USDA Rules Every Small Food Manufacturer Should Know

You like meat? How about a nice summer sausage? Or a frozen pepperoni pizza onto which you’ll add your own toppings? All these products were inspected by the US Department of Agriculture (USDA) before getting to you to make sure they’re safe to eat. So, if you want to be a food manufacturer that makes food with meat or poultry, you’ll be inspect by the USDA too.

In the US, if you want to start a food business and the food you make has meat or poultry, then you must work under USDA rules. With all other foods, you’ll work under the Food and Drug Administration’s (FDA) rules. And there are lots of rules. And most of them are complicated and expensive to follow.

Happily, small business are exempt from some of these rules. That’s what this article is mostly about.

Before you start this article, we recommend you first read our general overview article to get your bearings. If you make food with no meat or poultry in them, then our article on the FDA rules and exemptions is the right article for you. But if your food contains any meat or poultry, then you’re in the right place.

What Kind of Food Does the USDA Regulate?

Yes, we just said in our intro that the USDA regulates meat and poultry. However, this is just a rule of thumb. When you drill down to the details, the division of responsibility between the USDA and the FDA can get a bit confusing.

Where Does the USDA Inspection Start and End?

USDA inspections start at the slaughterhouse and end at a consumer’s table. For the food regulated by the USDA, it is the USDA and not the FDA that makes rules for, e.g. how a processing plant must be kept clean, labeling requirements, testing standards, and the like.

So, in general, if your facility makes pepperoni pizza, then the USDA will inspect that, but if you also make vegetarian pizza, then the FDA will inspect that item.

List of USDA Inspected Meats

The USDA technically inspects meat from the following animals:

• Cattle
• Calves
• Swine
• Goats
• Sheep
• Lambs
• Horses (and other equines)
• Chickens
• Turkeys
• Ducks
• Geese
• Guineas

If the animal is not on this list (e.g. deer), then the FDA, instead of USDA, inspects it. Also, all the USDA inspected meat must be used in human food. The FDA regulates pet food, so the FDA inspects pet food manufacturers. The USDA also inspects, very specifically, catfish and pasteurized unshelled eggs.

But, wait, there’s more devil in more details. For instance, the USDA inspects open-faced sandwiches but the FDA inspects closed-faced sandwiches, regardless of meat content. Except for closed-faced sandwiches for export to Canada, for which the Canadian government has asked the USDA to inspect.

Not only that, even though the USDA doesn’t inspect certain types of meat like bison, you can still voluntarily ask the USDA (instead of the FDA) to make inspections. You’ll have to agree to pay for the inspector’s time, however.

So, everything is clear as mud, right? Our recommendation is, if in doubt, contact the USDA or the FDA to ask which one of these agencies will inspect your product. Start your research by asking USDA’s FSIS program.

What is FSIS?

FSIS stands for Food Safety and Inspection Service. It is an arm of USDA that inspects all meat, poultry, and various egg-products. FSIS inspectors, along with FDA inspectors and state inspectors, ensure the safety of the food supply in the US.

So, if you plan to start a food manufacturing company that makes products with meat, poultry, unshelled eggs, or catfish, sooner or later, you’ll be working with FSIS or under FSIS rules.

What Types of Food Manufacturing Activities are Regulated by the USDA through FSIS?

The USDA and the FDA have similar food-related responsibilities but for different food products. So, in the US, there are basically two sets of rules for, for example, food manufacturing facility registration or food labeling. Which one your business must follow depends on whether you’re regulated by the USDA or the FDA.

If your food company falls under USDA’s responsibility, then you look to FSIS for rules and regulations to follow.

Generally, FSIS is responsible for:

• Making sure meat and poultry processing plants meet food safety standards (through on site inspections)
• Making sure livestock are slaughtered in a humane manner
• Drafting guidelines for safe meat and poultry processing
• Helping small businesses comply with the laws, rules, and guidelines
• Working with other agencies such as the FDA and state inspection agencies on all of the above

Some of the guidelines FSIS has drafted to help food manufacturing businesses include:

• Food labeling guide
• Various HACCP models for meat or poultry processing
• Various HACCP models for meat or poultry slaughterhouse
• Models for controlling different types of bacterial growth for meat and poultry
• Food safety and sanitation standards
• Meat and poultry hazards and controls guide
• “At Least Equal To” guideline for state meat and poultry inspection programs

Follow the link for a complete list of FSIS guidelines.

How Does the USDA Help Small Food Manufacturers With its Rules?

In general, USDA food-related rules and regulations are stricter than FDA food-related rules and regulations. This makes sense because meat and poultry are more likely to be contaminated with harmful bacteria.

So, small food companies inspected by the USDA typically must invest more time and money to comply with the food rules and regulations. However, the USDA does give small businesses some help.

Who Qualifies as an USDA Small Business?

