 My name is Nick Carter, and if you guys are here to learn how to run a rabbit farm, you have been misled because you're looking at a guy who has never run a successful rabbitry. I had a few cotton tails that I rescued from the pine cones under the tree when I was a kid and threw in a cage and believe it or not they survived until we ate them, fattened them up. I've processed a grand total of three rabbits commercially on the kill floor and I think I've made like maybe four deliveries personally to our customers. So has anyone ever seen the movie Office Space? The guy who's the, I'm a people person, why don't you get this? People ask me all the time with Meet the Rabbit, what do you do? And it's really interesting, what I've done is put together a business around rabbitries. Back in 2011, I decided I'm an entrepreneur, I wanted to start a food related business. So that was kind of what I wanted to do. Now to take a step back, I spent 18 years farming with my dad before leaving to go to college. So I grew up farming, dad still farms, I help him in the fall farming. I've got an agricultural background, which is why I wanted to get back into local food as an entrepreneur. I'd spent about 10 years in high tech businesses. So I'd started software companies consulting and wanted to do something more organic, not in the USDA certified sense, but just I wanted to get back into food and in looking at what opportunities were out there, the idea to start a rabbitry really kind of left out to me. It had a lot of practical benefits. It seemed very attainable. There was also just some humor behind it. So this actually started when I was part of a dinner club, which was my wife and some of her friends decided that once a quarter we'd get together as couples and we would all prepare dinners together. And the whole goal of it was to learn different cultural foods and stuff like that. Long story short, we've got a friend of ours, they brought us over to their house and we had to work together and we were preparing Persian food. Do you know why there are no Persian restaurants? Stuff was awful. I hated it. It was and I had to be a part of this the whole afternoon. So I said, fine, when it gets time to learn about my culture, you all are going to learn about how I grew up and we're going to prepare rabbit together and they're going to come live. And so I actually when they came over to our house a few months later and we're in our backyard, I'm showing them how to process humanely, showing them we went from cage to plate and we enjoyed it. And everyone had fun and as we were sitting there talking, so one said, well, where can I get this? Where can I buy this? And that's really where it started was the answer is nowhere. There was no real commercial availability for rabbit meat and being the entrepreneur, one of my friends said, why don't you start that business? And I said, sounds like a great idea and meet the rabbit was born. There are, like I said, a lot of good reasons to start rabbitries. Most of them stemming, how many of you by show of hands are farmers? I know that's a dumb question, I'm at a farm conference, right? Just thought I'd ask. So you know, okay, that's how I'd say it, you know, in the fall when dad needs me to haul wagons. There's a lot of, from the production side, a lot of benefits to rabbit. High feed conversion ratio, as you know. Inexpensive to raise, easy to raise. You can convert existing like chicken coops and other cages. They're just simple to get into. Also quick to market. I mean, if you were wanting to get into Wagyu beef, you've got 18 months before you've got a marketable product. With rabbits, you've got 10 weeks. I mean, you can fall over and have rabbits, you know. So there's a lot of ease in that arena. The problem is, if you wanted to get into Wagyu beef or grass fed beef or Berkshire pork or free range chicken, some other kind of value added agriculture and to differentiate the income on your farm, there are places that process beef and process pork and process chicken and you can go there, get on their schedule and start that company. That was the greatest challenge that we found with rabbits was that this was not just starting a farm process. We were starting a market. We were developing a new market that did not exist before. So that was the biggest challenge that we had to overcome. If I just started a farm growing rabbits, which I thought about doing and was investigating doing that, I'd have nowhere to sell it. First of all, I'd have nowhere to process it. There was nowhere in the state of Indiana where we could process rabbits, up until September of 2012, which was our first slaughter. Even if I went out and I built a processing facility and I got through state inspection and all that stuff and zoning, which was a nightmare, I would have no market because there weren't a lot of places carrying it currently. Not a lot of people were exposed to it. But at the same time, if I just went out and started to be a rabbit salesman, I had no supply. So we had this whole systemic issue and starting a whole system is much more difficult than starting one cog of the system. And what we're going to talk about, what I'm mainly going to talk about is profitability. Profitability, profitability, profitability. I mentioned I'm an entrepreneur. I'm a business guy. My degree is in business. My heart's in ag. My degree is in business and my brain is in business. And so I knew that when we talk about sustainable ag, it has to be a sustainable business too. It has to mean profit for a farmer, profit for the processors and the people that are involved in it, profit for the distributors. So we started from the ground up. We figured out how much it would take for a farm to be profitable at this, and we'll talk about that today. We'll talk about the processors and the business for human consumption. You will have to probably sweet talk whoever your nearest locker is into devoting one morning to rabbit slaughter. That's going to take some convincing because they more than