Mark Anderson, owner of Champoeg Farm in the Willamette Valley of Oregon, easily listed the ways in which his turkey farm business has benefited from a 2014 United States Department of Agriculture (USDA) Value Added Producer Grant (VAPG). The $200,000 award, he said, was seed money to:
- Improve processing of the birds, becoming more efficient and being able to cut up birds. This brings significantly greater profit from each bird beyond whole birds for just the holiday market.
- Increase direct customer marketing capabilities and product presentation.
- Increase sales leading to greater production and better economies of scale.
- Working towards even greater sales by seeking USDA certification.
Just as important are the ways the USDA funding has contributed to economic development in the region when matched and multiplied by Anderson’s farm investments. VAPG recipients are required to match USDA funds dollar for dollar over the project timeframe. The Champoeg project lasts three years and continues until November 2017.
Established in 1856, Champoeg Farm has a long and rich history in the French prairie area. Anderson’s extended family began farming the land more than 150 years ago. He has produced eggs, chicken, duck, pork, beef, lambs, and grain crops over the years. The farm’s niche is pasture-raised proteins. All the animals are raised outdoors on pasture and are moved twice a week, adhering to a rotational model of production. But, he explained, “When we were doing all the species, we were spread too thin. Four years ago we decided to focus on turkeys, and that is working a lot better.” At that point, short-term plans included improvements in processing equipment, seeking USDA certification and finding ways to be more directly responsive to customer choices in order to increase both in size and profitability. Anderson said he hopes someday to be able to get back into the other species.
“Like a lot of people we thought the only way to enter into direct markets was to get involved in Farmers Markets,” he said. That’s one way. Anderson said an earlier VAPG project led the farm into Farmers Markets with egg production. “But the real way to survive is to find a truly specialized market and move beyond what everybody else can do.”
Anderson said Champoeg Farm is one of only two processing plants in the state that can offer cut-up turkey. Turkey breast, which he can sell for more than $5 per pound, is the big in-demand cut from the whole bird. By on-farm butchering, he can pay for a whole bird by selling the breast cut, and he still can process and sell the rest of the bird.
The federal VAPG seed money has enabled purchase and fabrication of specialized equipment and improvements in product packaging and presentation. The increased sales led to increases in production, accompanying increases in feed consumption and other inputs and increases in employment. “All of this has a real effect on the local economy,” Anderson said. Part of the project expenditure is being used to help the turkey processing to become USDA Certified, which requires specific quality standards, record keeping and processes to be met. The certification will allow Champoeg to sell into specialty markets across state lines with benefits being felt locally.
With new automation equipment that will be included in the final phase of the project, the farm can go from handling 200 turkeys a day to 200 in a few hours, enabling it to meet the demand from larger multi-state markets.
It all comes together to create a chain of added value for Champoeg, one they are happy to share with other businesses in the area.
The reality, he said, is that you get the federal grant funds times two pumping into the economy. As an example, Anderson explained, “We’ve developed some amazing packaging,” which has put about $8,000 into the coffers of a local cardboard company. Since the project began, Champoeg increased production-into-stores from 900 birds (holiday, whole) in 2015 to 3,500 (1,000 holiday, whole and 2,500 cut up) in 2016, the first season they offered cut-up product. Those sales supported expanded production. The VAPG program is “hugely positive,” he added. “From a startup perspective, it can make a phenomenal difference in branding, marketing, and even labor costs.”
About USDA VAPG
The USDA has offered VAPG funding periodically since the early 2000s. A new round of funding is anticipated to be announced in 2017. To be considered value added, projects must show how products are differentiated in specific ways from commodity crops. Typically, projects must also show how they may deliver greater returns to producers.
Independent producers, farmer or rancher cooperatives, agriculture producer groups and producer-owned business ventures, including non-profit organizations, may apply. In previous cycles, applicants were required to be producers of the raw commodity who will maintain ownership of that commodity through the process of creating a value added product. Grants have been available for planning projects (such as marketing and business plans and feasibility studies) and working capital projects (which might include wages or packaging supplies). (http://www.rd.usda.gov/)