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Delaware County Meats Goes Retail

The rock bottom hog prices of late 1998 motivated the 12 producers in Delaware County, IA, to find a new way to market pork.Beginning in February 1999, the group formed an limited-liability company, signed an agreement with a local meat locker for processing, developed their own brand and persuaded a regional food distributor to sell their meat in area supermarkets.In less than six months, the group

The rock bottom hog prices of late 1998 motivated the 12 producers in Delaware County, IA, to find a new way to market pork.

Beginning in February 1999, the group formed an limited-liability company, signed an agreement with a local meat locker for processing, developed their own brand and persuaded a regional food distributor to sell their meat in area supermarkets.

In less than six months, the group went from brainstorming at meetings to selling pork in stores. The big break came when a store manager got the retailer's attention, according to Todd Boss, a producer-member from Manchester, IA. Boss runs a 150-sow, farrow-to-finish operation, produces seedstock animals and sells semen from a 20-boar stud.

"Our presentation to (retailer) Nash Finch was a key. That was probably the biggest stumbling block - how to get your foot in the door," he says. "Once we got into one supermarket, it started snowballing."

Now, the group sells pork in 11 eastern Iowa supermarkets. Their line of fully cooked products includes chops, loins, bratwurst, pork roast with gravy, barbecued pork, hams, snack sticks, ring bologna and smoked link sausage. The group also offers an uncooked seasoned bratwurst and several types of bacon.

For consistency of product, only one producer is currently providing the hogs processed into Delaware County Meats. Mark Klaren, Worthington, IA, 235-sow producer, hauls up to 35 head a week to Edgewood. That's an increase from 10 hogs processed each week last summer.

As more hogs are needed, the group will move to common genetics. They are seeking research grant money to find which genetics they need for a high meat-quality animal.

Terry Kerns and his family own the Edgewood Locker in nearby Edgewood, IA, where the meat is processed. Kerns first connected with the Delaware County Meats group at a pork crisis meeting in February 1999. He knew the group could provide hogs and the locker could process the meat. The big, remaining question was finding a market.

"The biggest break for Delaware County Meats was getting hooked up with Nash Finch. Getting that shelf space in those large stores was key," he says. The group first intended to use a door-to-door truck sales method.

Kerns gets one telephone call a week from farmer groups interested in developing pork processing and direct marketing programs. He knows the projects are not likely to succeed. He thought the same about Delaware County Meats.

"At the inception, I didn't think they would succeed," he says. "Now, it's one of the most successful projects in the state. They are an amazing group. No one else has gotten this far."

Donna Boss, the value-added agriculture coordinator for Delaware County and Todd's wife, estimates that each member of the group has logged 2,000 hours of volunteer and meeting time.

Since August, the group has installed a large walk-in cooler at the locker plant, hired one of their members to manage the company, bought a delivery truck and hired another member to drive and make deliveries. They spend Saturday mornings demonstrating the products in stores.

Keys To Success The producers point to several keys to their success. They needed $15 hogs to get motivated, Klaren says. They needed Kerns to show interest in processing their meat. They needed to catch the interest of the grocery store management. They needed a local artist to design their logo.

Each "need" dropped into place, along with $36,000 in Iowa Department of Economic Development grant money. Nutritional analysis and labeling was recently funded and completed by an Iowa State University grant.

The new governor, Tom Vilsack, commonly uses Delaware County Meats as an example of value-added success. That added media attention for the group. County economic development officials had recently established the value-added ag coordinator job. That meant Donna Boss made phone calls and did paperwork to organize the group while the rest of the producers raised hogs.

"The reality of it is, I'm not sure our group would have ever moved forward if it wasn't for the position of value-added ag coordinator," Klaren says. "We all knew we wanted to do something, but we needed that catalyst to bring us together."

The Future The group is working with Iowa Rep. Jim Nussle on legislation that would allow state-inspected meat to cross state lines. The bill is waiting for hearings in the U.S. House of Representatives. If the federal law changes, the group will prepare its Internet site to sell meat. They will also set their sights on the Chicago area as a new market.

The producers do not expect to re-open membership until they have half of the group's hogs processed into Delaware County Meats. The group has a total of 1,500 sows.

Todd Boss stresses that they want to maintain family farm operations.

"We want to add enough value to each member's farming operation to stay competitive in the hog business," he says. "The reality is that it will be several years before we take cash out. Hopefully, the next time that hog cycle drops, we can take some profits out for family living expenses."

The producers are Pork Quality Assurance Level III-certified and all of the hogs have to be bred and born in Iowa.

Returns On Investment Each of the 12 producers owns the same amount of stock in the company. The group will not disclose the amount of the initial investment or the profits from each pig processed. They estimate the retail value of each hog at $350, but note that they have to pay for processing, packaging, start-up costs, lawyer fees, trademark registration and other costs.

Delaware County Meats showed a profit in 1999, and all profits were re-invested in the company. The producers see the capital required as another venture in farming.

"It's like starting farming all over again," Klaren says. "This is not as easy as it looks. Or, I guess somebody would have done it a long time ago."

Positive Consumer Response Ron Weaver, meat manager at the Econofoods of Manchester, IA, says the addition of products like Delaware County Meats follows a company policy to support local business.

"We are in a farm community; the pork crisis was bad for the whole community," he says. "The consumers like to see the Delaware County meat. They like to support the locals."

The stores that feature Delaware County Meats include the Econofoods stores in Manchester, Dubuque, Cedar Rapids, Waterloo, Marion and Cedar Falls; Gary's Foods, Mount Vernon; Food Pride, Solon; Family Foods, Anamosa; Fareway Foods, Manchester; and the Payless Foods, Dyersville.

Pat Helmrichs, a Manchester pork producer and president of the group's board, notes that the group is well ahead of their business plan. "In our business plan we anticipated 11 stores by the end of three years," says Helmrichs.

For more information on Delaware County Meats, call (877) 875-6388.