likely are not tooled to do it or trained to do it or have any interest to do it. We'll talk about distribution and we'll talk about finally the retail. So let's start with the farm. Farm profitability. When we set out to start this, we wanted to kind of stack the deck against us, if you will. We didn't want to figure out a path of profitability that kind of cut out a lot of the middleman, if you will. I wanted to look at something that would be scalable. In other words, figure out if it could be someday profitable to do rabbit on a larger scale than simply at a farmer's market, not at all to disparage farmer's markets or direct ag to consumer marketing. That's not my point. What I'm saying is I wanted to find out if this was going to scale to where we could as we are today, distributing rabbit all the way from Nashville to Chicago and everywhere in between through larger distribution. What that boils down to is we had to, at least on paper because in the beginning it was on paper and we were pretending that we were buying the rabbit. This was like we made a rabbit sale barn. This is what I grew up doing with our freezer beef. We would just load up the trailer when they were at market weight and we got the market price board. We had to figure out what's a market price and the Chicago Board of Trade wasn't helping us. There is no commodity price on rabbits. So that was one of the first things we had to do was determine where is this market price going to be if the farmer is only in the production mode of this. So in other words, they're not going to be taking profit from the end of distribution and retail. I'm not saying that it's disallowed. That actually adds to your margin but there's also costs in that. If the farmer were to raise rabbits and sell to us as a market what do they need to earn in order for this to make sense for them? Of course it's all opportunity costs right because that cage space, that barn space could have gone to something else that's got to make sense for them. What we found was 339 pound hanging weight. That's actually still for the last two years now. That has been a hard market rate and the farmer through efficiencies has been improving his profitability and we haven't increased or changed this because like I said this isn't trading in Chicago so it's not as though we've got tickering up and down anywhere. We just set the price. We figured out that this would be profitable. Because of the goal of our serigrant, the stated goal of our serigrant was to determine if this would be profitable at all three stages. The three stages we identified originally were farming, processing and retail. We'll talk in a minute. We missed the stage in there. Distribution and I'll bring that up. But we started out and said we can't start with this not being profitable for the farmer. So we began the process by going to a farmer and saying he was already raising some rabbits. He was doing them for farmers markets very small scale and said if we were to do this on a larger scale, what's your price? So we didn't go to the farmer and say here's what we're willing to pay. Figure out how to make it work. He set the price and we said okay we'll work with that. Now once we come back and say we've got to go lower. So he set the price actually at $2 a pound live weight if you're wondering where this came from. He wanted $2 a pound live weight. The processor that we went to did not have a Department of Waging Measures inspected scale that they could use for live weight. So we averaged out their dress percentages which was about 57 to 59 percent became the $3.39 hanging. This does not include liver and kidneys which can be sold. There's a market for that. But this is hanging weight. I say hanging weight because if anybody has processed beef or pork that's the term used you don't actually hang these things. This is not on the table weight. Right. So this is yes after the awful has been removed the fur has been removed and the head has been removed this is sellable product. It does make the price calculation easier as you move up the chain because our cost of goods sold going into the business terminology or in our accounting our cost of goods was fixed at $3.39. This incentivized the farmer to bring us mature rabbits too. If they were bringing us rabbits that were over mature or under mature they had not filled out their bone weight sorry they had not filled out their bone structure yet they weren't going to make as much. They wanted to bring us mature rabbits. It actually worked out really really well it created a symbiotic relationship where the farmer was incentivized to bring us high yield rabbits. If they brought us rabbits that didn't yield well they didn't pay them well. So that's where we started out if you're wondering in terms of dollars what to expect that's where we started at $3.39 a pound hanging weight or dressed weight if we actually call it and at that rate according to the grant research that we did our farmers would break even at 125 friars a month. They'd break even. If we could move 125 friars by the way how many of you are currently growing rabbits or are familiar pretty familiar with rabbits or broilers or roasters right? We've developed an entirely friar market there's just not much of a market in the U.S. for the roasters or broilers which are more mature. Also your feed costs goes way way higher feed conversion ratio that everyone loves about rabbits is true up to about 14 weeks and then they start burning pellets like it's going on a style just to maintain weight. So this is all friars they break even there. Well sorry they would they'd make profit out of 226 friars a month but this would actually be valuable for them what our farmer said but the effort that I had to put into this you know some of the capital expenditure if I can move 200 friars a month I'll do this. And that netted for him about $4,000 a year in net profit and that's what he was saying obviously this isn't going to pay the mortgage but I mean he was a diversified farm he's got specialty