USDA announces $500 million to expand meat processing capacity

By Julie Tomascik 

The U.S. Department of Agriculture (USDA) recently announced a $500 million investment to expand beef, pork and poultry processing capacity, as well as increase competition in meat and poultry processing.

It’s another effort by the Biden administration to increase competition in agricultural markets.

“The COVID-19 pandemic led to massive disruption for growers, food workers, and consumers alike. It exposed a food system that was rigid, consolidated and fragile. Meanwhile, those growing, processing and preparing our food are earning less each year in a system that rewards size over all else,” U.S. Secretary of Agriculture Tom Vilsack said. “The investments USDA will make in expanding meat and poultry capacity, along with restoration of the Packers and Stockyards Act, will begin to level the playing field for farmers and ranchers.”

The funds will be distributed through the American Rescue Plan.

“This is a once-in-a-generation opportunity to transform the food system, so it is more resilient to shocks, delivers greater value to growers and workers, and offers consumers an affordable selection of healthy food produced and sourced locally and regionally by farmers and processors from diverse backgrounds,” Vilsack said. “I am confident USDA’s investments in expanded capacity will spur millions more in leveraged funding from the private sector and state and local partners as our efforts gain traction across the country.”

States with large agriculture industries are eyeing the potential to help farmers and ranchers.

“We appreciate USDA for taking steps to address market challenges and provide greater flexibility for all farmers and ranchers to be competitive in today’s economy,” TFB National Legislative Director Laramie Adams said. “We will be reviewing the details of the announcement to ensure it helps create a more financially sustainable environment for livestock producers.”

USDA will use the $500 million to provide grants, loans and technical assistance to build and expand processing facilities that will create a more competitive market for meat processing in the U.S.

The program’s goal is to create competitive opportunities for producers in local and regional food systems.

USDA issued a Request for Information to solicit public input on the strategy to improve meat and poultry processing infrastructure. The agency also will hold targeted stakeholder meetings and other public engagement to learn more and gain feedback on the strategy.

The agency also plans to distribute $150 million to help get existing small and very small processing facilities through the COVID-19 pandemic, creating new rules for Product of USA labels and making new markets accessible to livestock producers.

Of the $150 million, $55 million will be available in Meat and Poultry Inspection Readiness Grants and $100 million will be used to reduce the financial burdens of overtime inspection fees for these plants.

“Growing concern about livestock market fairness is accelerated by the continued rise in grocery store meat prices while ranchers struggle to break even on the cattle they raise and poultry farmers being locked into agreements with very little recourse if they’re underpaid,” American Farm Bureau Federation President Zippy Duvall said. “It’s time to get to the bottom of what’s driving these imbalances. More opportunities for farmers and ranchers to sell their products will ensure they are paid fairly while providing more options for America’s families.”

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