Believe it or not, defining what is a small or very small business can get quite tricky under federal law. Typically, you have to have 500 employees or less, but different laws can expand or restrict this definition.

For laws related to USDA food regulations, small and very small businesses are defined as:

• Small Business: A business with 10-499 employees
• Very Small Business: A business with less than 10 employees or less than $2.5 million in annual sales

But exceptions exist. For example, a small business that is exempt from Nutrition Label under the USDA labeling rules is defined as (see p. 62 of the document):

A business with 500 or less employees and processes 100,000 lbs. or less of meat per year per each formula.

For example, if you make pork tamales and beef tamales, you’re making two products under two different formulas. So, as long as you stay under 500 employees, even if you use 99,999 lbs. of pork and 99,999 lbs. of beef every year, you’re still a small business under Nutrition Label regulations.

Education Programs for Small Food Manufacturers

Under FSIS rules, every USDA inspected plant has to be built in a certain way and to follow a food hazard reduction process called HACCP, which stands for Hazard Analysis Critical Control Point. The USDA doesn’t seem to give small businesses a break in the strictness of its requirements, but it does try to give small businesses a lot of help.

For example, FSIS understands that not every small business has a food scientist on staff and can help the small business set up a HACCP program. So, it has developed not only a generic guide on how to develop a HACCP program but also several model HACCP programs for small food manufacturers of different types (e.g. beef slaughterhouses, beef jerky makers, pork sausage makers).

In addition, it also has a guide on how to set up a recall program (which is required under the law). It has even set up a Small Plant Help Desk to answer questions and give additional help to small businesses.

You can find all these resources on this FSIS page.

Coordination with State Inspection Programs

The readers of this website probably all fit under USDA’s definition for small or very small business. As a small business with a limited number of employees, you’re probably selling your meat or poultry products only inside your state lines. If this is true for you, then you qualify for a small food manufacturer program where your state inspectors, instead of USDA inspectors, inspect your facility. This program is called the Meat and Poultry Inspection (MPI) program.

Usually, the MPI program inspectors give small food companies a lot more help than large companies. MPI inspectors are supposed to slowly bring the small food manufacturers into compliance with the full USDA regulations as the small processor grows.

Not every state has its own MPI program. Here’s the USDA page listing states with and without MPI programs. If your state doesn’t have an MPI program, then you will have to follow the full USDA rules unless specifically exempt.

Usually, food inspected under a state’s MPI program can only be sold inside that state. But, some states have an additional agreement with the USDA so that small food companies they inspect can indeed ship their products to other states. This program is called the Cooperative Interstate Shipping (CIS) program, and, right now, it’s available in only a handful of states.

For FSIS’s general information page about state inspection programs, look here.

Food Labeling Regulations for Small Food Companies

As already mentioned above, small food manufacturers do get some help with food labeling laws. If you are a small business under the USDA’s labeling regulations (less than 500 employees and processing less than 100,000 lbs. of meat per formula per year), then you are exempt from Nutrition Facts labeling requirements.

This is an important exemption because Nutrition Facts label can be expensive to make. To get the most accurate information, you’d have to send your food to an approved commercial lab to test the food. If you make several products, the lab fees can get expensive. You might be able to pay less if you use commercial databases to build your Nutrition Facts label, but the fees are probably still expensive too.

Even if you’re exempt, you can still add a Nutrition Facts label on your food packaging, maybe to show that your product is made with healthy ingredients. In that case, know that the USDA keeps a free database of nutrition information. The data might be a little complicated and difficult to use for someone who isn’t a food scientist, dietitian, or similar, but it is free.

Other than the Nutrition Facts label, small food manufacturers are not exempt from the USDA food labeling regulations. But, to help small businesses comply, the USDA does have a very helpful guide on food labeling, written in plain English. You can find the guide here.

There are Other Ways a Food Manufacturer Can Sell Food with Meat or Poultry

If your business idea involves selling food with meat or poultry and if, after reading this article, the whole process seems too daunting, don’t lose heart. Starting a business is not supposed to be easy, and you’re allowed to build from small to large.

If you don’t think you have the funds (or maybe the customer base) for a commercial food facility, maybe you can start with a restaurant. The USDA doesn’t inspect restaurants. Test your food on your real customers and build a following. Then, when you have enough saved, it should be fairly easy to convert a restaurant grade commercial kitchen into a processing kitchen that can pass USDA inspections.

So, if you truly believe in your product, it’s absolutely possible to start a meat or poultry processing business without investing a ton of money upfront.

Interested in starting and running a small business? Here’s the beginning of our step-by-step guide: What to do right after getting that great business idea.

DISCLAIMER: This article does not constitute legal or accounting advice. Instead, it contains general information. The information gives you the background you’ll need to hit the ground running when you do go get advice from a lawyer or accountant. Only lawyers and accountants properly licensed in your state/country are qualified to give you legal or accounting advice.