crops he's got Berkshire hogs actually he was raising he's got grass fed meat he's got free range chickens he now grows for us quail, pheasant adding this into the mix of his diversified income on the farm he said if I can move 200 friars a month we'll do it. So that's what we found out we let the farmer dictate this. The problem is you don't move 200 friars a month. The problem is one month we may need 100 friars one month we may need I mean 300 is low we had there's a food convention in Indianapolis called Dig In Dig Indiana it's all local food they needed a thousand friars for this because it's this huge fair luckily they gave us the order in advance so we said these are going to come frozen and so we started building to it so one of the first challenges that came up was this issue the ebb and flow of the demand and mind you we had structured the business in such a way that this processing entity Meet the Rabbit, my company bought from the farmer so one solution to this if you are farmers is that you can go and you can pay the processing so you've paid for the cost of the processing process the product bring it back to your farm have it walk in or a chest freezer make sure that it's inspected by the appropriate boards of help so that you can store meat there and you can basically you manage your own expansion if you will and the ebb and flow of the production by storing your product there having an inventory selling through that inventory and that's just a game of trying to hit the middle that makes sense managing your inventory that way that's an option it's not the way we went but that's a possibility so you could do frozen storage in that way one thing I will say about the topic of fresh and frozen I got when I was doing this I got on the phone people have done this before and I got on the phone nobody by the way had done this in my market so it's not like I was ever talking to a competitor there's a lot of this going on in the coast I got on the phone with this guy who had run a ravetry in South Carolina and he was very very gracious to talk to me I should have written his name down because to this day I had no idea who it was I was like dialing numbers often that I just found on websites spent probably 5 or 10 minutes with him and one of the things he said to me in a 10 minute conversation like three times was get out of the fresh market he said run from fresh like it's the plague and I was like whatever all the chefs were telling me we needed fresh we want fresh we want fresh so I didn't miss this advice and we were having we had a fresh supply from about the first month the problem with fresh is rabbits do not have the same shelf life like a chicken or a pork or anything I mean you've got two to four weeks if you've got it in the refrigerator well there'd be you've got seven days with a rabbit before they start to smell they're not unsafe but our customers were not going to be happy with this so we were like racing the clock we'd have a fresh supply for like five days and then we're moving it into the freezer in order to sustain the shelf life we lost so much product to shrink it there was no way to sustain that and the very interesting thing that happened was I'm sorry I didn't have the whole question please write your question down because of the recording and holding questions in the end if you have questions we've read it down and I will be in time for questions what happened was our customers were saying we want fresh we've got to be fresh we've got to be fresh we only buy it at this time we came back and we said I'm sorry we're only going to be frozen they were like okay you know because guess what there's nobody else selling rabbits in Indiana so if you want rabbit on your menu you're buying it frozen and you're buying it from me so we ended up and skinned our knees there which would be entirely frozen that was a little deviation we're talking about how to manage this ebb and flow of supply and so we do freeze all of our product it helps us on the processing end being these you will the manufacturer of the food we freeze our inventory but we don't rack up like hundreds and hundreds and hundreds of inventory and so we are still burying our kill amounts week to week every Friday our kill floor manager tells our farmer we kill every Monday we still do how many to bring and I mean it could be 80 it could be 100 we're doing roughly right now 10 friars a month but we're up to in terms of our distribution so if you're growing rabbits though you know this is again not light beef okay so if I've got a fact how I can keep him probably a couple of months maybe even longer if I need to you know I can I've got a window of when I can bring him to slaughter if the market's just not quite there yet with rabbits you don't have okay it's a very very narrow window of time we'll talk about that in a minute we'll talk about the production stuff but the what you need is an expansion chamber and what we found was the not for human consumption market otherwise known as so if you are going to start a successful ravetry for human consumption you've got to find that secondary market for pet food talk to local zoos animal reserves I mean there are places around the animal rescue where these like wild crazy people have lions in their backyard kid you're not I grew up a mile away from one they got a few of meat and they're not shopping for grass fed beef they need something that they can feed them economically that gives you an expansion chamber and the expansion chamber is pretty easy now they don't pay nearly what we pay they're not going to pay you two dollars a pound of live meat they'll pay you about a dollar a pound dress weight but their dress includes quite a bit more you can skim through the nose they'll take head bone and all liver and kidneys so you're going to get you're going to yield more you're going to be talking more like 75% of the animals live weight and it's an expansion chamber it's a secondary market it's not where you're going to build your primary offer