What You’ll Learn About Here

  • Federal and state meat inspection requirements
  • Federal and state rules for poultry inspection
  • Custom processing of livestock
  • Special issues in labeling and marketing livestock products
  • State and local rules on the sale of fresh eggs by producers
  • State and local rules on the sale of milk and other dairy products.

Many families involved in direct farm marketing know the customers interested in purchasing fresh wholesome farm-raised food often want to obtain meat and poultry products.  Customers say things like “I want a chicken that tastes like what I remember eating at grandma’s farm.”

But for farm producers who raise meat, poultry, eggs and dairy products there can be much uncertainty about what products can be sold and when state or federal inspection is required.  The purpose of this chapter is to examine a range of legal and regulatory issues associated with various forms of direct marketing of meat and dairy products.  The chapter also gives advice on which forms of marketing present fewer risks of legal or regulatory scrutiny.  It also suggests  steps you can take to maximize your opportunities to take advantage of these valuable markets.

Introduction – The U.S. Approach Toward Meat Inspection

There are many reasons why it is important to discuss the opportunities for the direct farm marketing of meat, poultry, eggs and dairy products.  These reasons include:

First, it can provide opportunities for producers to market higher value products using methods which result in more of the value being retained on the farm;

Second, the production of livestock is often part of a well-designed, diversified and sustainably operated farm, which means farmers need to have markets for these products;

Third, more consumers are interested in buying products with special attributes, such as meat and poultry raised without artificial growth hormones or raw milk, which may only be available through non-traditional marketing outlets, such as direct farm marketers; and

Fourth, state and federal laws contain a number of special provisions and exemptions designed to create opportunities for the direct, small-scale marketing of such products.

To understand the laws and regulations relating to the direct marketing of meat and dairy products, it is important to consider the underlying purposes of the federal and state meat inspection laws and how they typically apply to the sales of these products through traditional marketing channels.  By doing so, it is possible to identify why and when exemptions for various forms of direct farm marketing may be appropriate or possible.  It is also necessary to consider some of the unique methods of production  and marketing, for example raising “free range” chickens and “natural meat”,  and pre-selling live animals to take advantage of custom-processing by local meat lockers, developed by direct farm marketers involved in livestock production.

As the starting point, it is important to recognize that there are three objectives underlying most government regulations relating to the inspection of meat and livestock products:

First, to prevent the sale (or movement into commerce) of adulterated, contaminated, or otherwise unsafe livestock products;

Second, to establish minimum standards for the production, slaughter, processing, and marketing of these products, to insure the safety of consumers; and

Third, to create a system of licensing, inspection, and labeling which makes it possible to identify the source of a product if a public health problem should arise.

In order to achieve these objectives, federal and state meat inspection laws have been designed based on the following objectives:

  • identifying which products and which steps in the processing chain will be subject to government regulation,
  • establishing the minimum standards necessary to protect public safety and protect the integrity and wholesomeness of the products,
  • identifying which products or forms of production or marketing will be exempt from some or all of the regulations,
  • providing guidelines for the labeling and marketing of products to allow for the communication to consumers of important information,
  • allocating authority and responsibility between the federal, state, and even local agencies involved in health inspection, and
  • creating a system of inspection, record-keeping, monitoring and enforcement, which allows the government to fulfill the responsibility to protect public health.

Within this legal and regulatory system, the issue of who actually produces the animals or the products in question is not a primary consideration.  The main concern is insuring the safety of the products being marketing and protecting consumers from food safety risks and misbranded or adulterated products.   While the reality may be that the costs of complying with some of the minimum standards have a disproportional impact on smaller scale processing facilities, thus leading to more concentration in processing and marketing of livestock products, this has not necessarily been the intention or purpose of the rules.  Discussions with state meat inspection officials do not reveal any underlying bias against small processors or producers involved in direct farm marketing of meat products.  Instead the discussions indicate that as long as necessary steps are taken to insure the safety of the products being sold, and as long as producers comply with exemptions or labeling requirements which might apply, then government officials are generally supportive of local processing and direct marketing of meat products.

In many states, it is the official state policy to increase the marketing of “value-added” products such as meat, poultry, and dairy products, meaning state officials may try to help foster these forms of marketing.  However, it is important to recognize that the converse is also true.  To the extent that producers try to circumvent or avoid inspection requirements or other food safety rules which apply to their meat products, such as selling uninspected meat to retail outlets – creating the potential for public health risks, they can expect government officials to enforce the rules.

Producers involved in direct farm marketing may feel like the rules are stacked against them or that they favor the largest operators.  While this may be true in some instances, there are opportunities for producing and marketing these products – as long as you know the laws and comply with whatever rules apply to your operation or product.

Federal and State Meat Inspection and the Custom Processing Exemption

One of the central issues for farmers interested in direct marketing of products such as meat is knowing what type of inspection is required before a product can be sold.  The answer to this question is fairly simple.  There are three options for the inspection and sale of meat products.  The first two options are:

  • livestock slaughtered and/or processed in a federal inspected facility can be sold in inter-state commerce, meaning that it can be sold anywhere in the U.S., subject to labeling requirements;
  • livestock slaughtered and/or processed in a state inspected facility can be sold only within the state in which it was processed.  This is known as an intra-state sale.

