Guidelines for Livestock Producers Direct Marketing to Consumers

direct marketing to consumers

Key Terms:

Federal meat inspection – Inspection of meat processing in the United States is under the direction of USDA Food Safety Inspection Service. This industry was put under federal oversight by President Teddy Roosevelt. All parties must follow the Code of Federal Regulations (CFR) when it comes to processing and inspecting meat products.

State meat inspection – States can supplement meat inspection within their states on a cost share basis with the federal government. Entities inspected by state inspectors may not sell their product across state boundaries. State programs must meet or exceed the federal regulatory standards.

Federal Inspected Slaughter Facility -This is a plant that can sell product into retail commerce and is inspected by an USDA employed inspector. Their product can cross state lines or be exported internationally. In these facilities, the slaughter of each animal must be inspected by the USDA inspector in addition to sanitation and facility requirements.

State Inspected Slaughter Facility – This is a plant that can sell product into retail commerce and is inspected by a Montana Department of Livestock (MDOL) employed inspector. Their product cannot be sold across state lines. In these facilities, the state inspector must inspect the slaughter of each individual animal in addition to sanitation and facility requirements in a manner that meets or exceeds federal guidelines.

Custom-Exempt Facility – This is a plant that is exempt from some aspects federal inspection regulations but must follow sanitary procedures and record keeping requirements. They require inspection only twice a year as opposed to daily inspection when they slaughter and process. They can only custom process for the owner of the animals and return the product to the owner marked “Not for Sale.” There is no prohibition on these facilities from doing custom-slaughter for out-of-state customers.

Meat Depot – These are facilities that are receiving retail inspected, packaged product for resale. These licenses are intended for people who are wholesaling to food stores, restaurants, etc. and are not engaged in further processing of the product.

Using Custom-Exempt Facilities

Important to remember that to use this method you are selling consumers a live animal and not meat. It is advised to sale the animal in easy to document shares if not selling the whole animal to one buyer. (ex. quarters, halves, etc.)

This method allows the animal to be sold to the customer and then it is slaughtered and processed for them, delivered to them, and marked “Not for Sale.”

State or Federally inspected slaughter establishments can process uninspected products under the custom exemption only if they also have a custom exempt license and return those uninspected products to the owner of the source materials.

How to properly document the sale of the animal, and not meat

Legal owner signs bill of sale designating additional owners on a live animal

  • Regardless of species, you will want a clear trail of documentation indicating the sale of a live animal, not meat products.
  • Ideally, when required, cattle should be brand inspected prior to traveling to the slaughter facility.  

Remember that percentages of ownership are not monitored by MDOL 

  • Paperwork should be reviewed by the Custom-Exempt owner to determine who can receive the slaughtered product. Within the bill of sale or instructions, the portion of ownership by individual should be clear.

Gain Brand Inspection prior to slaughter for cattle

  • Cattle traveling to a slaughter facility must have proof of ownership in the form of a brand inspection prior to arrival at the facility, except:
    • Cattle may travel from within Montana to a Federally inspected slaughter facility on a permit if they are being used as the Custom-Exempt processor; brand inspection is then done on arrival.
    • Cattle may travel from an adjacent county to a state inspected slaughter facility that has also been designated as an authorized shipping point if they are being used as the Custom-Exempt processor; brand inspection is done on arrival.

Out of state recipients possible if animal is sold alive to out-of-state owner. 

  • Custom-Exempt product may move across state lines.

9 CFR 303.1(b)(3) and 9 CFR 320 cover the records that Custom-Exempt operators are required to keep.

How to handle transactions if you are both the ranch and the custom exempt processor

Need to document the sale of a live animal to customer *prior* to slaughter. 

Documentation advised depends on species.

Make sure to keep records to clearly itemize two separate transactions;

  1. One regarding the sale of the animal, and
  2. The second for the cost of processing.

How to advertise locally-sourced products direct via Custom-Exempt Processing

  • Make it clear you are selling the entirety or part (share) of a *live animal.*
  • Sell prior to slaughter.
  • Describe where animal is being processed and who will be responsible for paying the processing fees.
  • Do not use language that might refer to specific cuts of meat; always be careful to correct customers about what you are offering, especially on social media or the internet.

Using Federal or State Inspected Slaughter Facilities

If you wish to sell or product retail or wholesale, you can work with a federal or state inspected slaughter facility to process your product under slaughter inspection. If it is processed in a federal facility, it can be sold across state lines. If it is processed in a state facility, it can only be sold within the state.

The animals can move live to these facilities on a market permit and be brand inspected upon arrival.

The product will receive a meat inspection stamp with the regulated establishments number on it, but they may be willing to work with you to do your own private label on the product, so it indicates it came from your ranch.

There are extensive labeling requirements for retail meat products when it comes to ingredients such as seasonings or known allergens the product may include or have been exposed to in the process. If you are working with a federal facility, USDA will have to approve your labels. If you are working with a state facility, our label specialist in Helena can work with you and the processor. This can be a lengthy and tedious process.

USDA or MDOL have oversight over the processing and labeling but once you get the product back there are a few different factors to consider when you sell the product to the customer:

  • If you are selling to individual consumers only through your own storefront, then it’s considered a retail store, and these are typically not licensed by MDOL.  These “stores” are typically inspected by local public health county sanitarians. If this is your intent, make sure you have contacted county authorities.
  • Depending on the type of retail activity, there may also be state or federal requirements (for example, if grinding beef, the retail operation must keep certain records on source materials).
  • If you are intending to get back packaged product to sale wholesale, then you will need a meat depot license from MDOL. There are ranchers that have established a meat depot to be able to wholesale their own product once it has been properly processed.
    • Future intent of MDOL is to change the sanitary requirements for Meat Depots from prescriptive requirements (infrastructure – lighting, plumbing…) to more general conditions such as “the responsibility to store meat under sanitary conditions and protect product from adulteration.”
    • Record keeping requirements for Meat Depots:
      • Where wholesale product went (for recall traceback)
      • Requirements are found in 9 CFR Part 320

Key MDOL Contacts for producers wishing to direct market to local consumers:

  • Mike Honeycutt, Executive Officer MDOL
  • Dr. Marty Zaluski, Animal Health and Food Safety Administrator
  • Gary Hamel, Meat and Poultry Inspection Chief
  • Dr. Emily Kaleczyc, MPI Food Safety Officer
  • Your Local MPI District Meat Inspector
  • Your Local Brands Division District Livestock Investigator
  • Your Local Brand Inspector

Learn more on the Montana Department of Livestock website.