although you can but you need your secondary market the other benefit of this no need for that health inspection like I mentioned this is on farm processing so what happens is you've bred to roughly you want to try and hit about two or three hundred a month in terms of fryers so you've tried to cull that steady flow well we go lean for a couple of months and you're looking at fryers that are getting 13 weeks old you kill skin throw them in a trash bag and freeze them there's no health requirements for feeding lions or tigers there so you can do that on farm and manage your own it's heard that way alright couple other tips in terms of the farm that you need to know about we slow kill fast we slow kill fast this is second hand for me so I'm not the guy who's raising our rabbits but I'm talking with them quite a bit one of the things I hear a lot is actually help the profitability of our two farms that we buy from has been they mean as slow as possible actually because their highest cost input is guess what the pellets are rather expensive so they mean slow and they kill fast if a rabbit is 12 weeks old and we didn't tell them that Friday to bring it the next Monday to kill it at any cost like I mentioned the feed conversion ratio rapidly declines after 12 weeks if you can get your rabbits to market weight at 10 weeks so then you know that you've got a four and a half to five and a half pound fryer that's by the way what we target that way four and a half to five and a half pounds that's about where we get our best yields based off of what we want we want at least a two and a half to three pound fryer that we're delivering to our customers and our growers don't want to be feeding these rabbits expensive pellets when their feed conversion ratio is dropping off so the difference between a five and a half pound fryer and a six or a seven pound fryer is quite a bit of difference in terms of feed costs does that all make sense? okay so that's where we're targeting weaned slow feed the does really really really well so that you can move the pellets as late as possible and you'll have to work on that in terms of there's you can't get attached to these guys and when they're 10 or 11 weeks old you've got to be getting ready that if they're not ready to go and market eliminate them dispatch the animal put it in the freezer put that in the freezer for the next year until the zoo calls or until the arena contract comes around weaned slow kill fast make friends with the vet your second highest cost for these rabbits is going to be work out this was the the learning lesson that we got I mentioned our grower and actually we discovered this long after we had submitted our final report for SAIR so this isn't even in the report because we had hit 125 we were approaching where we were doing about 150 to 200 rabbits a month by the time we finished all of our research and stuff we reported back to SAIR we were doing well, the farmer's making what he said he wanted to be making we're almost there and we can see that we were going to get there everyone was happy, was going great counted a success, move on now we're doing 600 fryers a month now he's got a whole lot bigger ravetry and what he didn't know we didn't know is that the difference between raising 200 fryers a month and raising 600 fryers a month in terms of managing that herd and the ability that disease has to ravage your inventory is pretty high mainly respiratory distress mainly in these months you can't get quite the air flow in your barns you got to keep water heated things like that so as you are developing this talk to your local veterinarian I'm certain if you're raising livestock right now you've got a relationship with a vet find out if they know anything about rabbits and if they don't buy the guy a book because you are going to want somebody who can help you when you see a sniffle don't wait until one dies or anything like that because these things can get an eight week old that sneezes grab the hatchet put it in the freezer, get it out of your herd lessons learned next thing if you're wondering one of the things that comes up is breed a breed we raise and the person who knows the answer to that question is certain that they've got the right answer and everyone's got a different answer I've seen champagne to margins I've seen sattons I've seen all-tex I've seen New Zealand, Californians it's all across the board and we originally said we will only buy Californians and New Zealand that's a standard meat rabbit that's a meat pan, that's your basic and they are great feed conversion ratio great long loins okay eventually we learned that really what matters is not so much the breed although we don't want to be buying flimish giants or something like that so within reason what really matters is white which means no losing, no losing in reds we don't buy broken if there's black fur on it, we're not buying it this is our requirement now here's why how many of you have processed rabbits? I don't mean content so you know that the fur a lot of our standard operating procedures our SOP for the rabbit processing has to do with management of fur okay it's like dunk in water first and then we've got water there and it's because that stuff goes everywhere and so we do everything that we possibly can to keep the fur from making it under the finished product but guess what we will succeed 100% and white fur on white meat is invisible is a return product from a very angry customer there's hair in my food well there was hair in the other group too but you just didn't see it and when you threw it out the grill it got all burnt up that's why and it sounds very silly but that's a very important thing to do however if you farm rabbits you know that you're genetic you're going to get broken again secondary market you've got to have a secondary market because for human consumption you're not going to sell those broken unless I mean we've made some exceptions you know we've got like some spots in your paws or something like that and the paws come off