The effect of these two options is that meat processing plants can decide which form of license to obtain – a federal license granted by the USDA or, for those states which offer state inspection programs, a state license.  In those twenty-three states which do not have state meat inspection programs the only option is to obtain a federal license.  In states which do operate their own programs, as a general rule, the larger the processing plant the more likely it will be a federal plant, allowing interstate sales.  Because federal inspection allows unlimited sales of products these rules do not necessarily provide any unique provisions relating to direct farm marketing.  On the other hand, state inspection programs deserve closer scrutiny.

A) Intra-State Sales of State Inspected Meat

If cattle are butchered at a facility licensed by the state of Iowa, on a day when the state meat inspector is present to observe the animals being processed, then the resulting meat products will bear the state inspected shield.  The meat can then be sold commercially to any consumer by any method – direct, wholesale or retail – but only as long as the sale happens in the state of Iowa.  Unlike the exemption for small-scale processing of poultry, which is discussed in a later section, the state-inspected meat provisions do not limit the quantity of meat which can be processed and marketed  under this provision.  The only limitations are on the location of marketing.

As a result of the difference between federal and state licensing for processing facilities, producers interested in direct marketing of meat, such as beef and pork, need to determine where and how they want to market their products. Then they have to identify a federal or state processing plant which can accommodate their needs.  While the number of inspected and licensed meat processing facilities may have declined in recent years, there are still many plants in operation.  For example, in Iowa there are over 100 federally licensed meat processing facilities and 135 official state licensed facilities in addition to over 100 custom butchering facilities.

B) Custom Processing of Livestock

The third option for the processing and sale of meat concerns custom processing by local meat lockers.  In most agricultural states the existence of local meat lockers is a traditional part of farming culture.  Many farm families customarily take a steer or two and a few hogs to town to have them processed for their own use or for other family members.   In Iowa there are over 100 custom meat lockers still in operation.  These facilities are required to meet state standards in terms of the equipment and facilities for the slaughtering and processing of meat and the plants are inspected periodically by state officials.  However, the animals being processed are not subject to inspection by state officials either before or after slaughter.  Because the animals are being processed for the personal consumption of the owners who deliver them to the facility, and the meat will not be sold to someone else or “move in commerce” no inspection is required. All of the meat packaged by the custom processor must be delivered to the owner and be stamped with the label “not for resale.”

There are several reasons why this “custom processing” exemption from state and federal meat inspection rules is important:

First, in many states the number of meat lockers is still significant, meaning producers shouldn’t have difficulty finding a locker nearby to process animals;

Second, because most lockers are small-scale family operations, they are flexible and willing to work with producers who may have only a few animals or who have other special requirements for the animals involved; and

Third, and perhaps most importantly, the exemption is commonly interpreted to allow producers of the animals to pre-sell portions of the live animals to other consumers before they are processed into meat.  This means producers can market portions such as quarters or halves of beef, then have the animals processed, and then deliver the meat to the purchasers, without being subject to state or federal inspection.  This allows producers to use local lockers which may be close to their farms rather than having to transport animals farther away to larger federally licensed plants, which may not want to bother with processing individual animals on a custom basis.  Many farmers have developed significant direct marketing programs for meat – often known as “freezer meat” – using the local custom processing exemption.

There are some important restrictions for using this technique, which may be interpreted differently depending on your state.  These concern such things as: the pricing method which can be used to sell the meat, the manner in which the meat can be advertised for sale, and the requirement that sales be for a portion of the live animal rather than for a quantity of meat.  Some states require the meat to be sold using a live weight price as opposed to a price per pound for cut of meat.  The restriction that customers must buy a specific portion of the animal can also present difficulties for customers who do not have freezer space to hold a quarter or for those who do not want a full range of meat cuts but instead would like to choose which cuts they buy.  States may also require the “owner” – in this case the customer – to be the one who pays the processing charges.  These conditions may limit how the meat can be priced and marketed.  States may also restrict use of the exemption to producers and their friends and relatives, which may limit the ability to place advertisements or otherwise solicit sales.

While these conditions may restrict use of the custom processing exemption, experience shows that livestock producers across the country have developed very successful direct farm marketing programs for the sale of meat products.  As a general rule state meat inspection officials have plenty of work on their agendas without worrying about local direct sales of custom processed animals.  As long as producers do not try to sell this meat into commercial or retail outlets, which requires state or federal inspection, they should not draw the attention of state officials.

The ability to communicate directly with purchasers about the quality or identity of the meat and to promote the unique traits of the animals involved – such as no use of antibiotics or artificial growth hormones – makes custom processing a powerful form of marketing.  One additional benefit of the method, is that because the meat is not considered to be moving in commerce, producers are not limited in the claims they can make about the product or in the information provided.  The only real restriction on the claims you can make is that they must be truthful.  If they are not, you could be subject to a private action by the customer for fraud or even subject to a state action for fraudulent marketing.  One other restriction producers should keep in mind is that if you sell meat which is unfit for consumption or which otherwise results in a complaint by the consumer, the state can inspect your facility and hold you responsible for what has occurred.  The necessity of selling only wholesome, safe foods must always be on the mind of direct farm marketers.

