By Michele F. Mihaljevich
WASHINGTON, D.C. – The USDA is distributing more than $223 million in loans and grants in 19 states in an effort to increase competition and economic opportunities for meat and poultry processors and producers, the agency said last week.
Under the Food Supply Chain Guaranteed Loan Program, USDA will invest more than $75 million in four meat and poultry-related projects in three states, including one each in Iowa and Kentucky.
Twenty one projects in 16 states, including Illinois, Iowa, Kentucky and Ohio, will receive $73 million in the first round of grants from the Meat and Poultry Processing Expansion Program (MPPEP). Eight projects in seven states, including Iowa, will receive $75 million in grants from the Meat and Poultry Intermediary Lending Program (MPILP).
The funding “will expand meat and poultry processing capacity, which in turn increases competition, supports producer income and strengthens the food supply chain to lower costs for working families and create jobs and economic opportunities in rural areas,” USDA said in its Nov. 2 announcement.
Agriculture Secretary Tom Vilsack said the projects are expected to increase processing capacity for beef and pork by more than 500,000 head annually. Poultry processing capacity could increase by about 34 million birds.
In Iowa, nearly $39 million from the loan program will be used to assist Pure Prairie Farms, Inc., with a chicken processing facility start-up in Charles City, the agency said. Lawrenceburg, Ky.-based Lorenz & Hammond Limited Liability Co. will use $2.1 million from the program in the construction of a meat processing facility.
Also in Iowa, $542,425 in MPPEP funds will allow Cherokee Locker Investment, Inc., a meat processor in Cherokee, to build a mixed species processing facility. Pure Prairie Farms will use nearly $7 million from the program to buy a closed poultry plant in Charles City. With about $8.9 million from the program, Upper Iowa Beef will expand its facility in Lime Springs.
Illinois-based Saline River Farms will use its MPPEP grant of $6.9 million in the construction of a beef and pork processing facility. Marksbury Farm Foods, of Lancaster, Ky., will use $779,080 to expand its slaughter and grind production areas. A nearly $1.1 million grant to R&C Packing Inc. in Bidwell, Ohio, will be used for a new processing plant, barn and cold storage space, and retail space.
The Region XII Council of Governments Inc., in Iowa, will receive a $15 million grant from the MPILP. The organization hopes to see increases in the number of meat processing facilities in the state, along with diversification of ownership in Iowa’s meat processing infrastructure and an increase in the number of producers, USDA said.
“I think this is a good day for producers, a good day for the communities and a good day for consumers,” Vilsack stated. “We’re creating new opportunities, new choices for producers and consumers.”
The USDA announcement was met with approval from the National Cattlemen’s Beef Association (NCBA). “NCBA has long advocated for expanded processing capacity to provide cattle producers with additional options for turning their cattle into high-quality beef,” Tanner Beymer, the organization’s senior director of government affairs, said in a release. “Today, the cattle industry needs more targeted capacity in high-need areas, and we look forward to these facilities launching and expanding operations.”
Rob Larew, president of the National Farmers Union, praised the administration in a release for “making diversified, local and regional food systems a priority. For decades, consolidation in meat processing has put the squeeze on farmers, ranchers and consumers while corporate monopolies rake in record profits. Today’s announcement is another step toward putting control and profitability back in the hands of farmers, ranchers and our communities.”
In January, President Joe Biden announced a plan calling for a fairer, more competitive and more resilient meat and poultry supply chain. The plan included strategies to expand independent processing capacity; strengthen rules protecting farmers, ranchers and consumers; and increase transparency in cattle markets.
Vilsack said the USDA has worked to give farmers and ranchers a fair chance to compete in the marketplace. “By jump starting independent processing projects and increasing processing capacity, these investments create more opportunities for farmers and ranchers to get a fair price, while strengthening supply chains, delivering more food produced closer to home for families, expanding economic opportunity and creating jobs in rural America.”
Under the food supply chain loan program, USDA partners with lenders to guarantee loans to help eligible entities expand meat and poultry processing capacity and strengthen the U.S. food supply chain, the agency said. Since the program began in December 2021, more than $250 million in loans have been guaranteed for projects.
The MPPEP supports capacity expansion projects together with other private and public finance tools, USDA said. Vilsack said more announcements regarding the first round of funding are expected in December or January. The agency said it expects to soon begin taking applications for a second round of funding.
The MPILP provides grants to nonprofit intermediary leaders who finance – or plan to finance – the start-up, expansion, or operation of slaughter, or other processing of meat and poultry. Applications for a second round of funding from the program will be accepted until Dec. 31, 2022.
Vilsack said the projects probably won’t have an immediate impact on prices.
“Each of the projects is at a different stage,” he noted. “Some are very far along in design, engineering, contracting, and are at the beginning of construction. There are multiple reasons for increased costs. This will have an impact but it will take some time.”