 This is like the introduction set of a project that kind of has two different hats or maybe even three different hats that sometimes you'll hear in the presentation or what we're doing that we may put on my on once in a while. And one of them would be as an economic development director. When I returned home from college, I'm actually a consulting meteorologist. I returned back to the community to start that business working with local ag producers. And I had parents that were ill at the time and six siblings in the family to help the family transition the family farm. It is a 1200 it's two sections and then we have another half section located not next to the original two homesteads. But it is not what we're seeing in today's farm size and scale, which you would you know needed to be a successful commodity operation. So in this fifth generation transfer to my generation, I was part of my family's will that this operation could become viable for at least multiple of the six of us. Five of us live in the community all working professional jobs outside of the family farm and looking for a way to move in that direction. Obviously, with my background in meteorology and climatology, sustainable farming was something that is in my career realm. Part of the reason I moved back from Kansas City to the home community was to be one open spaces, be closer to the farm, watch my nieces and nephews grow up, but also to apply my college degree. Microclimate is very much part of what is in part of sustainable farming. Permaculture, zero escaping, things like that can all be applied to these sustainable techniques. But out northwest Kansas and commodity ag world, this is, you know, we're talking 10, 15 years ago when we made this decision and started this work, it was the odd duck, the odd ball, the crazy idea at the time. Well, times are changing and I'm proud to be here at this presentation and give a little background. So you got the economic development director hat there, the local farm hat, and then my role as the vice president of consumers for the co-op is a co-op of originally northwest Kansas farmers that now has expanded to 50 farms in three states. That's that tri-state area in the corner. Like we said, this was a out of the box idea 10, 15 years ago. So these farms had to go to the Denver market for our market. It was not local. We didn't have lots of farmers markets or the economy out there is not conducive for direct selling cells of meat. So that little background about the co-op to start this off kind of set the stage for the farms as they grow into the co-op and become part of the process. It's a producer. So actually this came into the economic development office when I served as economic development director the first three or four years I moved home as a part-time job to supplement the weather. It was Rocky Mountain Farmers Union, Oglala Commons organization that was working on some youth return home initiatives with the hometown competitiveness model in northwest Kansas. This concept formed based off of the Oklahoma food co-op which was getting some notoriety and success in the late 90s and early 2000s. So it is a like Oklahoma producer and consumer member co-op. You pay $100 to join the co-op and you can do volunteerism or be part of the co-op as a buying member. In particularly we started in the Denver area with about 30 customers and then producers are also a member and same thing $100 to become a producer member. It is bylawed in to be board controlled by the producers. So that is how it maintains a producer controlled co-op. So by the board structure it is driven by the consumer or by the producer. So my role as vice president of consumers is to develop new markets and strategic planning as the co-op grows. One is the online farmers market modeled after Oklahoma. Direct sales to customers. It is an online ordering system. They order from whichever farm they want, whichever item and then we distribute it, drop it off and trucks and trailers return back to the home originating site which is in northwest Kansas. We are now transitioning to a regional food hub and aggregator. So we are the first mile aggregator to the producer. Our drop off points and delivery sites in Denver are the last mile to the consumer. We are picking up some first mile back that comes back to northwest Kansas. We can talk about that a little bit later that is developing some backhaul and part of the northwest Kansas food work that is doing programs more to start on the food justice side markets but eventually maybe helping grocery stores and other farmers market with some of their supply issues in the communities as they get up and going. We got one that right now, we got 1,000 products. We go two times per month to the direct sales during the season. During the winter months it is one time a month. Actually on that direct sales side November is the number one month. We just did over 100 orders yesterday because of Thanksgiving and our turkeys. Our mission and values are we are producer and consumers uniting in the interests of locally grown food. We want to be environmentally sustainable economically viable and socially just and cultivate the farmer-consumer relationships. This last thing is the number one core value in the original board of directors which were all pretty much northwest Kansas producers are in that tri-state area. We did have some consumer members from Denver but they were in part of organizations that had that same mission. It is to revitalize our rural communities. If our rural communities and this sustainable farming is not part of that development piece it is critical to the survival of the community. That is naturally ingrained in our environment where our production and producers are and still the number one or driving mission of the co-op. This map kind of shows you the infrastructure of the co-op, our customer base obviously is a Denver. Our sorting location hub is right here in the middle and then our aggregation hub where the product kind of comes up. We have a truck that comes here and we got a truck that comes up from the Nebraska producers up here, comes down and we meet and aggregate here. The