Cutting out the middleman

Tennessee cattleman builds an on-farm beef processing center to capitalize on local demand for his high-quality product.

By

Gene Johnston

Published on June 24, 2022

What beef producer hasn't dreamed of cutting out the middleman and selling high quality steaks and ground beef directly to consumers?

Andrew Donnell (pictured right) not only dreamed it he took the ultimate step last year and built an on-farm butchering and processing center. Now, there's no one between him and his customers - no feedlot, no packer, not even a local locker plant.

"We've always bred our cattle for high carcass quality," says the 7th generation cattleman, who raises purebred Angus on Donnell Century Farm near Jackson, Tennessee. "We sold bulls and heifers based on their high quality, so it makes sense that our beef is better than store meat. That's the point we're trying to capitalize on."

READ MORE: Producers boost profits and avoid meatpackers with integrated livestock processing

Donnell's journey to owning his own processing facility actually started several years ago, when he began selling some of his beef directly to consumers at farmers markets and restaurants that wanted a local source of high quality beef. "They could sell one of our hamburgers for $10 or more, so we knew that we had a product with high perceived value," he says.

Back then, Donnell was having his finished cattle butchered and processed at a local locker plant. "I was never really happy with the way they cut our beef," he says. "I didn't have control over it. For years, I thought about doing our own butchering so we could have full control."

The tipping point to actually building the on-farm plant came in the form of an unlikely event: The Covid pandemic.

"All of a sudden, we couldn't get our cattle into the local processor," Donnell says. "They had a two year waiting list to butcher animals. We had the animals and customers, but no place to get them processed.

"That's when it really hit me: We should build our own processing facility."

Persistence Pays

When Donnell sets his mind on something, he does his homework, follows a logical path, and doesn't give up. He searched out beef producers on social media who had already been down this road. Some of them, even as far away as Canada, became his mentors.

Then he made some calls and found someone who could build a butchering facility. This was in 2020, and the pandemic actually helped again: Contractors and cement workers were looking for work.

"My building contractor had two jobs fall through right about the time I called him. Our construction job went to the front of the line."

The last step to fall into place was when Donnell found out he could qualify for Tennessee CARES (Coronavirus Aid, Relief, and Economic Security) funding. That's federal money for businesses hurt by Covid shutdowns. Donnell's farm also operates an agritourism business, Donnell Century Farm Adventure, that was completely shut down in the pandemic and helped him qualify for CARES.

The actual cost for building his beef processing plant was over $100,000, and the CARES grant cushioned that by paying for the refrigeration unit in the new butchering facility.

That's a key point to consider if you dream of your own on-farm beef processing center, says Donnell. "Here in Tennessee our two big industries are tourism and agriculture. There's lots of government help for those two industries. Make sure you check out all the help that may be available in your state."

Besides the CARES funding, the Tennessee Department of Agriculture supported Donnell and arranged for him to tour farms in other states to see how they were building markets for local beef and other products. "We learned so much on those tours," he says.

Donnell's processing facility is small. His cow herd is about 100 cows, so at most he's only butchering a few head a week. Donnell found a neighbor who has butchering experience to help part time in the processing center.

Another neighbor has pigs, and Donnell partnered with him to also butcher pigs as needed and add pork to the farm store.

Donnell doesn't custom butcher for anyone else. "That's not a business we want to be in. We want to butcher and sell our own meat right here on the farm."

Some people may think you have to be near a big population center to make something like this work, but Donnell would argue with that view.

"We've found most of our customers are our neighbors and people from our local communities who want to support local farmers. We encourage them to try just a package or two of our meat and see if they like it. A lot of them come back later and move up to buying a quarter or a half. That part of our business is growing the fastest now.

"My advice is to look to your local community for customers. Serve them with a quality product, and they'll take care of you."

If I Was Starting Over . . .

Donnell is quick to admit he made mistakes in journey to building his beef processing facility. The mistakes have tended to be small, and not the kind that would torpedo a business. Still, he offers this for your consideration if you're thinking of adding an on-farm beef processing facility.

1. "I should have put in three-phase electrical power." Donnell put in single-phase because he thought that was all he'd need, and it saved some money. "I should have spent the extra money up front," he says.

2. "I should have bought a meat-stuffing machine." They do it by hand and it is very time-consuming. "Some of our equipment is just too small and we're not as efficient as I would like," Donnell says.

3. "I need a bigger freezer." Donnell thought they would sell most of their meat fresh (unfrozen) and not need a big freezer, but now he knows different. "In general I probably should have gone bigger with the whole plant. But, I did leave the possibility of knocking out a wall and expanding later."

4. "Scheduling beef production can be a problem." He needs to have finished animals available to butcher year-around, and most cattle farms don't work that way. "We've only been processing a little over a year now, so we're still learning how to accomplish this," he says.

5. "Don't sweat the inspectors." Donnell has state inspectors on the premises often, but he's tried to welcome them and use their expertise. "Rather than complain about them, I've told them that I'm new to this, and I need them to help me get it right," he says. "They know the rules better than I do, so I treat them like they are in charge. And they are."