Missouri Hog Farmers Patch Together a Solution
Three hog farmers from northern Missouri embarked on a mission in 1992 to increase their incomes. What they did resulted in an unusual enterprise that has endured for 10 years and has affected other Missouri farmers, as well as consumers.
"It was a strong group of farmers," says Lindsay Howerton of the nonprofit Missouri Rural Crisis Center (MRCC). "Changes in the livestock industry made them realize they needed help."
The most devastating change was the growth of corporate hog farms, which were putting small hog operations out of business at a fast pace. MRCC had been formed in 1985 to address a tripling rate of farm bankruptcies in the state. The farmers were members of the organization and turned to it for assistance. Together, they launched Patchwork Family Farms, an economic development project designed to eliminate middlemen, give hog farmers a guaranteed price that exceeds the market price and provide high-quality pork to consumers.
"We've had to build a name for ourselves through quality and service," Howerton says. "We're in a tough marketplace. It takes a lot of people and volunteer hours and sweat equity to make this work."
The process starts with Patchwork farmers promising to raise hogs in a healthy environment. The hogs are allowed outside in the fresh air and sunshine. Growth hormones and antibiotics in feed are prohibited.
Once the hogs are ready for market, Patchwork steps in and buys them up-front so that profit flows smoothly to the farmers. Patchwork pays 43 cents per pound or, if the market price is higher, 15 percent above the market price. Hogs were selling for 30 to 35 cents per pound on the market earlier this spring. In 1998, the guaranteed price played a critical role for Patchwork members when the market price sank to 7.5 cents per pound.
The next step is to send the hogs for processing to one of three federally inspected, family-owned plants that Patchwork uses in Missouri.
Although the farmers are paid before the meat is sold, their work goes beyond raising hogs. Along with staff from Patchwork, the farmers put on their sales hats and market the meat to restaurants, grocery stores and members of a food cooperative. A husband-wife team makes all the deliveries.
"We've been creative in our marketing strategy," Howerton says. "Patchwork feels it is important to sell quality products to all income levels. We don't just go after a niche market."
Its market includes about 50 restaurants in mid-Missouri, many in Columbia. They also sell to a specialty grocery store, four mainstream supermarkets and the 5,500-member food co-op. The pork products bear the Patchwork Family Farms label and are displayed in their own cases in stores.
Patchwork has received some financial support in the form of grants from nonprofit organizations and a grant from the U.S. Department of Agriculture. One of the nonprofits, the Federation of Southern Cooperatives, provided the fledgling organization with training on how to conduct a feasibility study; the Catholic Campaign for Human Development funded the study.
Patchwork Family Farms' sales have steadily increased since 1992. In 1997, Patchwork recorded $60,000 in gross sales. By 1999, that figure jumped to $196,000. Last year, total sales were $302,000.
The number of hog farmers who are participating in the project has also increased, to 20.
Despite the good news, Patchwork Family Farms is not yet at the breakeven point, Howerton says. "But we're getting closer."
In the 10 years since Patchwork Family Farms was started to help farmers keep their hog-producing businesses, the trend in corporate farming has continued in Missouri. The number of hogs produced in the state has risen dramatically with the influx of large corporate operations, but the number of Missouri families that are hog farmers has dropped to less than a third of previous levels, wrote John Ikerd, a retired University of Missouri professor, in the March/April 2001 issue of Small Farm Today.
Meanwhile, Patchwork Family Farms keeps working. The project has been recognized on a national level for its efforts to keep the independent family farmer in business. It has been featured on the Discovery Channel and at a Farm Aid concert.
"We have produced a project that is changing the system," Howerton says. "We're here to say these projects can be successful."
Bridges is a regular review of regional community and economic development issues. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System.
All other community development questions