orders get sorted and then dropped off in 21 pickup hubs back to these clusters of people. On this map it is showing the aggregation, distribution and processing infrastructure. Every one of these blue sites are one of those pickup hubs. The yellow sites are our collection aggregation centers where say 12 farms in this area come in, collect here and then it collects and collects and goes down the interstate and same way here it collects and collects and then eventually gets there. That is what we call aggregation. These blue are actually distribution so when the trailer is here we leave at 7 in the morning, get here about noon, distribute, it goes out, trailers get back here, 7 p.m. on Thursdays and then these blue route is run on a Friday and then our weekly route runs out of Bennett on Fridays to the restaurants and stores downtown in Denver. These things are critical here. These are your USDA processing facilities. So that is what makes the clusters where the farms are. Kansas initially had more processing so it made more sense why we had farms already doing this a little bit and the capacity to start out here and this was such a void. Kansas has the state and USDA inspection since we are moving across state lines we have to have the USDA so these are all USDA. There is a combination of mobile processing and fixed facilities in here and then you get to Colorado and you kind of see what is happening here. They have lost a lot, it is bigger, people have tried, they do not have a state inspection system so it has created a lot of void around that processing. So basically like I said we have a core group here, we are developing, this is an up and coming group, there is a lot of specialty crop production going on there and then this Colorado, it is basically from Bennett, Colorado to Colorado Springs, another group of farmers that are smaller type farms but again there are still main markets coming in there. We do have a co-op down here, a partner co-op on the Ark Valley, one in the Salida area of Colorado and one in the Southwest that comes in here, collects into the system, eventually connects in Bennett and can backhaul and move up and down this area. We have a market set in here of 6 million people. The food hub definition here, this is what the USDA defines as a food hub that is where the co-op is moving more in direction. We are very unique because when you think of a food hub you usually think of the urban definition which you have Philadelphia, East Coast, Sacramento, Portland. Out here in this high plains region, our population center is Denver but high price of land and this distribution and lack of processing, it is a whole different landscape out there when we talk of hubs. The USDA definition is manages, aggregation, distribution and marketing of source identified local and regional product and these are the markets that typically a food hub works in. Again, we had to start retail because we are very, very small farms. They had to become sustainable, learn, grow, learn the rules and regulations. As we go, we are just starting to enter into some of this volume, retail thing and then eventually the big demand is going to come from these food hubs is how do we service the institutional markets, the interest and the market is there. This distribution and processing and system is in place. Local food system has lots of gaps in this part of the country. The key thing to take from this here is five to ten anchor producers, USDA statistics say that it takes 600K to one million to sustainably run the food hub function of what we are doing with the food co-op and history shows that it takes seven to eleven years to get there. Times are changing, the window of opportunity, the market demand, things are pressurizing there, they think that's now three to seven and that in our particular case since the distance we are working with in the area, we are probably more closer to the million plus before it works for the food co-op. The aggregation part, you hear that term, what is it, just to give you a little bit of an idea, it's the meat of the co-op or what we do. My position was to connection relationships and creating the market opportunity, then we source the product from the farms, links that production with the needs that we've identified in the market and do the logistics to get it there, that's the drop sites, the label, the tracking, the pickup delivery, the sorting, the distribution and the more important thing is we keep that value chain from the producer to the end consumer. It is the know your farmer, it's the I want to know where it comes from, I want to know if my producer is organic and the website allows that to be listed individually by the farm, the farm controls their prices, we have a percentage that is on the consumer side of 10 percent and the producer side of 15 and we try to average around that 20 percent margin similar to other food industry type businesses, so it is a low margin, intense infrastructure type business but we keep that value chain to stay in the local food or sustainable business model. This is the history of the co-op, the sales, the only thing I want to hear, this was the direct sales side of the co-op is producers learn and grow, we saw a little bit of a jump here that year, we basically some of this change in here to here was due to some website and internal changes and then here you're noticing that volume side taking effect, it's changing the dynamics of the co-op, we're nearing this, we are in twin age stage now where we're still volunteer board, we got a few part-time positions but now we got to start making serious changes as far as you know what we're going to do is a co-op to be sustainable. This obviously being a producer in the co-op and the presentation topic here is poultry, we had some meat, our limiting factor on the meat is the processing, so we have been had to form an entity to raise chickens, process them and then enter them into this market demand. You've heard the other forums in this conference talk about poultry, that's the money, the interest opportunity, you heard the processing issue coming up to solve that but when we did our expansion plan studies