The processing of livestock- which includes animals such as cattle, sheep, swine, and goats- is governed on a national level by the Federal Meat Inspection Act.  USDA-FSIS is given primary authority for oversight of meat products that will be offered for sale.  One of the main components of that oversight is the requirement that the slaughter of livestock and processing of meat products be subject to continuous inspection by government inspectors.

Inspection Authority

That authority, however, may be designated to a state agency in those states that chose to apply for such authority, as long as the state requirements are “at least equal to” those enforced by USDA-FSIS.  State inspection programs operate under a cooperative agreement with FSIS, and facilities in states with state inspection can choose between FSIS or state inspection.  The difference between the two approaches is that state inspection programs only allow for meat processed in these facilities to be sold within the state- “intrastate”- while FSIS inspected facilities can export meat to other states, or “interstate.”

The slaughter and processing of livestock and poultry for the use of the owner, their household, guests or their employees, commonly called “custom exempt,” are exceptions to the typical inspection requirements.  In practice, producers may sell portions of an animal (ex: 1/4 steer, 1/2 hog) to several consumers while the animal is still alive.  At that point, the consumers become co-owners of that animal, and once the animal is completely sold the producer acts as an agent to arrange transportation to the slaughter and processing facility. Each individual consumer/owner is then responsible for choosing how the animal should be processed, as well as paying both the producer (for the animal) and the processing facility (for the processing).  Products that have been slaughtered and processed based on custom exempt guidelines may not be sold or donated.

There has never been a specific FSIS regulation outlining exactly how many “owners” of an animal are permitted, while still falling under the custom exempt exception.  For example, can a consumer be the owner of two ribeye steaks and 10 pounds of what will be turned into hamburger meat?  Or is the exemption limited only to larger quantities, like the above-mentioned 1/4 of a 1300 pound steer that will turn into almost 150 pounds of freezer beef?

State Definitions

In 2020, Wyoming passed a law expanding the definition of “owner” to include herd shares, or smaller portions of the animal.  Specifically, Wyoming defines “animal share” as “an ownership interest in an animal or herd of animals created by a written contract between an informed end consumer and a farmer or rancher that includes a bill of sale to the consumer for an ownership interest in the animal or herd and a boarding provision under which the consumer boards the animal or herd with the farmer or rancher for care and processing and the consumer is entitled to receive a share of meat from the animal or herd.”  There is no limitation on size of the share or number of owners that a specific animal may have.

This was the first law or regulation defining (or expanding) the purchase amount of what is required for the custom-exempt category of slaughter. Since then, Colorado (SB 79; HB 1062) and Nebraska (LB 324) have considered and passed similar bills.  Nebraska defines “animal share” similarly to Wyoming- it does not include a specific number of owners.  However, Colorado’s law defines an animal share as including at least one percent of a live animal, so potentially up to 100 owners per animal.  Since the definition of “animal” in Colorado’s statue includes everything from cattle to rabbits, very small quantities of meat are potentially permitted to be slaughtered under the custom exempt provision.

In the 2021 legislative session, numerous other states considered similar legislation, but it did not pass.  This includes Arkansas (HB 1681), Iowa (HF 567; HF 319), Minnesota (SF 1941), New Mexico (SB 118), Oregon (HB 2258) and Texas (SB 857).

Ultimately, FSIS has regulatory authority to control definitions of “custom exempt” or other terms, but has not yet chosen to do so through the notice-and-comment rulemaking process.  However, FSIS believes that herd-share type arrangements are a violation of the current custom exempt process, as described in a letter sent to the directors of state inspection programs in 2017.  In it, FSIS pointed to state legislation that it believed to be inconsistent with federal requirements, including “legislation that would permit the slaughtering of livestock and direct sale of meat to consumers who are members of a “herd share” or similar organization that might, in turn, resell the meat. Such a provision would not be permitted under the FMIA’s custom slaughter exemption provisions, because it does not limit the sale of the livestock to consumers for their personal use.”


Some further regulatory action might be under consideration.  The National Advisory Committee on Meat and Poultry Inspection (“NACMPI”) advises the Secretary of Agriculture on matters affecting federal and state inspection program activities, and considered the question at its September 2021 meeting.  The report, found here, details its findings.

The first question posed to NACMPI was whether FSIS should conduct rulemaking that would set a specific number of co-owners permitted under custom exempt slaughter.  While there was no consensus on whether a limit should be proposed, the Committee recommended that the definition of an “owner” could include “collectively owned membership organizations or firms.”  Further, the committee believes that FSIS should focus instead on “robust record keeping and traceability requirements for custom operators.”

The second question posed was whether “FSIS conduct rulemaking to clarify that collectively-owned membership organizations or other firms cannot “own” animals for purposes of the custom exemption?”  Instead, the Committee believes that “FSIS should clarify (by an appropriate regulatory mechanism) that collectively owned membership organizations or other firms can ‘own’ animals for purposes of the custom exemption provided records are maintained that all receivers of product were owners of the animal before slaughter.”  And again, the suggestion was made that the focus should instead be on recordkeeping.

NACMPI’s suggestions are not binding on FSIS.  We may see them adopted in whole, in part, or not at all.  Regardless of the eventual outcome, this signifies that FSIS is aware of the state interest in these types of provisions, and it is reasonable to expect some agency action further defining the limits or requirements for this type of slaughter.



Slaughter and Processing in the United States: Oversight and Requirements (Webinar 2020; E. Rumley & E. Rumley)

Focus on Food: Legislation That Would Change Meat Processing (Webinar 2020); E. Rumley)

Meat Processing Laws: A State Compilation