Two Developments Affecting Meat Inspection: HACCP and the Interstate Sale of State-Inspected Meat

While many livestock producers may find the custom processing exemption sufficient for their needs, if you who want to market meat at farmers markets or roadside stands, or to retail outlets, restaurants, or institutional buyers, you will need to comply with state or federal meat inspection requirements.  For those producers centrally located in a state or who do not want to market in ways which require inter-state movement, such as by mail order, then using state-inspected facilities should be sufficient for their needs.  But for other marketing approaches producers will need to locate a federally inspected facility which can accommodate their processing needs.  A brief discussion of some of the history behind HAACP illustrates how it might impact direct farm marketers.

E. coli 0157:H7 incidents involving ground beef brought into focus concerns about whether the traditional system of government meat inspection was adequate to identify possible meat safety problems and protect public health. This system was described as a “poke and sniff method” which relied on the physical examination of animals before and after slaughter by federal or state inspectors located in the meat processing plants.  The inspectors were responsible for making sure the processors complied with the various inspection and operating standards. In 1996, in response to growing concerns about the adequacy of this system, government and industry adopted a different approach to inspection.  This approach is known as HACCP, which stands for Hazard Analysis and Critical Control Points.  Under this system, processors are required to analyze their practices and identify which steps are most critical for the possible creation or elimination of hazards, and then develop standard operating procedures to manage these processes.  The primary responsibility for implementing these procedures and documenting compliance with them rests on the operators of the plants.  The role of the government inspectors shifts from doing the physical inspections to monitoring the processors’ compliance with their operating plans.  The focus of the whole system is on the ultimate safety of the products being produced.  Under the new rules adopted by the USDA all federal and state licensed facilities have to adopt HACCP based procedures.

The shift to a HACCP approach to meat inspection is significant both for the culture of the meat processing industry and for government inspectors.  Instead of relying on the classic “command and control” approach of government regulation, the primary responsibility for meat inspection has shifted to the processors.   From the standpoint of government meat inspectors their role has now shifted to being food safety specialists.  While the system has its critics and raises some uncertainties, it is now being implemented all across the U.S.  It may have several impacts on the availability of meat processing facilities, perhaps the main one being that many small-scale plants may choose to go out of business rather than make the shift, due either to the costs required or an inability to switch to a culture of self-regulation based on documenting compliance with operating plans.  Producers involved in meat production should be aware of this shift and pay attention to how it may affect the processing facilities with which they do business.

The best source of information on the operation of the meat inspection laws in your state is the USDA Food Safety and Inspection Service (FSIS) office, located in your state capitol, or the state meat inspection officials.  Currently twenty-seven states operate some form of a state meat inspection program, and the names and addresses of the officials in charge of those programs are included in the Appendix.  In states which do not have state- inspection programs meat inspection is handled entirely by the USDA.

Federal and State Rules for the Inspection and Sale of Poultry

It is important to examine the direct marketing of poultry – primarily chickens, but also turkey, ducks and other birds sold for eating – because for many farm families engaged in direct farm marketing, poultry is an important commodity.  Raising poultry – especially chickens – makes an excellent enterprise, even for the smallest farm operation.  The birds do not take up much space, they can be fed with products from the farm or garden, their supplemental diet and health care requirements are minimal, they can be fun to raise, especially for children, and there is a ready market for both meat and eggs.  Not just is there a market, many producers are finding that consumers are especially interested in obtaining fresh locally produce chickens and will pay prices well above those charged in stores to get the type of birds which satisfy their desires.  The strong interest both in raising poultry and buying it directly from farmers is evident at farmers markets and other direct marketing venues around the country.  This topic has been the subject of many articles in the farm press for small farms and direct farm marketing.  The work of people like writer and poultry farmer Gene Logsdon of Ohio and Joel Salatin of Polyface Farm in Virginia, who has promoted pasture raised chicken through his books and seminars, is especially valuable in the resurgence of interest in raising poultry.

The good news for producers interested in producing and marketing poultry on their farms is that the federal and state laws concerning the inspection of poultry products include a number of exemptions which support such marketing efforts.  The federal exemptions are found in 9 CFR §381.10.  The most important exemption is one which allows any producer to raise and process on the farm 1,000 birds for sale to customers.  The bad news – if there is any – is that the number of birds which can be produced and marketed under these exemptions is limited.

One problem is that the federal exemptions, especially for direct marketing of between 1,000 and 20,000 birds, are so poorly written it is hard – even for the government officials – to determine exactly what they mean.  One state meat inspection official describes them as “horrifically written.”  But even with the confusion it is possible to develop some guidelines as to what types of direct marketing of poultry are allowed.  Of course, as with many other issues, the best advice is to contact officials in your state to learn how they interpret these rules.