early in the process anyway but by and large you do not want color satins have satin color for your little colors but that's okay a champagne color is okay you do not want a black or a red second thing regarding farming so I mentioned the breed even though everyone thinks that the breed is really really important not quite as important as the color we have a running joke and I got in trouble because I actually said this to a reporter one time and it went in front that's how the press works guys somebody asked me if they were free range and I said you know what we call free range rabbit these things I mean you can't you can't do that now there are some models I've read about and I've not used them and none of our farmers have used them you're basically they're small moving hudges you guys want to talk about them high labor input you've got to keep them covered though they have no way to defend themselves and they will die from fear too so even if you have them well covered but the coyote is right outside that cage that rabbit's going to die the whole and you don't have one in a cage we usually cage them by so you get six or seven kids together so it's too costly to do that it's also very labor intensive to move these rotate these things around and then get fresh grass and you know what I found was a whole lot easier just cutting the grass and bringing that to the rabbit so if you really want grass fed you want to have that kind of natural foliage going into the rabbit's diet which we recommend really good idea adding the rubbish it helps the rabbit to modify its own diet what it needs for its own health great idea cut the grass and bring it to it the second side of this is that everyone pictures free range having this meaning that it's happy animal you know roaming around the countryside except rabbits are they have agoraphobia they don't like wide open spaces they're not like chickens and cows and pigs they're like ooh wide open spaces if you hook a rabbit in this room and you're like here you go room to run you will find them in three minutes in the smallest corner which head down buried into a little cubby that's where they want to be so we use larger than normal cages we don't overpopulate the cages I don't want to be dismissive of the humane treatment of our animal we treat our animals but it's a difficult thing to educate the consumers that humane doesn't just mean turning the blues on the countryside when you're talking about an animal that likes to live and if you held a pet rabbit it crawls up your sleeve it puts its head down here they want to be in a cage they're not upset by this as long as they're not overpopulated as long as you on our farms anyway we found that we cage kids of a litter makes litter they will destroy each other if you do and we had one grower that started buying from one time his animal started showing up and a lot of them would have ears we stopped buying from them we were cageing them you're overpopulating them they gnaw each other's ears off so we stopped buying from them so don't get all cracked up about the production model of free-range when it comes to rabbits alright, let's talk about the second stage in this it has got to be probable for this to make any sense whatsoever and that's processing how many of you know of an inspected processing facility that will slaughter rabbits in Ohio? there are a few I've got my slides out of order but I've got a list of the ones in the state of Ohio that will do it if one of them is not nearby we can talk about this because in Indiana meet the rabbit on September 4th, 2012 conducted the first ever state inspected rabbit slaughter in Indiana previously there had been a USDA plant up in northern Indiana that had done some rabbit under USDA's inspection they no longer do it because the USDA has made it harder and harder and harder to do this to the degree that they were requiring a separate kill floor for any game than for non-game if you're not familiar with why this is such a problem it's because the USDA's body of regulations essentially they got too specific when they said instead of saying we're going to require inspection for meat they said we're going to require inspection for and listed what they defined as meat rabbit didn't make the cut this was back in the 17s nobody thought much of it at the time because nobody was eating really really meat and stuff like that it just didn't matter well then what happens when states start to build their own state regulations and Board of Health and stuff like that they go to the USDA they copy, they paste, they go into word find replace USDA with Board of Animal Health Indiana and that's it boom you got a Board of Animal Health regulations so they copy and paste and you can find this everywhere it's called an amenable species that's the problem the regulations are silent on it then you go over to what's called an Indiana anyways the retail food now I'm going to miss it retail food covers something like that and I'm certain you've got the same thing in Ohio you've got this everywhere which says in order to sell meat to the public and ask for inspection you've got the Board of Animal Health that says we don't rabbits not meat I don't know what you're talking about and you've got the retail code that says you have to have an inspection this was a problem so in the state of Indiana we were able to work with our state Board of Health and show them that we can pay an extra fee so we have to pay $24 an hour to have the processor there we have to pay extra to have the processor on the floor and they will inspect these rabbits under state inspection give us the state seal and now we're good to go now you heard me mention earlier that we distribute now from Chicago to Nashville what's the big deal when if you're doing beef right why do you want to go to a USDA plan over a state inspection plan cross state lines guess what when the USDA said you don't think rabbits means they said that that regulation doesn't apply to rabbits so what that means is with a state seal we