Missouri pork co-op thriving

By Marilyn Bay Wentz

When the price of hogs hit 7 cents per pound in December 1998, Russ Kremer decided to quit hitting his head against a brick wall. Instead, he determined to find a way to scale the wall. Shortly thereafter, he helped organize several farmer rallies to protest dismal hog prices and the declining rural economy.

In his efforts to raise awareness of the problem and to find a solution, he met then National Farmers Union (NFU) President Leland Swenson. While attending the 1999 NFU Convention in Springfield, Ill., Kremer felt that Farmers Union would provide a structure and support for many of the things he was trying to accomplish.

“I liked the legislative activism and the opportunities provided by farmer-owned cooperatives. It seemed like the perfect fit for what we were trying to accomplish,” Kremer said.

Kremer immediately went to work to organize the Missouri Farmers Union, which received its charter in 2002. He also went to work organizing his pork producing members into a cooperative.

By the fall of 2001, Ozark Mountain Pork Cooperative had been established. By the following January, the group had raised $790,000 and purchased a pig processing facility in the small, rural town of Mountain View, Mo.

The co-op then began working with the same advertising agency that created the Energizer Bunny commercials.
“The agency owner approached us, as we were in no position to spend a lot of money on advertising and image development,” Kremer said. “They expressed a desire to help family farmers at a discounted rate.”

The agency created the Heritage Acres label, under which the co-op’s fresh and processed pork are marketed. Shortly thereafter, the Missouri Grocers Association, comprised of the state’s independent grocery stores, endorsed Heritage Acres. The association told the co-op it wanted the Heritage Acres pork in order to distinguish their members’ grocery stores from the large national or international chains.

“Currently, about 320 stores belonging to the Missouri Grocers Association carry Heritage Acre pork products,” Kremer said. “This partnership is crucial to our success. They waived slotting fees and even came to advise us on how best to package and present our product to the consumer.”

The Heritage Acres brand got another shot in the arm when they became the first to have the Missouri Pride seal, a designation for products originating within Missouri. The Missouri Pride label is being tracked by a committee with representatives from the agricultural community, academia, and the Missouri Department of Agriculture. Once established, producers of other Missouri products will be able to apply to have the label on their foods.

The Ozark Mountain Pork Cooperative today employs 35 people at its plants, where it processes 300 hogs per week. All its workers are union members, and their training and salaries are above industry standards.

“Another very, very important partnership for this co-op has been labor unions,” said Kremer. “From the beginning, we set out to improve the economy and employment opportunities in the community where our processing facility is located. We insisted on having a labor union for the employees.”

The philosophy of the co-op’s member owners has been to raise the income of all associated with the plant, including the hog producers, the plant employees, and employees at the grocery stores where the pork is sold. As a result, union members and their families and friends are the largest segment of buyers of the co-op’s pork products.

“It’s all about relationships and establishment of a local, or fairly local, community food system,” said Kremer.

Producer members must raise their pigs in accordance with American Humane Society guidelines, which includes production practices such as access to open space, farrowing on straw or dirt rather than on cement slabs, and no crate housing. The pigs are not given artificial hormones, animal byproducts or sub-therapeutic antibiotics. The meat is processed using natural seasonings and natural (rather than chemical) smoking. In addition, the co-op requires pigs that are all or part traditional breeds, such as Tamworth.

“We’re not raising ‘The Other White Meat’ promoted by the National Pork Producers Council,” Kremer said. “This is a juicier, marbled meat, perhaps more like the pork our grandparents ate.”

For their efforts, producers receive about a 10 percent premium over the commercial market price. So far, the co-op has been unable to pay patronage dividends to its members. The goal is to begin doing so this August.

Another problem often faced by small, farmer-owned marketing co-ops is a steady supply of product. Kremer says this has not been a problem for the Ozark Mountain Pork Cooperative, perhaps due, in part, to the fact that pigs farrow year round.

The co-op recently completed an equity drive, raising $450,000 in just two weeks. The money will go to marketing, improving plant technology and purchasing equipment, and costs associated with expansion. The next step is to promote Heritage Acres Pork to the restaurant sector. According to Kremer, the co-op actually had to turn down some potential co-op members so that it does not expand beyond what it is able to process and sell.

Partial funding for start-up of the Ozark Mountain Pork Cooperative was provided through a U.S. Department of Agriculture Rural Development grant administered by the Missouri Farmers Union Family Farm Opportunity Center, a parallel organization to the Rocky Mountain Farmers Union (RMFU) Cooperative Development Center.

“This co-op has been successful due to its addressing the three areas that generally trouble start-up cooperatives,” said Robert Mailander, director of the RMFU Cooperative Development Center. “It acquired several key partnerships with organizations having the same philosophy, and it hired experienced management. Now that it is ready to expand, it is going at a sensible rate and raising the capital needed to do so.”

Mailander shares Kremer’s goal of helping producers establish marketing co-ops that will enable them to support a family on a moderately-sized and capitalized farm or ranch. The average producer-member of the Ozark Mountain Pork Cooperative has 50-75 sows and markets 1,000-1,200 hogs per year.

“We commend our Missouri colleagues for the fine job they are doing in returning value to producers and for doing so in a way that also adds value to the plant’s employees and their community,” Mailander said.