Small Town Niche Operations Adapt to Shifting Markets

While the coronavirus pandemic ravaged the global economy, the repercussion carved into rural America was its own animal. Advocates say unemployment, mental health and food security issues hammered many areas already in the midst of long-term decline.

Dr. Chad Hart/Extension Ag Economist/Iowa State University: “When we look here in Iowa, we have seen a population drain, especially over the past 40 years.  And we’ve also been watching that drain, not only from a statewide perspective, but within the state.  We have seen our rural communities getting smaller, and our urban and suburban communities are where we’ve seen tremendous growth.”

 Dr. Chad Hart is an Agricultural Economist at Iowa State University.  He worked the family meat locker back home in southwest Missouri – and says the sticker-shock of hefty retail prices back in 2020, due to COVID hobbled workforces at corporate packing plants, revealed an edge for nimble operations like where he grew up.

Dr. Chad Hart/Extension Ag Economist/Iowa State University: “When you go into your big grocery stores, everything is pre-packaged.  You’re sort of buying what they want you to buy – whereas, when you’re working with a small meat locker, often times, you can custom order.  It’s like – ok, you want your steaks how thick?  You want your hamburger in half pound, pound, two-pound packages?  That’s something that a smaller business does have some more agility to do.”

Last spring, the Biden Administration announced a roughly $1 billion investment to help strengthen meat supply chains.  A lame duck Congress and the White House followed up early this year with millions more to stir competition and boost more small processors.

Dr. Chad Hart/Extension Ag Economist/Iowa State University: “Every move that the government makes has some trade-off to it.”

Hart says rural businesses should build on pandemic-related momentum because urban centers offer more goods at lower prices to consumers accustomed to driving long distances.

Josh Dreps/Co-Owner/City Meat Market: “We make everything homemade, fresh.  There’s not too many places like this anymore, really. We still do it the old-fashioned, hard way.”

Some have turned that exodus on its head for decades, drawing an array of customers by focusing on value-added niche markets.

Josh Dreps/Co-Owner/City Meat Market: “Between fresh cut steaks, and counter lunchmeats, and different kinds of sausages… bacon, jerky…I would say we are probably pushing 2000 pounds a week.”

Josh Dreps is a 6th generation co-owner of City Meat Market in New Albin, Iowa.   Grocery and other businesses have closed shop here over the years as distributor favor drifted to nearby La Crosse, Wisconsin.  Drep’s family store, in operation since 1882, has endeavored to plug some of those food-related gaps, while diversifying their traditional meat offerings which have captivated carnivores for generations. 

Josh Dreps/Co-Owner/City Meat Market/New Albin, Iowa: “Word of mouth has really helped.  I would say that’s our greatest advertisement.  It’s a dad that brings the son in, and then his son comes back with his dad in a wheelchair, and he’s bringing his grandson along, but, you know, a lot of times there’s people that we’ve never seen before, and uh…What brings you here?  Oh, nothing, we just heard that this was a good place to come, so we decided to make a day trip, so, you know, we get people from all around.  We’re still sending packages from Florida to Texas, Washington…everywhere in between.”

2020 U.S. Census data confirms Professor Hart’s rural flight claims, which he adds can result in small towns competing with each other for more scarce consumer dollars.

Dr. Chad Hart/Extension Ag Economist/Iowa State University: “The locker plants that have survived up to this point, often times aren’t just locker plants by themselves.  They are doing something else that’s helping draw those customers and keep those customers with them for the long haul.”

Roger Meirick/Co-Owner – Elma Locker and Grocery/Elma, Iowa: “The backlog is tough.  I mean, we’re booked out almost through 2024...try to leave a little room for some that we missed or people forgot…The quarters and halves and whole beef…lotta different people buying them now that never did before.  It got big.”

Elma Locker and Grocery in Elma, Iowa has bucked the trend as well.  Co-Owner Roger Meirick says business has skyrocketed since 2020, but input shortages and rising labor costs have ridden shotgun.  His skilled crew motors through some 20 head of cattle and 30 hogs per week, along with seasonal wild game.

Roger Meirick/Co-Owner – Elma Locker and Grocery/Elma, Iowa: “Good Iowa cornfed beef, good burger…It’s just tough to book beef two years in advance and you still don’t even have the bull bought yet.”

Some fifteen years ago, a previous locker and separate grocery store folded, so Meirick left a good job with a local co-op to partner up in offering both essential food businesses under one roof.  The community has supported them through the Great Recession, COVID and inflation.

Roger Meirick/Co-Owner – Elma Locker and Grocery/Elma, Iowa: “Groceries are 30…40 percent higher.  In a little store like this, it’s a little bit tougher for us to get our volume and low prices.  Profit margins are pretty low on the grocery because we’re probably a little higher to start with.”

Traditionally, meat locker market advantage lies in affordable bulk meat prices driven through multi-party client deals. 

Both Elma and New Albin have gone against the grain – slowing population losses to a drip over the past decade.  Observers claim such novel approaches could help stoke more resilient main streets elsewhere, but many scratch their head about what the future holds.

Dr. Chad Hart/Extension Ag Economist/Iowa State University: “The virus changed a lot of things for folks, and we’re trying to figure out which changes are going to stick with us in the long run, and which changes are going to fade away.  Are consumers willing to deal with less choice, possibly higher cost, in order to keep that local business viable and running?   Or, will we fall back and say, no, we like the convenience of buying from those regional centers or buying online and having that brought to us.”

For Market to Market, I’m Josh Buettner.