A) The 1,000 bird exemption for on-farm processing

The federal exemption from poultry inspection requirements which has the potential to apply to the largest number of direct farm marketers is found in 9 CFR §381.10(c).  It provides:

c) The provisions of the Act and the regulations do not apply to any poultry producer with respect to poultry, of his own raising on his own farm, which he slaughters if:

(1) Such producer slaughters not more than 1,000 poultry during the calendar year for which this exemption is being determined;

(2) Such poultry producer does not engage in buying or selling poultry products other than those produced from poultry raised on his own farm; and

(3) None of such poultry moves in “commerce” (as defined in §381.1).

The restrictions contained in this exemption are clear.  You must raise and process the birds yourself, you are limited to 1,000 a year, you can’t sell them in any other state, and you can’t be involved in marketing any other poultry products.

For states which do not have state programs for meat or poultry inspection, the federal exemption will apply.  However, in those states which do have state poultry inspection programs, the terms of the federal exemption may be modified.  While the exemption can not be expanded, e.g. states can’t make the number 2,000, states can limit the exemption.  Most states have not done so.  However a few states do limit the number of certain types of poultry which are covered, especially for turkeys.  For example, the state programs in both Louisiana and Mississippi restrict this exemption to only 250 turkeys or 1,000 of any other species of poultry.

B) Other exemptions for small enterprises marketing fewer than 20,000 birds

The federal poultry inspection rules include several other exemptions which apply to certain forms of small-scale processing and direct marketing operations, if the number of birds involved is between 1,000 and 20,000.  The exemptions are potentially important for producers who can meet the requirements, however, as noted above, the actual application of these exemptions is uncertain due to confusion over how to interpret the language used.  There are three main categories of exemptions involved, including for:

  • small-scale poultry producers with on-farm processing facilities,
  • small-scale poultry producers whose products are distributed directly to “household consumers, restaurants, hotels, and boardinghouses for use in their own dining rooms, or in preparation of meals for sales direct to consumers”, and
  • a general exemption for small-scale operations, not exempt under any of the other provisions, who process and distribute poultry.

Under all three exemptions certain requirements are the same:

  • the exemption is limited to 20,000 or fewer birds,
  • the poultry must be sound and healthy before slaughtering,
  • the poultry are distributed only within the state in which they are raised, and
  • the poultry are slaughtered and processed using sanitary standards, practices and procedures.

Certain restrictions apply to only some of the exemptions.  For example, producers with on-farm processing facilities or marketing poultry processed for direct sales to the listed consumers, can not be engaged in buying or processing other poultry products.  Birds sold under both of these exemptions must bear the label “Exempted – P.L. 90-482.”

The best interpretation of these exemptions is that poultry producers can decide to construct on-farm processing facilities to slaughter and market up to 20,000 birds, without having to be federally inspected.  However, it is important to remember that the “exemption” in these situations is limited to the inspection of the birds.  The actual facilities used and the practices employed must meet the government standards for sanitation and the birds must be healthy before slaughter.  Some of the confusion concerning the interpretation of these exemptions concerns how they relate to each other.  More confusion arises due to the third exemption, which is a catchall exemption for “the operations and products of small enterprises” not otherwise covered.

Q. Do these exemptions mean I can process up to 20,000 chickens on my farm and market them to buyers such as hotels and restaurants, without having to have the birds federally inspected?
This is a good question because at first reading this appears to be exactly what the exemption in §381.10(a)(6) provides.  However there may be some question whether the state and federal meat inspection officials in your state will interpret it this way.   For example in Iowa, poultry is considered to be a “food” which brings the sale of poultry under the jurisdiction of the Department of Inspection and Appeals.  Under their rules, retail buyers of food for sale to consumers, such as restaurants, grocery stores and hotels, must only buy food from “approved sources.”  The Department’s view is that an on-farm processing facility marketing between 1,000 and 20,000 birds would not be an approved source unless the product was inspected.  This is their interpretation even though the federal and state law would appear to exempt the facility and the food from such a requirement.  If this issue would be litigated a court may decide the exemption applies.  But as long as the state food inspection officials believe such products can not be marketed directly without inspection, the opportunity to develop this market is limited.
Q. Do the exemptions for up to 20,000 birds apply in all states?
Not necessarily.  For those states which have not adopted state meat or poultry inspection programs the federal rules and exemptions will clearly apply.  In those states which do have state programs the rules may be more limited.  One example of a limitation concerning 250 turkeys was discussed above.  At least one state, Kansas, has refused to adopt the full set of federal poultry exemptions.  The Kansas approach was to adopt just one exemption providing for on-farm processing and direct sales of up to 1,000 birds.  For all other poultry processing and marketing a state or federal license and inspection is required.

