Fabulous Food Plants: Cooperative efforts
Livestock producers who aren't captive suppliers to major processors are locked into market price selling that alternates between feast and famine, and famine was forcing many producers in Illinois and surrounding states to find another line of work. When the price paid by packinghouses bottomed out at eight cents a pound in 1998, two cooperatives in the Land of Lincoln began exploring their vertical-integration options. Happenstance brought them in touch with a St. Louis-area agribusiness management firm. The three groups ultimately merged to form Meadowbrook Farms, an organization with a more corporate approach than is typically found in the co-op arena. To sidestep the 90 percent failure rate that plagues co-ops, management maintains a professional distance from members, limiting contact points and avoiding the member/owner dynamic that dooms many co-ops. More significantly, producers are paid on the basis of the retail value of their pork, not the going price for bellies. Members are encouraged to breed hogs for overlooked specialty segments that are underserved by major pork processors.
Bolstered by $13 million from 200 member farms, Meadowbrook Farms invested $33 million in 2003 to build a greenfield plant in Rantoul, a central Illinois community with surplus industrial infrastructure from its days as host to a shuttered air force base. The plant came on line in January 2004 and moved into the black in the third quarter. This year, the facility will process more than 150 million pounds of pork, according to Vice President Jim Altemus. Daily production is flirting with 3,400 head a day, 20 percent above the rated capacity when the 120,000 sq.-ft.-facility opened.
"If any cut [entering the fabrication room] is out of sequence, the whole line shuts down until we identify and correct the problem," says Altemus. Because of validation safeguards, "I can introduce you to the farmer who actually produced the hog for a given cut of meat," he boasts.
The information technology that drives Meadowbrook's plant is from CSB International. Melvin Weck, Meadowbrook's executive vice president and director of IT, discovered CSB while walking the aisles at the 2001 Worldwide Food Expo in Chicago. CSB was founded by a butcher-turned-computer-geek, a pedigree that distinguishes CSB from industrial programs "jerry-rigged for the meat industry," explains Weck. Integration of the outputs from scales and other quality-data devices to the system was done in-house.
The information system's European pedigree complements much of the facility's equipment. Hygiene and ergonomics were key design criteria, along with robotics and other labor-saving automation, according to Ed Wright, senior process planner with The Facility Group. Wright specified the plant's equipment. The Facility Group's involvement began with site selection.
Besides pushing the technology envelope, Meadowbrook's biggest contributions to the pork business are the changes in the producer-processor dynamic and the encouragement of niche marketing that can lift producers out of commodity selling and into more profitable specialty products. The supplier mix guarantees diversity-Amish farmers with 25 hogs in a gooseneck trailer unload next to semi-trailers with 200 head. Meadowbrook management also encourages producers to exploit markets commanding premium retail prices, such as organic and antibiotic-free. And if they raise desirable but slow-growing stock such as Berkshire hogs, they can expect a premium price.
"In a normal operation, the economics to supply a special cut for a customer would not pay," Altemus points out. At Meadowbrook, it can and does, and the plant's ability to process specialty items and meet tight order specifications were fundamental engineering considerations. Assuming Meadowbrook's sales division connects with enough premium and specialty buyers, Rantoul will be the linchpin between those buyers and fairly compensated producers.
For more information:
Tony Pitrone, The Facility Group,
Yvon Dufour, GE Leblanc Inc.,
Jeb Supple, SFK Technology Inc.,
Jan Bos, Stork MPS,