Research draft. Not legal, tax or financial advice. Figures are dated to their sources; placeholder assumptions are flagged as such.
Custom-Exempt Share Sales
The rule. Custom-exempt revenue is a service fee charged to someone who already owns the animal. Any business plan line that reads like selling meat (price per pound of packaged product, a retail case, a farmers-market table) needs inspection.
What Virginia permits (VDACS OMPS guide)
| Practice | Allowed? | Condition |
|---|---|---|
| Operator sells live animal, then custom-slaughters it | Yes (Note 4) | Records show the ownership transfer |
| Several owners of one animal (halves, quarters) | Yes (Notes 15–16) | Proof of ownership; owner list exists before slaughter |
| Operator arranges purchase, slaughter, delivery as owner’s agent | Yes (Note 18) | Delivered product marked “Not for Sale” |
| Sale priced on live weight or per head | Yes (Note 17) | Not priced on the meat |
| Operator charges for the meat itself | No | Service fee only |
| Commingling trim from different owners | Yes (Note 14) | Each owner’s written consent |
| Resale or donation of the meat by the owner | No | 303.1(a)(2), VDACS criterion 6 |
Source: VDACS custom-exemptions guide.
Where the legal risk sits
- The exemption is defined by who owns the animal at slaughter, not by the facility (9 CFR 303.1).
- A share arrangement that is really a sale of packaged meat (priced per pound of cut product, shares sold after slaughter, owners not recorded in advance) becomes uninspected meat in commerce under the FMIA. Under Va. Code § 3.2-5415, a violation is a Class 1 misdemeanor, or a Class 6 felony where there is intent to defraud (Va. Code Ch. 54).
- The operator’s own owner records (303.1(b)(3)) are the paper trail an enforcement review would examine.
- Not yet sourced: FSIS guidance on what counts as genuine ownership in a share deal, and any VDACS enforcement history on beef shares. Confidence on how enforcement plays out in practice is low until those are found.
Implications for the plan [inferred]
- A custom-exempt mobile operator’s customer is usually the producer, who in turn pre-sells halves and quarters to households. The operator charges a kill fee per head, and the cut shop charges $/lb hanging weight.
- Market size is capped by how many households will buy a quarter or half at a time. Restaurant, grocery and farmers-market demand is out of reach without inspection.
- Pending law would widen this only modestly: PRIME is stalled, and the farm-bill pilot caps participation at 5 facilities per state. See Regulatory Models Compared.