C) Exemption for custom processing of poultry for the owners

In addition to the “on-farm” exemptions based on the number of birds processed and where they are marketed, there is also a “custom processing” exemption for poultry processing facilities which process birds for delivery to the owners for their own consumption.  This section, like the “custom processing exemption” under state and federal meat inspection laws, can be an important marketing alternative for poultry producers.  The terms of the exemption, [9 CFR §381.10(a)(4)] are:

(4) The custom slaughter by any person of poultry delivered by the owner thereof for such slaughter, and the processing by such slaughterer and transportation in commerce of the poultry products exclusively for use, in the household of such owner, by him and members of his household and his nonpaying guests and employees: Provided, That such custom slaughterer does not engage in the business of buying or selling any poultry products capable of use as human food: And provided further, That in lieu of complying with all the adulteration and misbranding provisions of the Act, such poultry is healthy and is slaughtered and processed under such sanitary standards, practices, and procedures as result in the preparation of poultry products that are sound, clean and fit for human food, and the shipping containers of such poultry products bear the owner’s name and address and the statement “Exempted — P.L. 90-492.”

This is known as the “exempt processing facility provision.”  The effect is that in many states there are poultry processing plants which do not require state or federal inspection of the birds before or after they are processed.  The facilities do have to meet the standards for sanitation and practices, although they must obtain a license from the state, and they are subject to periodic inspection.  These are the equivalent of custom meat lockers which process beef, pork, sheep and goats.  As long as the facilities do not buy or sell poultry products but instead only process birds for their “owners” there is no numerical limitation on how many birds such a facility can process during the year.

Q. Does this exemption mean I can sell live chickens to people and then have them processed at an “exempt” facility?
The importance of the “exempt processing facility” provision concerns how it might provide opportunities for poultry producers to market or pre-sell poultry to their “owners” prior to being processed.  Be aware that the interpretation or application of this provision may vary between states, but some state meat inspection officials suggest this provision is an important way to support direct farm marketing of poultry.  Instead of selling chickens which have been processed on the farm – a task you may not want to undertake and which may be limited to 1,000 chickens even if you do – you can sell the live chickens to the ultimate consumer.  These sales can even happen before you order the chicks you will raise.  As long as you keep records of who is the owner and how many they own, this method of doing business should pass muster.  The method used to price the birds could be a per pound or per bird price, but it should reflect the cost of feeding and managing the birds as well as the risk of death loss.  The only possible dispute could come over the requirement the “owner” deliver the birds for slaughter.  But since many farmers hire other people to actually transport their livestock to slaughter, even to custom lockers, this shouldn’t be a problem for poultry.  One state meat inspection official stated that if the consumer “could raise 30 chickens in his or her backyard what do I care if they pay a farmer to raise the chickens for them?”  His main premise was that if the customers know what they are buying and they make the choices, he doesn’t care.  This approach means the birds are not moving in commerce or appearing in retail or commercial outlets.

Whether the meat inspection officials in your state will take the same interpretation of this provision is uncertain.  The best way to find out is to ask them or ask the operators of an exempt processing facility.  One warning is that if producers take the birds processed in an exempt facility and then get caught marketing them commercially, the operator of the facility may risk losing the exemption if he or she knew the processed birds were being sold.  The experience of most state meat inspection officials is that few have had any complaints about the quality or safety of poultry products marketed directly.  One official reported that in 27 years he had never been involved in a case involving direct poultry sales.  This doesn’t mean state or federal officials are not interested or that they do not have authority to act if a problem should arise.  It just means they probably wouldn’t become involved unless there is a health or safety concern, or unless there are complaints or someone sells poultry in flagrant violation of the act.

One obstacle faced by farmers considering how to proceed with poultry processing is the availability of local processing and the cost of adding their own facilities.

Special Value Claims: Labeling and Promoting Your Meat Product

One of the most important issues for livestock producers interested in the direct farm marketing of meat concerns the federal and state rules for making special claims about product quality or safety. Most claims of this nature relate to the way in which the meat was produced. Examples of such claims include that the meat is natural, free-range, organic, or does not contain antibiotics or growth hormones. The good news for producers interested in making such claims is that in most cases there are procedures, which if followed, will give you the right to make such claims – even for organic meat. The bad news is – to put it in the words of one state meat inspection official – “there is a confusing array of federal rules and positions on these topics.”  This is true because they have built up over time through numerous letters, rulings, memos of understanding, etc. on how to handle these issues.

The following discussion attempts to describe the current legal situation relating to making such special quality claims for meat.  Of course, the best source of information in this and most situations, is to contact the government officials responsible for making the decisions.  State meat inspection officials are listed in the Appendix.

A.  Claims Not Permitted

The first thing to consider is that the USDA has determined that certain product claims concerning meat are not permitted in any case.  These terms include:

  • Chemical Free
  • No Hormones (for pork or poultry)

The fact these terms can not be used directly does not mean that producers can not make similar claims, if the claims are used to describe the process by which the meat was raised rather than the product.

B.  Claims the Meat is “Natural”

One labeling claim many livestock producers are interested in making concerns use of the term “natural” to describe their meat.   The best way to explain how the USDA implements the rules concerning the use of terms like “natural” or making what the agency refers to as “negative” labeling claims such as “no sub-therapeutic antibiotics” is to look at the actual agency policies on these issues. The Food Safety and Inspection Services Food Standards and Labeling Policy Book can be viewed here.

