Animal shares, independent processor assistance proposed

Nebraska farmers and ranchers could offer livestock ownership shares to customers under a bill heard Feb. 2 by the Agriculture Committee.

LB324, introduced by Sen. Tom Brandt of Plymouth, would provide for an animal share, or an ownership interest in an animal or herd of animals created by a written contract between a consumer and a farmer or rancher.

Animal share contracts would include a bill of sale to the consumer for an ownership interest in the animal or herd and a boarding provision under which the consumer boards the animal or herd with the farmer or rancher for care and processing and the consumer is entitled to receive a share of meat from the animal or herd.

The bill also would create an independent processor assistance program administered by the state Department of Agriculture.

Brandt said the bill is intended to increase Nebraka’s meat processing capacity and expand market access for small and midsize beef and pork producers. He said coronavirus outbreaks at Nebraska meat processing plants have forced those producers to turn to local processors.

“This has created a bottleneck at every local meat locker in the state,” Brandt said. “They simply do not have the capacity or equipment to keep up with demand.”

He said the assistance program would create a framework under which any federal coronavirus aid directed to Nebraska in the future could be used to provide grants to local processors to construct new buildings and upgrade equipment.

John Hladik of the Center for Rural Affairs testified in support of LB324. He said the bill, which is based on similar legislation implemented in Wyoming last year, would allow small producers to make animal shares available to consumers under a custom exemption in the Federal Meat Inspection Act.

Under the exemption, state and federal inspection of meat is not required if the animal is processed exclusively for consumption by its owner and his or her household, employees or guests.

Bill Rhea, president of the Nebraska Cattlemen, also testified in support, saying the assistance program could ease pandemic-related supply chain disruptions that have created what he called an exponential increase in demand for small processors.

Many cattle producers have made direct-to-consumer marketing a bigger part of their business in the wake of those disruptions, he said, and the proposed animal shares would give them more flexibility in selling their livestock to consumers.

Brian Kurth, general manager of McClean Beef, also testified in support. He said the bill could help the company expand production capacity at a processing facility it is renovating in York.

“I see firsthand the need for additional small local processing facilities when our phone is ringing every day with processing requests coming from small producers,” Kurth said.

Steve Wellman, director of the state Department of Agriculture, testified in opposition to LB324. He said the department has no authority to implement the animal share provision because custom exempt slaughter and processing facilities are regulated under federal law.

Additionally, he said, the animal share program would create more paperwork for processors even if they do not process livestock under animal share contracts.

The committee took no immediate action on the bill.