White Paper

A Policy Pathway to Revive Independent Ranching and Farming in the United States

The American meat industry is experiencing unprecedented consolidation, with four companies controlling over 80 percent of beef processing and a handful of multinational firms dominating pork and poultry. This consolidation limits producer autonomy, inflates consumer prices, and erodes community food security. Meanwhile, small ranchers and farmers struggle to remain economically viable under a system that favors centralized, industrial-scale processing.

This paper examines an underutilized pathway already embedded in federal law: the 'retail exemption' and custom exemption provisions of the Federal Meat Inspection Act (FMIA). 

These exemptions permit producers to cut, package, and sell USDA-inspected carcasses or sub-primals at the retail level, including on-farm butcher shops. When coupled with SNAP/EBT retailer authorization through USDA’s Food and Nutrition Service (FNS), this model empowers producers to establish federally recognized, legally defensible on-farm markets.

Through legal analysis, economic modeling, and policy review, we demonstrate that this framework can provide ranchers and farmers with a transformative opportunity to reclaim market share, bypass industrial bottlenecks, and restore localized food systems.

1. Introduction
    
2. The Crisis in U.S. Meat Supply Chains
    
3. USDA’s Regulatory Landscape
   3.1 Federal Meat Inspection Act
   3.2 Retail Exemption
   3.3 Custom Exemption
   3.4 State Inspection and Interstate Commerce
    
4. SNAP/EBT Retailer Authorization
    
5. A New Business Model for Ranchers and Farmers
    
6. Case Study Scenarios
    
7. Economic and Social Benefits
    
8. Risks and Challenges
    
9. Implementation Roadmap
    
10. Policy Recommendations
     
11. Conclusion
     
12. References

American agriculture has long balanced two competing forces: the industrial logic of efficiency through scale, and the democratic promise of independent producers feeding local communities. Over the past 50 years, the former has eclipsed the latter. Today, a small number of multinational corporations dominate the nation’s protein supply chain. This concentration undermines producer bargaining power, threatens resilience, and erodes food sovereignty.

Yet within the regulatory architecture of the USDA lies a potential corrective mechanism. Under specific exemptions, ranchers and farmers are legally permitted to operate butcher shops and markets on their own land, provided they source USDA-inspected carcasses or subprimals. When such markets obtain SNAP/EBT authorization, they become federally integrated, enabling low-income consumers to participate and creating a strong legal footing for the operation.

This paper argues that widespread adoption of this model could decentralize the meat industry, strengthen rural economies, and provide consumers with fresher, more affordable products.

• Beef: Four packers - JBS, Tyson, Cargill, and National Beef - control over 80 percent of U.S. beef processing capacity (USDA ERS, 2022).
   
• Pork: Smithfield Foods - owned by China's WH Group, JBS, and Tyson collectively process more than two-thirds of pork, with Smithfield alone accounting for 25 percent (Greene & Cook, 2020).
   
• Poultry: The top four integrators - Tyson, Pilgrim’s Pride, Perdue, and Sanderson Farms - account for more than half of U.S. poultry output.
   

This concentration has created what economists term an oligopsony - a market where a small number of buyers (packers) control terms for many sellers (producers).

• Depressed Livestock Prices: Research shows that packer concentration correlates with lower farmgate prices for cattle and hogs (MacDonald et al., 2021).
   
• Processing Bottlenecks: Small ranchers often face 6–12 month waits to access USDA slaughter slots.
   
• Margin Capture: Producers sell live animals at commodity rates, while packers profit by cutting, branding, and retailing the meat.
   

• Higher Prices: Lack of competition allows packers to capture margin while retail prices rise.
   
• Supply Fragility: COVID-19 revealed the danger of concentration when several mega-plants closed simultaneously, disrupting national supply (Lusk et al., 2021).
   
• Reduced Access: The closure of independent butcher shops has left many communities dependent on supermarket chains.

The FMIA (21 U.S.C. §601 et seq.) mandates continuous federal inspection of meat slaughter and processing to ensure wholesomeness and prevent adulteration. However, Congress and USDA’s Food Safety and Inspection Service (FSIS) have established exemptions for retail and custom operations.

The retail exemption allows:

• Cutting, grinding, slicing, trimming, packaging, and freezing of inspected carcasses or subprimals.
   
• Sales of such meat products directly to consumers in “normal retail quantities.”
   