can do whatever we want to this is the point in which I would like to tell you I am not an attorney and this should not be considered as legal advice but if you research it yourself you'll find out that's pretty much that's the loophole you get to follow USDA also charges an inspection fee on non-meanable species so when a USDA plant does do rabbit or elk or anything that's non-meanable species which you know if you ride your inspector they well I didn't say that out loud if you really sweet talk your inspector they'll finally let you do it even though they'll tell you that you're not allowed to you are but it's I believe $55 an hour for the inspection inspection fees usually less expensive ours in Indiana was $24 an hour $20 an hour here thank you $20 an hour on my mind I'm moving my business my profitability so you got a lower cost of inspection and yet you can now sell this across state lines provided there's reciprocity with those states which we checked I mean so that was one of the first calls we call Illinois where we're animal health hey we've got an Indiana insignia can we sell it yeah that's fine reciprocity that was actually rather easy so I would recommend looking at state-inspected facilities your costs are going to be lower you're going to find somebody that's more if they're not already doing rabbits they're more apt to be interested in another avenue for revenue like this mainly because how many of you know a state-inspected locker planner or kill floor that has closed in the last 10 years I mean there it's a hard business to stay competitive and you know why because they can't sell their products across state lines so they're looking for other ways to do revenue now that doesn't mean that they're eager to change and get new equipment and get new stuff you have to convince them of this this was probably the hardest part of my business I did not realize it would be finding the process it turned out to be an incredibly difficult part of the business and luckily I was about to be done when I met Adam Loody Loody meets Loody's butcher shops he has his own state-inspected facility and I contacted him and said if you want to do rabbits and this is what happened you'll probably hear this too if you're going to try and talk somebody into getting rabbits that isn't currently doing it no, you know, people ask us about that all the time but it's just not worth the time and I wrote back and I said well we're planning on doing 600 a month my phone ran they're used to hearing from somebody who just got back from a hunting trip with their nephew and they've got four cocktails in the bag or something like that or somebody's like well I've got 5 or 10 rabbits in the farmers market and it is not worth an inspector's time to do that it's usually to say minimums in Indiana they're only going to go for 2 hours minimum so there's $48 minimum on inspection so you're only going to spend 10 minutes and then according to Hassan plans you have to sanitize then start doing the work then sanitize again before you move to anything else so it just doesn't make sense it was the volume that made it make sense that was the biggest part of it we had to promise the volume we had to do that here's where we're at on price our processor which is actually me in partnership that's the level where my business is at if you will meet the rabbit buys some of the farms and then we send it upstream into the food supply chain so we as a processor mark up a wholesale about $2 a pound so we pay I mentioned earlier $3.39 a pound dressed weight and like I said it makes it really easy to do it, hard-cost and good we pay that to the grower after having processed we get the total dressed weight we sell it for $5.99 wholesale so we tax $2 a pound if you work that mat it's about $6 a head compare that to chickens and the usual kill fees for poultry and it's pretty high we've had people really call for that number one this includes a special inspection fee number two if I'm doing chickens I usually do it all day I have one set up in the morning one clean up in the evening if I'm doing rabbits we can do a rabbit a minute if you want some stats to go talk to a team of four, four person team on the kill floor can do a rabbit a minute 60 rabbits an hour we're done with our kill in two hours we've had to start adding quail and pheasant just to make use of that minimum 22 hour inspection time yeah it's expensive the nice part for us is it's not a price competitive market I mean it's I can mention about the fresh thing when our customer is like we want it in fresh but we can't buy it anywhere else so if we were to needle on this we can get down to $5.50 or $4.50 and it makes like a $0.40 or $0.30 on our actual wholesale price it's not that price sensitive of a market price so it's over respect what your processors have in this the risk that they have in this that they're next on the line if this new meat that they've never seen before makes somebody sick that's them not you and the farmer so respect what they've got on the line whatever they tell you it's going to cost it probably will be expensive but they need to clear quite a bit for their kill floor too also think about their opportunity cost I mean like I said a four person team in an hour so that's about $360 you know minus all their costs but their alternative is I mean I buy beef off the rail you know so I know it's a $125 kill fee so they can make $360 in an hour with a four person team and they can walk out there with a $22 $125 boom drop us to you there's $125 much easier to make money on some of the larger animals so we've got to really make this make sense for the processor to allocate that kill floor to a different animal you guys I did not do handouts and I apologize so I'm going to read these off if you want to know I have no idea where these are I'm from Indiana, I'm from the out of town Hickory Hills Meats Old Village Meats Stalins Meats Ebels Butcher Shop Dick's Packing and Pleasant Valley Poultry I'm assuming you guys if you recognize one of these