Jake Feddes, owner of Montana-based Feddes Family Meats, gets 10-15 messages a week asking for his state-inspected small meat processing facility to ship across state lines. Although all of his facility’s standards meet or are greater than USDA standards, he has to turn down the consumers’ request because the Federal Meat Inspection Act currently prohibits smaller processors like himself and others from tapping into out-of-state consumers.
That could change under the Direct Interstate Retail Exemption for Certain Transactions Act of 2021 that would allow retail quantities of meat processed under state-inspection to be sold across state lines through e-commerce, providing beef producers and local processors alike with more options to market direct-to-consumers.
Feddes says his Website analytics show he has more out-of-state visitors than in-state for his Montana products. “There is a big demand out there,” he says.
Introduced by U.S. Reps. Dusty Johnson, R - S.D., and Henry Cuellar, D - Texas, the bill is one of many introduced first in 2020 to expand opportunities for small and very small meat processors who proved essential as larger facilities closed due to COVID-19.
Johnson, who also introduced the DIRECT Act in the last Congress, says the bill has the potential to unlock a lot of entrepreneurship at the small processor level for those who don’t want to jump through the extra hoops required under federal inspection, but have been subjected to state inspections which are often as rigorous and meet the same standards as federal.
He gave the example that the South Dakota State University Meat Lab could develop a jackrabbit jerky and market it to alumni. “Americans love meat as much as they love beer,” says Johnson. This could open up a new suite of products that could be available online if it was open to state-inspected meat facilities.
Currently, many states such as South Dakota and Texas have State Meat and Poultry Inspection programs approved by USDA’s Food Safety and Inspection Service as “at least equal to” standards set under the Federal Meat Inspection Act and Poultry Products Inspection Act. Under the existing framework however, state-inspected products can only be sold interstate if approved to do so under the Cooperative Interstate Shipping Program.
The DIRECT Act would amend the retail exemption under the FMIA and PPIA to allow processors, butchers, or other retailers to sell normal retail quantities (300 lbs. of beef, 100 lbs. of pork, 27.5 lbs. of lamb) of MPI State Inspected Meat online to consumers across state lines.
The proposal also includes clear prohibitions on export, keeping equivalency agreements with trading partners intact. The DIRECT Act will allow states operating under the CIS system to ship and label as they are currently.
Tanner Beymer, director of government affairs & market regulatory policy at the National Cattlemen's Beef Association, says with discussions from state agriculture directors and commissioners of agriculture the CIS doesn’t meet the needs of a lot of states.
Food safety precautions
Beymer explains that this bill is better than many of the alternatives out there because of the direct-to-consumer link. If an adulterated product came from Montana, and was inspected by a Montana state official, once it goes across state lines, Montana no longer has any recall authority. Because transactions authorized under the DIRECT Act sales are direct to consumer via e-commerce, sales are traceable and can easily be recalled.
By collecting the phone number and address, it allows companies the ability to do a recall if it was necessary, which Feddes says increases credibility. Feddes says this inclusion in the legislation allows smaller processors to maintain food safety standards and high consumer confidence.
Chandler Keys, Keys Group, a Washington-based lobbying firm supporting the meat industry, spoke recently to the International Livestock Forum sponsored by Colorado State University and the National Western Stock Show. During his comments the concept of allowing state-inspected meat to be sold across state lines came up:
“We worked with Collin Peterson on a grant program for small packers to help them learn what they have to do to become federally inspected.”
“Letting state inspected meat to cross into commerce, or international commerce, would be playing Russian Roulette. If you had an e. coli outbreak, that program of state-inspected meat sales across state lines would evaporate in a moment. Why go down that road?”
He adds that in the past few years several federally inspected pork plants have been built and a new beef plant is going up in Idaho. “The water’s fine, people are still getting into the business and they see an opening or opportunity [in the industry].”
More bills coming
Beymer says the DIRECT Act is not intended to be a silver bullet, but rather one piece of legislation of a series of anticipated legislative efforts to expand opportunities for small and very small beef processors with the end goal of increasing beef processing capacity. Last year many proposals were lumped together in the PRICE Act – or the Price Reform in Cattle Economics Act – also introduced by Johnson.
The coronavirus relief bill signed before the New Year provided resources for state-inspected meat processors through inclusion of the Requiring Assistance to Meat Processors for Upgrading Plants Act. The bill offers federal dollars to smaller processors to offset the costs of transitioning to become a fully federally-inspected facility.
“We are working diligently with USDA to get that program teed up and get it out on the ground,” Beymer adds.
That bill also provided a commissioned study to look at the Cooperative Interstate Shipment program and finds ways for improvement.
Beymer says NCBA is anticipating additional re-introduction over the next few months and possibly in an omnibus package that resembles what happened in the PRICE Act. “Stay tuned. This is the first domino that’s going to set off the chain reaction. And we’re really exciting about what opportunities lie ahead of us.”
Willie Vogt contributed to this report.