In Minnesota, a growing interest in reviving the local butcher shop

A man in an apron stands in front of a meat case.
Brian Schatz stands inside Schmidt's Meat Market in Nicollet, Minn. Temporary food supply disruptions prompted by the pandemic have led more consumers to look for direct connections with farmers. It’s put a spotlight on a problem that's been developing for years: a shortage the of small meat processing operations that are a key link between farmers and consumers. There’s growing interest in reviving the local butcher shop.
Courtesy of Brian Schatz

Last spring, COVID-19 outbreaks tied to major meat processing plants in the state temporarily disrupted the supply chain for pork and other meat products. So consumers turned quickly to local suppliers for the food they were having trouble finding on supermarket shelves.

That interest in local food stretched the capacity of small meat processing operations that were busy even before the pandemic.

Months later, what was at first a quick pivot to local sourcing has held fast.

"We're hearing from processors that are fully booked up for 2021 already, and well booked into 2022, and even further,” said Nicole Neeser, who leads the Minnesota Department of Agriculture’s dairy and meat inspection program. “And so we're really seeing that demand be sustained.”

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That demand has put a spotlight on a problem that's been developing for years in Minnesota: a shortage of the small meat processing operations that provide a key link between farmers and consumers.

Now, there’s growing interest in reviving the local butcher shop — but years of scaling back have left the industry in Minnesota at a moment of rebuilding.

Connecting producers and consumers

Three primary types of facilities make up Minnesota’s meat processing landscape.

One group of plants is inspected by the U.S. Department of Agriculture and can sell products across the country. The meat they produce generally makes it to grocery shelves or wholesale distribution.

The state of Minnesota, in turn, regulates two classes of meat processing facilities: “Equal to” and “custom exempt” operations.

“Equal to” facilities adhere to the same regulations as their federally inspected counterparts, and focus on wholesale distribution of the meat they produce. They’re inspected continuously and can sell meat anywhere in Minnesota, though they tend to focus on wholesale. There are currently 53 of those operations in the state.

“Custom exempt” facilities are not as tightly regulated, don’t have an inspector on duty every day and can’t sell meat — they can only process meat for an animal’s owner. There are 241 such facilities in Minnesota.

It’s the latter operation — the “custom exempt” facilities — that often provide the link between farmers and the consumers who buy an animal, or a portion of an animal, from the farmer. They’re smaller, less expensive to establish or grow — and also where where the industry is seeing the greatest interest in expansion.

“Primarily, what we're seeing is just real small plants, maybe two or three employees, maybe just a family-run business in which makes it a little easier, because they don't have to depend too much on hired work,” said Neeser. “But we need a few of those real small businesses to move to a little bit bigger scale so that they can service more of those livestock producers.”

Congress created a grant program late last year to help small meat processors expand or start new operations. The state also has grant programs to help offset the expense of equipment.

But while the cost of expanding or starting a facility can be a barrier to the industry’s growth in Minnesota, a bigger issue is the lack of trained workers to staff the operations.

"Just throwing money at a facility or a business to build a bigger facility doesn't put more workers into those facilities,” said Neeser. “So we definitely need to think about how we can help create a more stable workforce, create jobs that are jobs that folks want, and provide training for those folks."

A shrinking workforce, beginning to grow

A 2014 study found that about two-thirds of existing small butcher shop owners in Minnesota would retire within 10 years.

The last Minnesota training program for the industry closed more than a decade ago, because of a lack of interest among students. Since then, workers have primarily learned the trade informally, through on-the-job training and mentorships. Now, at least one Minnesota technical college is in preliminary discussions around starting a new training program.

"It's hard work. You're going to put a lot hours in to begin with, but it's a profitable job if it's something that younger people are interested in," said Brian Schatz, president of the Minnesota Association of Meat Processors, who works at Schmidt’s Meat Market in Nicollet, Minn.

He's been getting more calls in recent months from people interested in getting into the business.

"There's been a couple of young young guys and gals that have shown interest in wanting to do this, and there's one that I know is going to be opening up a plant hopefully this next year,” Schatz said. “So there is some interest, which is good to see, but for the small processors to continue to be a part of this industry, there's got to be more interest in this field."

Carla Mertz is very interested — and is now in the process of starting a new meat processing operation in Princeton, just north of the Twin Cities. She owns Iron Shoe farm, a small operation that raises chickens, beef and hogs.

The slaughter and processing plant she's used for seven years is now booked into 2022.

"It kind of puts you in a pinch,” she said. “You can't expand your business. You've got the customer base, and we get people reaching out to us all the time. The last thing I want to do is turn them away.”

Mertz is trying to raise funds to build a small slaughter and processing operation. A building and equipment will cost more than $2 million. It’s a challenging project that’s already consumed three years of research and planning, but she’s convinced it will pay off in the long run, given all the interest in locally sourced food.

A survey conducted by several Minnesota agriculture organizations recently found that two-thirds of farmers who run small to medium-sized livestock operations reported increased consumer demand. More than half said they would raise more livestock, if local processing capacity were increased.

Slowly, the industry is beginning to grow. Neeser expects a half-dozen small meat processing facilities to open or expand over the next few months in Minnesota, joining the slow upward trend over the past couple of years. “We expect to see some significant growth in plant numbers and the number of plants that we oversee in the next couple of years,” she said.

Minnesota Farmers Union lobbyist Stu Lourey said the pandemic has created a moment the local food movement needs to seize.

"I think that the fear is that we missed some of that opportunity, but I think we need to capitalize on this opportunity, on folks’ renewed interest in local, and help producers meet that demand," he said. The issue is among the top priorities of his organization’s membership.

Meat processing capacity in Minnesota isn't likely to expand quickly enough for many farmers, but Neeser is confident it will catch up with demand.

"What I see right now is real good reason for optimism,” she said. ”Growth definitely looks like it will be sustainable."