Falk, Constance L.

English

Research Papers in Economics

Feasibility of Operating a Small Scale Kill Floor,
Specialty Butcher Shop, and Freezer and Cold Storage
In Northern New Mexico
by
Constance L. Falk
Assistant Professor
Department of Agricultural Economics and Agricultural Business
New Mexico State University
This project will assess the feasibility of
operating a small-scale organic lamb kill floor,
butcher shop, and cold storage and freezer facility
in southern New Mexico for Ganados del Vane,
a non-profit economic development organization
that works with low-income Hispanic and Native
Americans, Specifically, the research is focusing
on identi~ing a feasible facility size and estimat-
ing investment and operating costs. A manage-
ment information system (MIS) is also being
designed.
Ganados markets lamb direct to consumers
and gourmet upscale restaurants in Taos, Santa
Fe, and Albuquerque. Three breeds of lamb are
marketed in a variety of gourmet cuts and speci-
alty sausages, as well as carcasses. One breed is
the rare 400-yeardd Churro breed, which pro-
duces a distinctive flavored meat and long fiber
wool that Ganados uses in a successful weaving
project. The USDA recently certified inspection
and marketing of the Churro breed, and the lamb
is certified organic by the Organic Crop Improve-
ment Association. Another breed is the Middle
Eastern Karakul.
This USDA-AMS fimded project is needed
because Ganados has had quality control problems
with the slaughtering/processing plants that have
contracted to do the work the past two years. In
addition, high marketing costs result from trans-
porting the animals to be processed (from Los
Ojos to Farmington or El Rite), to where the meat
is stored (Albuquerque) and to the markets (Santa
Fe and Taos). The travel time and coordination
challenges of the current organization have
resulted in high marketing costs, limited produc-
tion and inconsistent quality.
One of the biggest challenges facing
Ganados is seasonality of lamb production. Like
most western lamb producers, Ganados has lambs
ready for sale primarily in the fall. Operating a
lamb facility implies year round access to lambs
or other animals to keep the plant in operation.
The MIS system will allow Ganados to
associate revenues and quality characteristics of
individual animals to the owners. The model will
improve the link between revenues earned in the
market and incentives paid to producers. Part of
Ganados’s function is to train producers in mod-
ern breeding and management practices and to
reward top performers with market-based incen-
tives. In addition, the system will enable Ganados
to take orders early in the season; estimate how
many animals will be needed to fill those orders;
estimate profitability of different market segments
and customers; bill the customers; and compare
budgeted with actual financial performance. This
model should also be helpful to other lamb mar-
keting cooperatives that are trying to bypass con-
ventional marketing systems in eastern states such
as Virginia, New York, and Vermont.
Journal of Food Distribution Research February 92/page 159

FEASIBILITY OF OPERATING A SMALL SCALE KILL FLOOR, SPECIALTY BUTCHER SHOP, AND FREEZER AND COLD STORAGE IN NORTHERN NEW MEXICO

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Research Papers in Economics