it said the capacity, the ability for all these forums to do some poultry production, enter into this system and go to Denver is probably the leader or the first entity or first product to become an anchor product in the system, follow that with specialty crops because that's sexy and that's the highest demand thing, if you can grow the specialty crop producers work on that at the same time and then work on this processing and start building up meats and grains and some of the other items that can go into the system to build the food hub. So here's our history with High Plains poultry or our first poultry farmers were several of them, I think there might have been of the 12 at least five to half of them had poultry on the farm selling at the local farmers markets eggs or trying to go into schools and that so so we we had these small orders going to Denver in 2008 and 10 that kept that system kept on going and then in 2011 we're like hey here's some opportunities so the poultry farmers started growing and at that time we had to go to McPherson, Kansas so you can imagine what was going on we'd had Colorado farmers picking up chickens all the way back to McPherson you drop them off have to go back home and then send another vehicle to go pick them up and come back and very cost inefficient and then one of the producers in in Atwood at Rawlins County area decided well we're going to go ahead and invest we want to grow as a beef producer expanding the poultry side of the meat business because we're going to do poultry bought the processing equipment to basically do it on the farm but we had to do it USDA so they because of a ostrich license at the local processing plant allowed them to have the ability to do poultry in the facility so basically the farmer rented the kill room and the date on one day a month or whenever when they weren't killing they use that room to process the poultry in scale and start moving more poultry through the system. 2012 we did that expansion plan that said you got the infrastructure there go for it with the eggs and the meat that's where you guys need us or where the co-option start foking its attention and then the group of farmers in 214 said we got to figure out a way to do our processing because we're in the local guys way and we're tired of going to the person so we did the serigrant the rest of this presentation will go into the process of what we did during the grant 2015 we ended up deciding to construct an MPU which is part of the serigrant process and then as you saw in the growth of the co-op most of that growth or about 28% of it is the meat and the eggs the rest is we're now we're able to go weekly we do have some beef going into that system and some of the specialty crops so there is a small percentage of that growth that is opening the ways for those other farms now to to grow their markets as well so our seri project this was our performance targets and objectives we wanted to organize first estimate the startup and operating costs of a at that time we were looking we were still thinking fixed will this thing be mobile we still built it as a mobile but it's really fixed at this point determine the feasibility find a site do the permitting that's required both locally state and usda federal equipment purchasing and fabrication implementation startup and develop a plan to enter that co-op market opportunity this is the outcomes and the impacts as you can see we got the plant up and running in october of 2015 and the co-op that was the first year we were able to really deliver through the winter with a with a with a product item so we did 600 chickens and 23 turkeys at Thanksgiving this year this year we are I you know I think this is this was a close estimate to where we're at at the end of the year and we just did our turkeys um so again it's an estimated total and this in our projection feasibility is where we thought the processing plant would end up in 2019 fully use utilizing the crews and what can be done in the unit that we built our revenues this was from these right here this is what you saw in that graph for 2016 that 25 percent of that 400,000 and this is what this would do in 2019 and then as far as the farms go right here it was two farms right here three or four and then here we could be up to 12 working in this facility our other outcomes and impacts we wanted to increase jobs obviously because the economic development 2016 it was family part-time labor this year we have paid four to eight part-time workers operating two three two days processing one day packaging and then we have this projection for 2019 again I brought this back up to uh really highlight that 100,000 increase in the co-op sales is sitting here for an anchor producer if we can get four or three more of those say a hydroponic vegetable facility something else creating that same volume we're on our way to to be an sustainable and viable food hub okay back to the MPU here we we started up our accomplishments we formed an entity for four farms to be able to invest into the we didn't take other than the funding that we had in the SARA grant we actually formed an LLC to invest with four farms we did the startup business plan fabrication and budget did the financing within our original SARA grant I think we had 15,000 of it going to the infrastructure and equipment and fabrication costs and and then the rest was equity investment from each of the farms the feasibility obviously our current situations weren't feasible uh this is was where we're still kind of at and this has to do uh we we decided to go mobile by looking at we toured uh went to ballman's uh Anita's and watch what their fixed facility did we went to Cali crates uh in st francis beef processing plant then we went to Taos New Mexico and saw where they had a mobile unit that was fixed and doing all sides kinds of livestock in it lamb pigs one day they had some pulled you know they they were doing everything in Taos um a site location travel available labor took all that into consideration uh when we did our economics on it we're from the McPherson stuff we were saving three dollars per bird thought with those numbers of I always showed