you'll know where they are and if you don't recognize those names they're probably nowhere near you by the way I'm not guaranteeing that these guys are in the business of this this came from the Ohio State Board of Health it's not called FOA in Ohio it's called Meats and Poultry Inspection we call it BOA over in Indiana the Ohio Board of Animal Health and Inspection Division I emailed them in advance of this presentation and asked if they had anybody under state inspection that had that was inspected to do rapid in Indiana nobody ever was in Ohio you're already ahead of the game you got six of them all this means though is that on the books they legally can they've already passed inspection for it like I said I'm not guaranteeing that they are currently in the business but they could these guys thank you sugar-free East Central Ohio but like I mentioned if you are near somewhere that is not one of these it's not impossible for a state perspective plan to get there and we'd be willing to help we have a passive plan we have SOEs that are already prepared because that's the biggest challenge and what do we do so if you go to try and help your local butcher into doing this they're going to have resistance and you're going to need to know how to talk them into it one is it's going to be profitable say look I'll pay you six bucks ahead you can clear this amount of money second is I'll help you get there you know we can get asset plans and stuff like that and aren't that hard to develop third is the cost of the equipment are pretty low we spent about a thousand dollars totally on new equipment in an existing facility and that was something called the rabbit ringer if you're not found it on YouTube this guy built it for backyard butchering and it is he's like a freelance welder or whatever and he makes these things in his garage you can buy them for $200 online and ship them to you in about six weeks and they're great we use them for the dispatching and they're basically a little tiny avatars and then we got some special shears that sheared off the hind quarters cleanly to make that bone cut clean the hind hop because that's actually very important for blank presentation when you're selling to chefs so quickly the next thing we had to do was to get the retailers profitable this became a challenge we had to quickly pivot which is what we call in the business world the fancy word is pivot the real word is call and audible that didn't work, change the plan because originally we went to all the grocery stores and butcher shops if you're thinking human consumption that's where a lot of people think first I'm going to get my rabbit at the grocery store or at the butcher shop what we discovered is that to us to them this is weird that's what we discovered and weird means I want a chef to do it for me how many of you have ever eaten calamari cook calamari in your own kitchen exactly rabbits in the same category people will order it on a menu oh that's bizarre, that's unique I did not see that before I wonder what that tastes like, I'll order that nobody's going down the grocery aisle it's going to happen so we had to quickly change our market when we ended up with the food service the culinary as simultaneous to the local food movement is the culinary movement people are becoming foodies all these millennials out there looking for purpose in life, like chefs for whatever reason I can say that because I'm technically a millennial but I do not identify that but it's a developing industry in Indianapolis we're actually behind the time Cincinnati is a very very epicurious kind of a culture there's more around so we discovered our customers were going to be chefs they're going to be chefs we sell, I'd say about 90% of our friars go into food service which means when you're going out in marketing it actually makes it a little easier to sell because a chef represents the buying power of maybe 50 dinars or so so it's a wholesale data last and real quickly I mentioned the three prongs that we tackled in our seer current the one that we had forgotten was the distributor we talked about farm, processor, retailer kind of just overlooked the fact that I don't like driving the Nashville on a weekly basis with a truckload of dead rabbits so we had to find a distributor and they're out there they're easily accessible in the food service business than they are in the retail grocery business retail grocery is a discovery with another company that we recently started where we sell frozen foods in grocery stores that's a top business food service is a little easier to get into there are existing regional food service distributors that you can find they have fleets already on the road so they have existing customers fleets on the road it makes perfect sense for them they're already stopping at chef XYZ's kitchen to sell him his tomatoes and his salt and his napkins these guys sell, they're called broad liners sometimes they sell anything that can be used in a restaurant why not also drop off a case of rabbit we found that relationship was pretty easy to develop it's going to be an important relationship if you want to scale the business because otherwise you're doing a lot of deliveries it's not outside of the realm of possibility we were going for we had to sign distributors so that's really where it started it also made the accounting really easy because the one thing about chefs you could sell to the chefs and instead of selling to 50 consumers and sell to one chef these guys are heralded by accounting they go late on their invoices all the time do COD if you're going to sell distributors we go through distributors that's their problem we have one invoice it's simplifiability alright where do we start if you're going to start and you want to do this on your farm I'm going to tell you don't start by getting your breed stock don't start by this or that start by talking to your market find your secondary market find animal rescue shelters find zoos figure out if you can get a contract with Purina or be a supplier