• Limited sales to restaurants, hotels, and institutions (≤25% of total sales, capped at annual dollar limits).
   

Key conditions:

• At least 75% of sales must be direct-to-consumer.
   
• Slaughter is not permitted under the exemption.
   
• Dollar thresholds (adjusted annually): $103,600 for meat and $74,800 for poultry (Federal Register, 2025).
   
• Labels cannot bear the USDA inspection legend but must still comply with misbranding provisions.
   

Custom slaughter facilities may process animals for their owners. The resulting product must be labeled “Not for Sale” and used exclusively by the owner, family, or household guests. While not a retail tool, the custom exemption is critical for freezer beef and direct rancher-to-household models.

• 27 states administer USDA-approved inspection programs.
   
• State-inspected meat can only be sold within that state, unless the state participates in the Cooperative Interstate Shipment (CIS) program.
   
• USDA-inspected carcasses can move freely across state lines.

The Supplemental Nutrition Assistance Program (SNAP), administered by USDA’s Food and Nutrition Service, is the nation’s largest nutrition assistance program, serving over 40 million Americans (USDA FNS, 2023).

To become an authorized SNAP retailer, a store must:

• Offer at least three varieties in each of four staple food categories (dairy, bread/cereals, meat/poultry/fish, fruits/vegetables).
   
• Stock perishable foods in at least two categories.
   
• Alternatively, demonstrate that more than 50 percent of sales are from staple foods.
   

On-farm stores with butcher counters and modest grocery selections can readily meet these criteria. Once authorized, such stores are legally integrated into the federal nutrition infrastructure, enhancing legitimacy and consumer reach.

This model proceeds through four stages:

1. Slaughter at USDA Facility – Animals are slaughtered at USDA-inspected plants; carcasses or sub-primals are transported to the farm.
    
2. On-Farm Retail Butcher Shop – Under the retail exemption, producers cut, grind, and package meat for direct consumer sale.
    
3. On-Farm Market + EBT Authorization – Producers operate farm markets that sell meat and complementary groceries, accepting EBT for inclusivity.
    
4. Local Distribution Networks – Cooperatives or private trucking collect from multiple farms and deliver to community hubs, schools, and families.
    

This structure mirrors supermarkets like Costco or Sam’s Club, which cut inspected sub-primals into retail cuts in-store. The same logic, applied on-farm, creates parity for independent producers.

A rancher in Kern County raises grass-fed beef. Animals are slaughtered at a USDA plant in California. Carcasses or Sub-primals are returned to the ranch, where a 1,200 sq. ft. butcher shop processes cuts. A farm market sells meat, local produce, and dairy. With SNAP authorization, the ranch supplies both affluent and low-income households.

Five family farms in Iowa jointly invest in a shared butcher shop. Each contributes livestock; the cooperative hires trained butchers. EBT is accepted, and delivery routes serve Des Moines suburbs. Cooperative branding emphasizes “farm family beef.”

A mixed-use farm in Vermont raises beef, poultry, and vegetables. Retail exemption rules allow on-farm meat cutting; poultry exemption (20,000 birds/year) supports direct sales. The farm store meets FNS variety requirements and secures SNAP approval.

• Increased Producer Margins: Capture retail value from each animal.
   
• Consumer Access: Lower prices, fresher product, local branding.
   
• Rural Economic Development: Job creation in butchering, retail, logistics.
   
• Food Sovereignty: Communities reclaim control from global packers.
   
• Equity: SNAP/EBT ensures inclusion of low-income households.
   
• Resilience: Distributed networks protect against supply shocks.

• Regulatory Ambiguity: FSIS interpretations vary by region.
   
• Dollar Thresholds: Exceeding exempt sales caps risks enforcement.
   
• Labeling Restrictions: No USDA inspection legend allowed.
   
• Capital Costs: Cold storage, cutting rooms, HACCP-style sanitation.
   
• State Variation: Some states enforce stricter requirements.
   
• Legal Pushback: Packers may lobby to limit exemption use.
   

• Conduct legal review with FSIS/state inspection authorities.
   
• Design facility layout (flow separation, sanitation, cold storage).
   
• Secure SNAP retailer authorization.
   
• Establish recordkeeping and traceability systems.
   
• Train staff in HACCP-style best practices.
   
• Launch pilot operation with direct consumer sales.
   
• Build cooperative logistics for broader reach.