up there we figured this unit will break even operational costs sometime next year around the 12,000 to 15,000 chicken per year mark and we started I think we're at 450 for processing of a bird if you're cutting it it's another cutting them up into parts another dollar 25 give you kind of an idea what the costs are this is probably the biggest variable we thought we were going to do this in three or four months and be up and running last June we didn't start till October last year so it took us 14 months to do that and this was probably the biggest reason for that we did have some since we farmers built it ourselves particularly the lead of one of the farmers who was looking at doing this anyway on their own um um so we with there was some time to fit into our personal farming schedules that created some time but the biggest was the hoops to get USDA state all these food safety regulatory issues in line and understanding them and knowing what we were doing I don't want anybody to get the the notion that the USDA is against or all the things you hear that why you can't do this they want to work with you it's just new to them and they aren't staffed and you're you're dealing with regions and moving employees for like our ffs is had to come from Arkansas our everyday inspector that has to be on site had to be trained because he's never seen poultry in his life being in Kansas so we had you know it's all that took time to put it together and then everybody's receptive that USDA we want to learn how to do this because this is an opportunity for for everyone uh that is food safety inspection something this is hazard critical access point plant you know the within the plant every food safe point critical point where a bacteria could develop on the chicken you have to have a check and the process in place uh standard safe operating procedures so that's your plan to all the way through from the cage into the plucker and and all your processes are keep the mice out of the facility clean bathrooms you name it it's in there um and uh you know there we had to take our one of our farmers you know took the training and did a lot of this work you know internally so we owe a lot to to that process there uh our scale up plan um this is basically what what we're what them numbers showed you uh 500 um as we speak we can capacity to go to that uh 100 a shift does uh because of this a shift of five to seven it's like we got seven people on a shift can do if they're really good they're getting up here around this number in three hours that's about how many birds we process and since we air chill them these are going into the air chiller and you have to have them down to 40 degrees in three hours and then afternoon the inspector has his eight hour day and so that's about all you can do in a shift now you could run two shifts have two inspectors you could go to more days a week and bring in another inspector but that's down the road uh we uh that'll take time might it be a new might have to be a second inspector um so those are some things that that either slow the growth or put you in this plan and again that break even in 2017 okay here here's our design we ended up we we purchased a reefer trailer and then um if you saw the picture here we actually this processing there's a our local vet office is here and this is just north of atwood about two miles uh this is his circular drive he's got pins back there we we operate we rent this from the local vet and then when we're processing our cars park here and we load the chickens in the back from the back end um so they come in this back in right here is the inspector's area he's got a restroom a locker a desk clothing there the chickens load on that backside they come in we use killing cones here's our plucker we have one person here two people working in here and then we hand through here to the eviscerating area we have uh you know the inspector stands over here and the chickens we got you know the legs and cutting the lining and then checking the feathers so you got a lot of checking here and to get that bird into the air chiller so that's how it runs through there and again we're doing about 150 and three hours um the air chill here generally they they'll break for lunch come back and then they can either start packaging or generally we let them sit overnight and and start doing it the next day these this market that all of these chickens are going to is fresh meat going back to dember restaurants right now we and they want three i think it's two and a half to three and a half pounders because then they split them in half and make about two meals out of them anything that's smaller or bigger we freeze it and that goes into our local sales right markets uh benefits uh convenient and efficient uh cost effective easier to access in the usd inspected facility um the challenges probably asking how much it costs to do this i talked about the construction time uh when you're doing it ourselves the regulatory processes and then the funding uh we we thought when we did our original budget it would be around $50,000 it ended up being 75 and a lot of that we we did calculate a value on time and um where we are so that kind of gives you an idea if you were to go buy this already prepared and not go through the that trailer on cornerstone i think i saw of that size was about $130,000 for all the equipment so it does save some um regulatory you know and for us the other reason we we we we kind of do believe that at some point it may grow to where we possibly need a fixed facility particularly um where maybe different but we're covering a lot of areas so maybe it's doing multi-species and that those were so unanswerable at the time that we just wanted to focus on the chicken and then we go this thing could move to another group of producers once it got full and then we then we could work on that so more of the general plan is it will probably move across the state line to one of the other clusters of producers whether it's up in the Nebraska Panhandle or down there close to Colorado go through the same process with the permitting and regulatory and let's say that would take because we don't want