What does “retail exempt” mean and how does it work? Retail exempt status is what makes in-store meat cutting, whether it be at a large chain grocery store or at a mom-and-pop butcher shop, possible.In effect, they are exempt from USDA inspection during processing. Make no mistake, however, that the meat being cut or processed is still from an animal slaughtered under USDA inspection.
This is how the Penn State Meat Market operates, which is a retail food establishment registered with the Pennsylvania Department of Agriculture (check with your state Department of Ag, Public Health, or similar overseeing organization for what’s required of your business). We are no different from any other small town butcher shop or grocery store that features a full-service meat counter. Our market is served by our slaughterhouse, and all associated activities with the slaughtering part of the business are conducted under USDA-FSIS inspection. Meat from those animals could be sold to anyone (because it bears the mark of inspection), yet we keep it and sell it at our Friday sale. The only further processed product we make under USDA inspection is summer sausage, and that is because we sell it in places other than our own little market.
What a butcher shop operating under retail exempt status can and cannot do are clearly spelled out. Such a business cannot:
- Sell to wholesalers or distributors
- Sell to other retail markets (more on this one below)
- Slaughter without Federal inspection
- Can meat without Federal inspection
The primary function of a retail exempt operation is to sell fresh (or frozen) meat to the general public for household use. It is spelled out how much one purchase can be — and I have no idea how on Earth the numbers for what constitutes a “normal” amount is determined. Any given customer cannot purchase (by species) more than these “normal” amounts at one time:
- 300 lbs. – cattle
- 100 lbs. – swine
- 37.5 lbs. – calves
- 27.5 lbs. – sheep
- 25 lbs. – goat
In addition to selling to consumers for household use, retail exempt operations can also sell meat to foodservice operations such as restaurants and caterers, provided that:
- They only fresh products (no cured or cooked products, i.e. bacon, ham)
- Total foodservice sales don’t exceed 25% of the retail exempt operations total yearly sales
- The total sales value to food service does not exceed $60,200 for meat and $50,200 for poultry (this value is updated annually)
Recently I got wind of an outfit not far from my house that was not operating according to the guidances provided by USDA (and listed above). In short, half of that business activity was legal, and the other half wasn’t. It was purchasing meat from a USDA inspected slaughterer and the meat featured the mark of inspection when purchased by the small butcher shop. That shop could cut and sell those products in the store and everything was peachy. I even think they had a small catering business. But uh-oh, they turned around and sold fresh meats to another retailer in the next town over. The chain of custody became too long and they got into trouble… And I question whether or not they knew that what they were doing was illegal. Now you know more about what a mom-and-pop butcher shop can and cannot do.
Next up: selling game meats.