SPEARFISH – On Jan. 28, U.S. Rep Dusty Johnson, R-S.D., introduced the Direct Interstate Retail Exemption for Certain Transactions (DIRECT) Act to Congress, which would attempt to allow state inspected meat to be sold online to consumers across state lines.
“Today, a few large players have too much control over our meat supply chains. In many states, state meat inspection is every bit as good as federal meat inspection,” said Johnson. “The DIRECT Act would unlock the entrepreneurship of state-inspected processors without compromising food safety.”
Johnson introduced the act during the last Congressional session, but said it was a little too late to gain the footing it needed to pass.
“It started to gain momentum at the end of last Congress; we ran out of time so this is really our attempt to continue to build on that momentum,” he said.
Johnson is joined by Rep Henry Cuellar, D-Texas, which Johnson said should give the bill a better bipartisan chance.
“With democrats controlling the house and the senate, bipartisan legislation has the best chance of passage,” Johnson told the pioneer Wednesday. “That’s why we’re so proud to have Henry Cueller … be our lead democrat.”
“The bipartisan legislation will allow meat inspected by the state to be sold online and across state lines, opening up new markets for meat producers and processors,” Cuellar added. “As a senior member of the Agriculture Subcommittee on Appropriations, I will continue to provide the necessary support to the meat industry so they are able to make it through this crisis and continue to be an integral part of feeding American families.”
The House Resolution, 547, would amend the retail exemption under the Federal Meat Inspection and Poultry Products Inspection Acts to allow processors, butchers or other retailers to sell “normal retail quantities” (300 pounds of beef, 100 pounds of pork, 27.5 pounds of lamb) of state inspected meat online to consumers across state lines.
“That’s done for a specific purpose. It’s so that that state inspected meat wouldn’t be able to enter our export market,” explained Eric Jennings, Spearfish rancher and president of the South Dakota Cattlemen’s Association. “We wanted to make sure that there was no chance of that state inspected meat getting into a box of meat destined for a foreign country.”
Jennings said keeping the poundage of meat so low would help keep quantities manageable so as to avoid large quantities find their way into export shipments, which could be used to break foreign trade agreements.
“Right now as it is, only federal inspected plants are allowed to sell meat interstate, meaning South Dakota selling meat into Minnesota or Colorado,” Red Water rancher, and president of the Spearfish livestock Association Aaron Thompson said. “What the DIRECT Act would do is allow state inspected plants to access those same markets.”
Thompson said many small processing plants in South Dakota are held to the same exacting standards as federally inspected plants.
“So it’s frustrating that we’re at the same level of food safety, and yet we’re not able to cross that bridge into the consumer realm,” he said.
“It’s ridiculous that I can send meat 340 miles east, but I can’t send it eight miles west,” Jennings added.
Jennings said, the federal inspection laws also allow for sold meat to be tracked across the country, which is something the DIRECT Act seeks to address at the state level and serves as another reason for the limitations on quantity.
“In the federal inspection system, there is a protocol there that if the meat has any kind of a safety problem, they can track that meat very quickly to the source,” he explained. “It’s a little tougher to do with state inspected meat, so through internet sales, it allows that possibility because you can track the meat back through the online connections.”
“A lot of people want a more open meat market,” Johnson said. “Our bill strikes the right balance in opening that market up while still maintaining an easy ability to be able to respond to food safety issues.”
With so few federally inspected plants in South Dakota, Jennings said opening up the opportunity for state inspected plants to sell products across state lines should help keep more of the money generated by the cattle industry in South Dakota.
“South Dakota is very good at selling commodity wholesale products – raw products,” he said. “We need to do a far better job of processing and generating more jobs and more dollars in state.”
Jennings said that when a cow is sold to a feedlot, many times, those feedlots are out of state. Once the animal is ready to be processed, it has the potential to have almost doubled in value, with those dollars contributing to economies outside of South Dakota.
“Those dollars are all being moved to a different state. So the more value we can add to cattle in South Dakota the more it’s going to impact our local economies,” he said.
In an effort to reclaim more control over how and where their beef is sold from the large out-of-state processers, many small ranchers, like Thompson, are entering into the direct to consumer market.
“There’s still going to be a lot of calves that go through the sale barn that end up getting trucked to (the feedlots) and then get processed in the big plants. That isn’t going to go away. But (this) would provide the ability for people that want to source their protein differently,” Thompson said.
As the desire from consumers to shop locally grows, so too does the need to be able to get local food to consumers.
“If you live in Florida you’re going to get awfully sick of oranges, and if you live in Idaho, you’re going to get sick of potatoes,” Thompson said. “We need to be able to get our product into the metropolitan areas.”
It’s not just the ranchers who should see an uptick in profit margins with the DIRECT Act. Since the COVID-19 pandemic began, small local butcher shops have been inundated with orders to fill from ranchers like Thompson and Jennings to have their animals processed for sale throughout the state. Opening the doors to other states will only increase that business when larger processing plants closed, or slowed their production.
“Right now the processors have more business then they can get to. If I try to get a beef in to butcher, if I called today it could sure take close to a year to get it in,” Jennings said.
“A lot of these shops can run 24 hours a day, they’ve got lights, but they can’t find people to run them for eight-hours a day hardly,” Thompson added. “That’s a tough job. … It’s a factory job basically, so it’s not for everybody.”
As the demand for more and more skilled processor jobs grows, Jennings said that could have a trickle-down economic effect throughout the state.
“I think that much demand will stimulate more processing plants to come online, and some expansion,” he said. “Also working on some education training to get more labor into the plants. As those plants ramp up production they will be able to handle more meat that the ranchers are selling that needs to get processed. It’s definitely a trickle-down deal.”
With the cattle industry still very much a part of South Dakota’s economic structure, the DIRECT Act provides a clear path of growth and prosperity for our state.
“We have a lot of cattle in South Dakota. Cows outnumber people five to one, so we have a lot of commodities that we can market but a limited population,” Jennings said. “So being able to cross the state lines with state inspected meat on an ecommerce just expands our customer base exponentially.”
To look up House Resolution 547, visit www.congress.gov. To contact Johnson’s Rapid City office, call (605) 646-6454, for his Washington D.C. office, call (202) 225-2801. For more information about the South Dakota Cattlemen’s Association, visit www.sdcattlemen.org. For more information on the Spearfish Livestock Association, visit www.spearfishlivestockassociation.org.
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