As the policies from the FSIS indicate it is possible to obtain federal approval of labeling to describe meat and poultry products as being “naturally raised.”   You can probably find examples of such products in the grocery story.  For example one Iowa producer has received approval to label his frozen chili product as being “natural”.   The label includes the claims “No Sub-therapeutic Antibiotics, Growth Promoters, or Sulfa Drugs Ever Fed to Glen Freie Hogs!”  Some meat products carry labeling the FSIS has approved which makes similar claims.  For example, the Niman Ranch markets farm raised meats, such as hams raised on farms in Iowa.  Niman Ranch meats are labeled with the following information:

Niman Ranch produces the finest tasting meat in the world by adhering to a strict code of husbandry principles.  Our livestock are humanely treated, fed the purest feeds, never given sub-therapeutic antibiotics, and raised on land that is cared for as a sustainable resource.

For more information about Niman Ranch meats or their marketing program you can contact the web site at <www.nimanranch.com>.

C.  Claims the Poultry or Eggs are “Free Range”

One successful marketing opportunity for poultry products is the demand for “free range” birds and eggs.  The idea behind the term “free range” is that the birds have not been raised in confinement but instead were raised the old fashioned way – outside, scratching in the dirt, and enjoying the fresh air. The term “free range” is being used more often in the market place to describe how poultry or eggs are produced on farms. Consumers like “free range” poultry and eggs for a number of reasons, including a belief the products taste better and are healthier to eat, and because of animal welfare concerns over how other birds are treated. One difficulty which can arise with using the  “free range” label is that for the most part it is not a legally defined term. One person’s idea of free range might be birds raised outside while another’s view might be birds which had the opportunity to be outside, regardless of whether they went outside or not.

The North Carolina Department of Agriculture has adopted rules for marketing shell eggs. [N.C. Admin. Code tit. 2 rule 43H.0101.]   The rules provide this definition:

(8) “Free Range” (or labeling of similar import) means eggs produced from laying chickens that are “cage free” or have access to a suitable outdoors environment.

The rule goes on to provide the following special requirement:

.0107 (c) In addition to all other marketing requirements, eggs labeled and marketed as free range eggs must be identified and otherwise handled to maintain their identity through processing and packaging.  Satisfactory evidence that the eggs are from production locations with cage-free birds or that have reasonable access to an outdoors range must be furnished by any person marketing these eggs to a retailer, institutional consumer or other person and shall be kept on file by both the person selling and the purchasers at their respective places of business for a period of at least 30 days.

Other states may have adopted similar rules as internal standards used by the state meat and poultry or food inspection officials.  The best advice if you are interested in selling poultry or eggs as being “free-range” is to talk with your state officials to see if use of the term is controlled.

Meat Labeling and Consumer Protection

Much of the discussion about marketing meat and poultry focuses on health and safety and for good reason because no one wants to make someone ill from eating an unsafe product.  But there is another issue concerning consumer protection which must be mentioned – truth in labeling and fraud.  Many of the new marketing opportunities developing for meats relate to providing products with special attributes for which consumers are willing to pay more.  These attributes can be that the meat was raised locally, that it was not fed certain things, or that it was treated in a certain way.  Consumers are willing to pay more for these products because they feel the products are more healthy or because they want to help producers who are doing the right thing.  As the previous discussion shows, the rules or guidelines for many of these types of claims are somewhat undefined.  This means that in many cases consumers are trusting the people who produce and market these products to be truthful and honest.  In most situations this trust is justified.  But it is also important to recognize that whenever opportunities exist to receive higher prices there will be an incentive for some people to cheat or to be dishonest.  There have been incidents where the sale of organic food was not certified and there have been examples where meat was not produced in the manner claimed on the label and in the advertisements.

It is important to recognize that even if the rules are uncertain about what can be claimed about a product, a producer or marketer is still under an obligation to be truthful about what is being sold.  This includes not only what is set out on the label but also includes information in advertisements and “point of purchase” brochures used to market a product.  Being dishonest or untruthful in connection with the sale of meat or food products can result in legal liability in two ways.  First, the facts may support a common law action for fraud based on the claim there was an intentional effort to mislead or deceive consumers to obtain money from them.  This type of legal action could be brought by an attorney representing consumers or could be brought by the state attorney general’s office responsible for consumer protection.  Second, legal action could be brought for a criminal prosecution for violating a state or federal law which prohibits the mislabeling of food products.   A federal criminal prosecution of several members of a ranching family for fraudulent marketing of meat, discussed in the box, illustrates the risks involved in mislabeling meats.

Ranchers Convicted of Selling Misbranded Beef, Sentenced to Prison
A court case provides a cautionary tale for anyone thinking about developing a specialty food product for sale to consumers.  The case, U.S. v. Jorgenson, [144 F.3d 550 (8th Cir. 1998)], involved a federal prosecution of several members of a South Dakota ranching family for fraudulent sales of misbranded beef under the Federal Meat Inspection Act.   In the mid 1980’s Gregory Jorgensen had the idea of gathering other South Dakota ranchers to market and sell processed beef from animals raised on their ranches.  The idea evolved into a business run by the Jorgensen family which sold “Dakota Lean” beef.  The meat was marketed as being “heart healthy” and coming from animals raised on their ranch or from animals they bred.    Point of purchase brochures used to market the meat in stores made various claims for the meat, including that the animals were raised on a diet of native prairie grass and not fed growth hormones.