to shut down now so once that process kicks in have the other thing up and running so that one can move and and do that type of transition uh so that that's that's was a lot of them when we say mobile it's not going from farm to farm mobile to us was to cross those state lines and do this whole process over again and and and go from there our farms are more mobile I think to do the the farm to farm would be wiser for us to get a do a hub facility that does aggregation and collection and then buy a sprinter vehicle to go to the farms or a trade or trailer if they're live and sprinter for vegetables and go pick stuff up and that but that's part of your you know if you're doing a food hub things to consider um so I mean those are you know you had some of the questions on on those um again then you know our publications and outreach we have a healthy communities initiative in northwest Kansas so they chose to do food as their initiative and they sent all their technical assistant people from eastern Kansas and lawyers from Minneapolis and all that out to watch and tour this when we were processing one day so it's being assimilated through those type healthy communities communities if you're from there's 20 of them in Kansas they have a pretty good idea what's going on out there and would connect with us the USDA employees themselves are talking in and and you know they they like I said are probably receptive of seeing more poultry in Kansas and working working with farmers to to do more of it our high plains food co-op annual meeting this meeting and other other meetings are part of our outreach future recommendations from us that the crew or the co-op that worked on this project um work with your policy councils and your states and USDA if you if you got the poll to go to Washington and start with the secretary down or somehow let's let's talk about streamlining this and planning a little bit ahead so so the next people don't have to take so long or another state and coordination somehow there be honest with the startup funding requirements again it's not a huge investment to do one of the smaller scales but you know be any project you know figure some contingency on that and then be conservative with the market and the customers there's only poultry farming isn't easy and so so be realistic on what you can actually deliver and don't over promise the customer that you're going to have fresh chickens for 20 restaurants when you can only really just work with one to start so in that 2014 we actually with those 600 and what we were already doing piloted with five and then this year we have about 25 customers in this market so that's that's probably my biggest what if you're going to go into the scale up thing and try to go from direct farmers market and that really communicate that with your customer uh they'll they'll understand if bad weather comes and delivery doesn't get out there if chickens all die that maybe for two weeks they might have to pull off the menu but as long as they know you communicate that with them uh the other thing we learned if you do this and there's entities out there that say they're doing this compete against you on the pricing they are raising their chickens in Arkansas or Iowa and locally processing them in your market selling them as local and the quality is not there and those customers will come back so don't lower your price that would be my other recommendation is compete in your market and understand your customer yeah now like I said ours is right now fixed and and and when we when we're if we're gonna we you know if you pull up ser and look at the other projects across the country some of them are you know but then they don't like us we have that state line thing that brings the USDA in a lot of those other ones in Vermont and those are our states and they're run by a university or that and they do go farm to farm to farm so the state the state ones depending on the state if it's approved and they don't the state inspect sometimes the state inspection there is no inspector it's just approved and then it can do it but Kansas and you know we're we're we got an inspection system that we're USDA so it doesn't matter but if if we were to do a mobile in Kansas we'd have to operate under those guidelines and probably not have to have the inspector there each time to the bird so it could save you you weren't going the USDA route but then in Kansas you have to limit if you're gonna you got choose either USDA or Kansas you can't as a farm market both ways and if you would choose the Kansas side your farm is limited to 20,000 that's kind of how I understand it from our regional guy that they would like like they do with your meat license they show up randomly once or twice a year so okay thank you I'm wondering if you did the the figures on how the cost of making this mobile facility would compare to the cost of doing a traditional stationary facility a traditional um we now we have now a all meat type facility I know the last one we toured in Colorado that had the poultry sign that the cream of the crop was 1.3 million if you were just to put up a shed go through the process with the drainage and that you would probably be very close to this same figure um but that you know that would be bait I mean any expansion if you did something on the farm you could probably anticipate around that same cost I was doing your numbers on the chickens for 600 chickens figures out to about 13 33 a chicken yep yep that year that's probably what we are we're selling them for 12 25 those three and a half pounders and then when you raised your production up to what was it 8,000 and just rough figures come out to about 12 50 a chicken or something I would just guess the numbers so how much is your your uh transportation cost on 15 for uh accounting marketing packaging and the transportation you add 15 yeah it's about seven percent for the transportation seven to eight two to three for your internal uh stuff and then the other percent goes back into the co-op for infrastructures uh it's 350 per pound and the farm is taking back about three bucks it's like 60 minus 60 cents 290 something like that per per pound