A recap of the Greater Peoria Economic Development Council’s Farmer Forum, February 25, 2020, Beck’s Hybrids, El Paso, IL
What comes first, the chicken, the egg, or the processing plant? This question was posed by Cavan Sullivan of Petersburg Poultry Processing at last week’s Greater Peoria Economic Development Council’s (GPEDC) Farmer Forum. Cavan answered that question with an absolute: it’s the processing plant. If that piece of the value chain isn’t there, what would you do with all of those chickens that you raised?
Cavan grew up on a Central Illinois grain farm and started raising pheasants as part of a high school FFA project. As his pheasant operation grew beyond supplying game birds, Cavan recognized the need for a local poultry processor. By connecting his family’s grain farm to his poultry operation to their own processing facility he created a vertically integrated business.
Vertical Integration: the combination in one company of two or more stages of production normally operated by separate companies.
Vertical integration is one way that farmers can add value and reduce external costs, however, it’s not always straightforward, often takes large upfront capital investments, and isn’t necessarily cost-effective when other components of the supply chain already exist in the region. Cavan’s processing plant was built to fill a regional need beyond his own poultry operation and is operating below capacity as the rest of the value chain catches up. But this enterprise (and the meeting where Cavan was speaking) signal that there is momentum around rebuilding our regional supply chain, and in building it with the organic market as the central, driving force.
And that’s where the discussion was concentrated at the GPEDC meeting. The panel, representing multiple components along the grain supply chain, focused on the immense opportunity surrounding organic grain in our region right now. Organic fetches a higher premium while supporting our natural environment, and marketing opportunities only continue to grow. However, changing the way you farm takes work and isn’t easy. There is a learning curve, but the organic and transitional farmers in the room emphasized, “The organic community here is very supportive.” The folks that have already gone through the process of transitioning to organic are often more than willing to share their experiences with their fellow farmers.
Having trusted resources to turn to for advice and guidance is undoubtedly helpful, but it doesn’t address one major component necessary for any of this to be successful: demand. According to the Illinois Soybean Association, animal agriculture is the number one customer for Illinois soy. Meanwhile, organic livestock producers throughout the US rely on importing grains to feed their herds. And, in turn, Illinois farmers import manure and other soil amendments that could be produced in our region. So, it seems pretty obvious, right? Let’s bring all of the pieces of the organic supply chain back down to the regional and local level.
We can realize a fully integrated, regional organic supply chain. It is clear that each link in the chain represents value and opportunity, but as panelist Ryan Koory of Mercaris warned by quoting Thomas Edison, “Opportunity is missed by most people because it is dressed in overalls and looks like work.” And that sentiment is definitely true when looking at the pieces of the organic grain supply chain, there sure is a lot of opportunity, but boy does it look like work. And it is work, but it is more than worth it. The premium is there, the end-consumer demand is there, the community support is there. By becoming a part of our regional organic supply chain, farmers can not only increase their profits, they can contribute to our local economies, environments, and communities.
To find out about upcoming Greater Peoria Economic Development Council Farmer Forums, visit www.greaterpeoriaedc.org.