The problems developed in 1989 when demand for “Dakota Lean” meat exceeded the supply the family could provide.  Federal prosecutors showed that rather than limit sales to the meat which could meet the claims being made the defendants arranged to buy trim beef from other packers and then sold it as Dakota Lean even though there was no way to verify the meat came from animals which had been raised in the manner claimed for the meat.  Over one million pounds of outside meat was purchased and marketed in this way.  After federal officials learned of this, the company and three members of the Jorgensen family were prosecuted for the fraudulent sale of misbranded meat in violation of 21 U.S.C. §§610 and 676 of the Federal Meat Inspection Act.

After a federal jury trial they were convicted of these charges and additional charges of mail fraud and wire fraud and were sentenced to prison for up to two years and fined.  Both the government and the defendants appealed the convictions to the 8th Circuit Court of Appeals.  The defendants argued the claims made in the brochures were not material and could not be the basis for a misbranding claim.  In May 1998 the 8th Circuit upheld the convictions and the prison sentences.  It ruled the brochures accompanying the meat were part of the “labeling” for purposes of federal law and the meat was clearly “misbranded.”  The court held the evidence supported the claim the defendants were aware of the plan to mislabel the meat and that they gained additional income by deceiving customers.  If you need any additional reason to be honest in what you say about your products, this case should provide it.

The Sale of Fresh Eggs by Producers

Eggs are another product which can provide unique opportunities for direct farm marketers, in part because many consumers like to buy farm-fresh eggs directly.  Most states have “Egg Laws” which control matters such as the grading and inspection of eggs sold in the state.  Most of these laws include special provisions which authorize the direct sale of eggs by producers to consumers and provide various exemptions.  The exemptions most commonly address either how many hens a person can sell eggs from or the geographic area in which the eggs can be marketed.  Oklahoma’s egg law [2 Oklahoma Stat. Ann. §5-25.1] contains this exemption:

Nothing in this act shall prohibit the sale of eggs produced on the farm and sold direct to the consumer; such eggs shall be produced by hens maintained on the farm from which they are sold.

This exemption limits the sales to those made on the farm where the eggs are produced but does not limit the quantity which can be sold.  The Oklahoma exemption, like those in several states has been the subject of a court case, which upheld the exemption, [see State ex rel. State Bd. of Agriculture of Oklahoma v. Warren, 331 P.2d 405 (1958)].

Some state laws limit the types of direct marketing allowed for eggs.  The South Carolina egg law includes the following exception, [§39-39-170], “(3) persons who sell eggs at a roadside stand near the farm on which the eggs were produced.”  This appears not to apply to people selling eggs at a farmers market or other off-farm site, even if the eggs are sold directly.

Pennsylvania’s egg refrigeration law, [31 P.S. §300.1], sets various standards for marketing and refrigerating eggs.  It includes an exemption for “Certain small egg processors” [see §300.3(f)], defined as:

(1) This section shall not apply to an egg processor who meets all of the following requirements:

(i) maintained at all times during the prior 12-month period a flock of not more than 3,200 laying hens in the aggregate;

(ii) sells or markets eggs predominantly within a 100-mile radius of the facility in which the eggs were produced and processed for sale or distribution;

(iii) sells or markets eggs within five days of the date of lay; and

(iv) stores the eggs prior to sale at a temperature of 60 degrees Fahrenheit or less.

The Pennsylvania law specifically requires that “Small egg processors exempted under this section shall print clearly and conspicuously on each container or consumer receptacle the date of the lay of eggs contained therein.” [see §300.3(f)(3)].  It should be noted that in enforcement actions under the law that the small egg processor exemption “shall be presumed inapplicable in absence of proof to the contrary.”  This means the small producer has the burden to claim and to prove they fit the exemption, which might be difficult because records which show you are below a certain size might be hard to verify.

These various examples of exemptions for the direct marketing of eggs illustrate the difficulty of writing a book on direct farm marketing and being able to answer everyone’s questions.  The laws for many of these foods vary by state and even by locale.  The best advice for producers interested in direct farm marketing of eggs or any product is always to contact the state or federal officials listed in the Appendix and ask about the rules which apply to the processing and marketing of your product.

California Law for Sales of Raw Shell Eggs by Producers at Farmers Markets

As part of the law specifying the food storage and handling standards for the operation of certified farmers markets, California has enacted provisions allowing for the direct sale of raw shell eggs by producers, subject to certain conditions.  The law [California Health and Safety Code, Art. 15 Section 114351] provides:

§114351.  Raw shell eggs; storage and display without refrigeration

Raw shell eggs may be stored and displayed without refrigeration if all of the following conditions are met:

(a) The eggs were produced by poultry owned by the seller and collected on the seller’s property.

