industry.
AURI also developed a database of existing intellectual and physical resources available to processors. This information was categorized by the type of service provided – like education and training, legal and regulatory assistance, financial assistance, business development assistance, technical and product development assistance, policy/advocacy, engineering assistance and market assistance. The database is a free, searchable online resource available at: auri.org/resource-database/.
To provide direct support to the meat processing supply chain, AURI hosted a series of educational courses on common business topics for small and midsized processors like business development, labeling, packaging and product development.
The second collaborative agreement between USDA-AMS and AURI provides a full range of technical assistance to protein processors in support of project development. The USDA-AMS invested $25 million across the U.S. on this project and AURI was chosen as one of the official technical assistance providers. There are four focus areas with this collaboration: (1) federal grant application management, (2) business development and financial planning, 3) technical and operating support for meat and poultry processing and (4) supply chain development. AURI’s experts help clients with specific issues under this cooperative agreement. So far, AURI has assisted 50 businesses.
To help meet the goals outlined in these USDA-AMS cooperative agreements, AURI hired new staff to work closely with the region’s small to medium sized processors.
Meat Innovation Specialist Clay Newton provides clients with product development and scale up assistance, education and training coordination. He also manages AURI’s meat laboratory in Marshall, Minn. He is proficient in the slaughter, fabrication, processing and sales of beef, pork and lamb, including packaging and displaying products in the retail space.
He works with clients on a host of issues including assistance in clean labeling, product formulation, recipe design, workflow process, cold storage, business planning, food safety and evaluating capital investment for new equipment purchases.
“I was brought on to add some hands-on expertise and to help processors when they have specific questions. Sometimes it is as basic as ‘We have this product that we make, now how do we start selling it?’ I was given the opportunity to help smaller plants achieve their goals,” Newton explains. “It is very exciting and rewarding work.”
Laura Bachmeier is AURI’s Business Development Director of Meat. In this role, she assists in advancing the value-added meat industry for the purpose of rural economic development by providing meat science leadership through education, training, exploring new meat innovations and developing professional networks.
“When we were seeing the largest impacts of the COVID-19 pandemic on the meat and poultry supply chain, it was critical for AURI to understand how to navigate these obstacles and put together some recommendations on the best approach to tackle and address these problems,” Bachmeier notes.
Kim Nesvig is a Project and Resource Manager and coordinates AURI’s role as a technical assistance provider for the USDA-AMS cooperative agreement that supports the Meat and Poultry Processing Capacity Technical Assistance Program. He is the first point of contact with potential applicants to USDA-AMS’s grant programs and coordinates and provides technical and reporting assistance.
Nesvig says a significant part of the work in the technical assistance cooperative agreement falls under the category of supply chain development. Small and medium sized processors faced several hurdles as a result of the COVID-19 pandemic and the USDA has made an intentional effort to address the issues that emerged.
“There are so many considerations that are connected to the supply chain,” Nesvig says. “Finding distributors, getting equipment, purchasing animals and then shipping them. Some producers were shipping cattle hundreds of miles to get them processed. That is not a feasible solution in the long term. Achieving competitiveness in the marketplace for small and medium processors is very challenging. Understanding those bottlenecks and helping alleviate some of those issues is where AURI can really provide value as an organization.”
AURI’s work with a family meat business near Waseca, Minn. is an excellent example of how the meat team is serving the needs of processors through the collaborative agreements with the USDA-AMS. The family owns a company called The Meatery and makes bacon from pigs on their farm. They recently approached AURI for assistance in scaling up and taking the product to market. The AURI team advised on a host of issues including recipe and process workflow, product sampling, labeling and securing a cold storage locker. The Meatery is also working with a spice blending company to expand the product line further with sausages.
“Very small processors wear 10 different hats and work long hours,” says Bachmeier. “So many of our clients are skilled at cutting meat and want to expand their businesses, but they need assistance on specific things to achieve that goal. Whether it’s dealing with a bank to get financing or obtaining a market assessment, these are all critical pieces. We sit down with our clients and figure out how we can make their dreams a reality so they can grow their business and support their families and their communities.”
According to Bachmeier, a significant portion of the work in the first cooperative agreement is complete.
“We plan to continue the conversations with our regional advisory task force in the Upper Midwest region. As the members are engaged and the dialogue is strong, we look forward to continuing to learn from each of the states and discovering what is working well and what further support we can provide to continue the collaborative efforts,” she explains.