to some pet food company aggregator basically and then start talking to restaurant tours start talking to the catering people at universities especially private universities they run a lot of alumni meetings and things like that and those guys want to be treated well they want exotic foods they've actually been a very good customer of ours talk to the food service distributors develop a market first when you go to a processor you say I want you to retool and develop a new SOP start talking here and deal with the Board of Animal Health and get a new inspection process going if you can say because I already have customers ready to buy this that helps and then finally I don't mean to I hope this doesn't sound insulting but the growing of them is actually the easy part they really like rabbits so once you have sorry once you have demand and processing you can have supply ready to go in about 90 days what is a 30 day gestation 10 weeks to market alright questions yeah so the growing of them grows for us as I kind of alluded to his farms a very differentiated farm because they are at farmers markets it's actually called Eli Creek Farm they're in Connorsville they're in some of the Cincinnati markets as well because they're so close to Ohio they're right on the Ohio Indiana border the farmer's name is John Godard and what he does is that's a really good point we talked about the ebb and flow of our supply or of our demand so if we tell them on some Friday hey on Monday we only need 40 which is kind of hardly worth his trip to the plant he'll say that's fine I'm going to kill I'm going to kill Avi then and I'm going to take 40 back to my supply because he's in farmers markets so now he's got three outlets as a farm when you can start differentiating all of your outlets that's when you can really manage our herd well and not have to constantly be slowing down your breeding to try and react to a market 12 weeks from now that makes sense so keep steady breeding going ma'am over here you had a question earlier and I cut you off did I answer it already? I was going to ask you if the shelf life from pressure habits was 7 days back packed or just like a regular that was polygon paper not back packed we do just the polygon paper instead of the back because the back packing is difficult with the bones the bones on the hind quarters chefs like I said are our main customer one of the big things that's important to chef is plate presentation not just the taste but they want plate presentation so they'll a lot of times put these up almost like a rag of land where they've got that bone taken out of the hind quarter that's why we had to invest a special shear that would cut that bone clean we didn't have bone fragments or shards coming off so there wasn't a broken bone and they get a bone saw perfect I guess I was kind of surprised that in 12 weeks to a good shirt just because of our methods are amazing they just don't seem to mature at that age they don't seem to mature in 12 months so that's 16 weeks what's your life plan in 12 weeks? I'm not sure about life but fully grasp their moving symptoms reconversion is probably trailing off there in those last few weeks you might also want to look at what kind of feed you're using to the right person to do that but if you email me I can the farmer that we buy from is very very helpful he can be glad to share what kind of mix he uses but we actually some of ours are 10 weeks they're 5.5 pound live weight they dress it out around 3 pounds that's an alt text alt text, breed very expensive genetics if you want to know my favorite that's our best breed expensive genetics very fast to market awesome white it was developed in the University of Alabama in Texas what is alt text? ALTX there are now stable hybrids that makes sense you mentioned no colored fur does that mean you're no longer accepting californian stock or do they qualify as a white rabbit? they're qualified it's all on the head no right now this is such a new market there's not really differentiation other than local versus not local it's not so specialized like the beef market or the pork market the ubiquitous product and now you're going to differentiate based on breed our big differentiation is that these rabbits are 3 pounds dressed not the Chinese rabbits that are about a pound and a half dressed and if you want to know why that is it's because Chinese rabbits are grown for fur first meets a byproduct you've got most of your surface area at 8 weeks you get your meat underneath that fur in the last 4 they kill it at 8 take the fur and we'll sell this pound and a half staying in shipping on container ships over the US secondary market for pelts very very difficult to do reason being you've got to keep it in a refrigerated barn in order to get the bulk on their fur very costly we actually don't sell our pelts our pelts go to countless in order to get the right kind of a pelt you've got to keep it in a refrigerated barn 30 seconds breaking point on these beans 200 to 300 rabbits it doesn't make sense to have them is it hard to get people to keep their operation small and then get the rabbits to come to you to have more people raising your rabbits or do they just have to get crazy because you don't have enough people who will raise rabbits it was easier for we have one primary farmer that we go to he's like the top of the chain and he came for whatever reason supply us we've got a few backups the reason is because of all these secondary markets that have to exist we didn't aggregate those secondary markets so we were only one of them and so for one farmer it's a lot of work for him to develop a contract with Purina and to have a good presence in farmer markets so it just doubles that effort when you have to have a second farmer who's able to do that the third farmer and so on our secondary farmers are actually growing for show it's a satin, pure bread pedigree and they give us the ones that wouldn't show well but I mean if I were to buy them to show rabbits they would be $100 thank you guys