(b) The eggs are not placed in direct sunlight during storage or display.

(c) Retail egg containers are prominently labeled “REFRIGERATE AFTER PURCHASE” or the seller posts a conspicuous sign advising consumers that the eggs are to be refrigerated as soon as practical after purchase.

(d) Retail egg containers are conspicuously identified as to the date of the pack.

(e) The eggs have been cleaned and sanitized.

(f) The eggs are not checked, cracked, or broken.

(g) Any eggs that are stored and displayed in temperatures of 90 degrees Fahrenheit or below and that are unsold after four days from the date of pack shall be stored and displayed at an ambient temperature of 7 degrees Celsius (45 degrees Fahrenheit) or below, diverted to pasteurization, or destroyed in a manner approved by the enforcement agency.

(h) Any eggs that are stored and displayed at temperatures above  90 degrees Fahrenheit that are unsold after four days from the date of pack shall be diverted to pasteurization, or destroyed in a manner approved by the enforcement agency.

(i) This section shall become operative on January 1, 1998.

Direct Marketing Unpasteurized Milk from the Farm

The sale of dairy products – such as raw or unpasteurized milk – is a form of direct farm marketing which raises various legal and regulatory questions depending on the state in which you are located.  Many farm families who dairy and some consumers prefer drinking raw milk for various reasons including taste, freshness, and a belief the product has positive health values.  However, the sale of dairy products, and in particular raw or unpasteurized milk, is heavily regulated by state officials.  The sale of unpasteurized milk is the subject of regulation because of concerns over the transmission of diseases.  In some states, such as Iowa, the sale of raw milk – even in small quantities – is strictly prohibited by state regulation and the state officials take a rather rigorous approach on the issue.  In other states, officials have a more permissive attitude toward the sale of raw milk, allowing small-scale personal sales to occur even if not specifically allowed by law.  In some states dairy farmers are allowed to make limited sales of raw milk directly to consumers as long as the sales meet the requirements established by law or regulation.   The requirements usually relate to how the milk is sold, the quantity involved, and compliance with state sanitation requirements for the dairy operation.  The following are some examples of different state laws on the issue of direct on-farm sale of milk products:

Minnesota – Minnesota law [M.S.A. §32.393 “Limitation on sale”] provides that:

No milk, fluid milk products, goat milk, or sheep milk shall be sold, advertised, offered or exposed for sale or held in possession for sale for the purpose of human consumption in fluid form in this state unless the same has been pasteurized and cooled … provided that this section shall not apply to milk, cream, skim milk, no fat milk, or sheep milk occasionally secured or purchased for personal use by any consumer at the place or farm where the milk is produced.

So, the Minnesota law allows on-farm sales of raw milk to consumers for their own personal consumption.  However, the law uses the undefined term “occasionally” to modify “secured or purchased.”  One issue which could arise might be whether the idea of occasionally means you can make regular sales.

Vermont – Vermont law [Vermont Stat. Ann. T.6§2723] provides an exemption to the requirement that anyone who is a “handler” of dairy products needs a license.  The exemption includes the following provision:

(3) A person who produces and sells or offers for sale less than 25 quarts of milk in any one day, but in such case an inspection may be made and reasonable sanitary requirements shall be complied with.”

This provision doesn’t speak directly to the sale of raw milk but instead creates a small producer or small scale exemption from the milk regulations.  It is important to note the provision still requires observing sanitation requirements.

Wisconsin – Wisconsin law [Wis. Stat. Ann. §97.24(2)(b)] provides that only grade A milk or grade A milk products can be sold in the state.  The provision also notes that, “Grade A milk and Grade A milk products shall be effectively pasteurized and shall be produced, processed and distributed in compliance with the standards established by the department under this chapter.”  However, the next subsection (d), provides

(d) This section does not prohibit: …

2. Incidental sales of milk directly to consumers at the dairy farm where the milk is produced.

Some states allow for the local regulation of the sale of milk, which means the ability of producers to sell raw milk may be a local issue.  Connecticut for example allows for the local regulation of the sale of milk.  The law [Conn. Stat. Ann §22-167], provides “No provision of section 22-133 shall affect the authority of any town, city or borough to enact ordinances concerning the sale or distribution, within its limits, of milk which may be detrimental to public health.”

If you are interested in selling raw milk to your customers the best advice is to contact the state and local health inspection officials to see whether or not such sales are allowed and if so under what conditions.  However, if you are currently making such sales and you know that state law doesn’t allow for them then it might not be a good idea to contact the state officials.  In this situation, the best advice is for you to recognize the risks of selling a food product in violation of the law.    An example of a Colorado CSA which sells raw milk under contract to its members is discussed on pages 78 and 79.  While your customers may demand such a product, you should also consider the consequences of what might happen if someone becomes ill from consuming the milk you sold.  While you can do everything in your power to protect the health of your herd and the sanitation of your products, you can not control what your customers might do with the product once it leaves your farm.

 

Chapter ElevenGuide Contents