The US Department of Agriculture’s Food Safety Inspection Service (FSIS) recently released a new guideline in an effort to clarify whether or not a firm is exempt from the inspection requirements under the Federal Meat Inspection Act (FMIA). A copy of the guideline can be found here.
The guideline is effective immediately; however, FSIS provided the public 60 days to comment on the proposed rule, which closes on Monday, July 24, 2018. Anyone can submit their comments online here.
The new FSIS guideline specifies criteria and notes for familiar exemptions under traditional business models, such as livestock slaughtered for personal use, custom slaughtered or prepared livestock, retail stores, restaurants, central kitchen facilities, and caterers. As discussed in further detail below, the document essentially codifies established agency practice.
However, the new FSIS guideline provides beneficial insight for persons operating businesses particularly where the FMIA or applicable regulations have been unclear as to whether an inspection exemption applies, particularly with new and emerging food business models. Below we have highlighted many of these emerging entities addressed in the new FSIS guideline and FSIS’ stated positions:
1. Farmers Markets
Farmers markets have become increasingly common, whereby farmers can bring their own booth or table and sell meat food products directly to consumers in an open retail setting. The FSIS guideline exempts farmers’ markets from continuous inspection; however, livestock meat food products must be prepared from an inspected source and FSIS may conduct reviews of booths selling meat food products at these locations. Packaged meats must still contain required labeling information.
2. Food Hubs
A food hub manages the distribution and marketing of meat food products, assisting meat food producers in quickly and efficiently getting their product to market. The FSIS guideline exempts food hubs from inspection, so long as they receive meat food product in intact packages from an inspected establishment and the food hub registers as a meat food handler with USDA. It should be noted food hubs cannot prepare food as that term is defined in 9 CFR § 301.2.
Farm-to-school initiatives allow meat food producers to bring their meat food product into school cafeterias. Farm-to-school programs can further process and supply meat food products and are exempt from inspection so long as the meat food products have been slaughtered in an inspected facility.
4. Online Markets
Online markets are similar to food hubs in that they connect meat food producers directly to consumers; however, the consumer can order meat food product directly online. In order for this exemption to apply, the online market must act as an agent for the retailer by marketing and providing a platform to sell meat food products directly to consumers. The online market does not take title to the meat food product. The retailer must maintain ownership of the meat food product and sell directly to the consumer. It should be noted that FSIS requires such online markets to register as meat food handlers.
5. At-Home Delivered Meals
The at-home meal delivery industry continues to expand in scope and operation, with industry sales exceeding $5 billion in 2017. At-home delivered meals allow consumers to order prepared meals or meal kits for in-home preparation. Often, these kits contain meat food products. The FSIS guideline states that businesses operating in the at-home delivered meal industry can utilize the same inspection exemption for retail stores, so long as they meet the requirements. This allows businesses in the at-home delivered meal industry to conduct operations of types typically performed at retail stores, such as cutting up, slicing, trimming, grinding, breaking bulk shipments, and wrapping or rewrapping meat products without being subject to inspection. However, neither slaughtering nor canning of meat food products can occur.
It is noteworthy (and unexplained by FSIS) that the guidance as written is not applicable to the other poultry, egg, and seafood products also regulated by the agency, although it is difficult to identify any legal or policy basis for disparate treatment. We anticipate that this will be a topic for further comment.
If you have any questions or would like detailed information on the FSIS inspection exemptions or more information on the issues discussed in this blog, please contact any of the following Morgan Lewis lawyers:
 “Prepared” means “slaughtered, canned, salted, rendered, boned, cut up, or otherwise manufactured or processed.”
 It should be noted that FSIS has historically resisted adopting such a straightforward policy, but its more complex interpretations of the so-called retail exemption have been effectively challenged in the courts. See, Original Honey Baked Ham of Georgia v. Glickman 172 F 3d, 885 (DC Cir. 1999).