The pandemic revealed an increased interest in smaller and local meat processing facilities as a way to add resiliency to the current meat processing sector, as well as consumers’ desire to connect directly with local producers. USDA announced an investment of $32 million in grants awarded to 167 meat and poultry slaughter and processing facilities to support expanded capacity and efficiency through the Meat and Poultry Inspection Readiness Grant program.
Ag Secretary Tom Vilsack says the investment supports local and regional meat and poultry processors as they recover from the pandemic and also work to expand capacity.
With this grant funding, meat and poultry processing businesses can cover the costs for improvements such as expanding existing facilities, modernizing processing equipment and meeting packaging, labeling, and food safety requirements needed to achieve a Federal Grant of Inspection under the Federal Meat Inspection Act or the Poultry Products Inspection Act, or to operate under a state’s Cooperative Interstate Shipment program. These changes will allow these facilities to serve more customers in more markets.
“Achieving a federal grant of inspection or operating under a Cooperative Interstate Shipment program allows meat and poultry processors to ship products across state lines, pursue new market opportunities, and better meet consumer and producer demand along the supply chain,” Vilsack says.
MPIRG, a new program authorized by the Consolidated Appropriations Act of 2021, is jointly administered by USDA’s Agricultural Marketing Service and Food Safety and Inspection Service. The program was part of USDA’s comprehensive funding package to help small and very small processing facilities weather the pandemic, compete in the marketplace, and get the support they need to reach more customers.
In June 2021, USDA announced the availability of $55.2 million in MPIRG funding, accepting applications for a competitive grant award process which resulted in the most recent awards. Remaining funds will be made available through a forthcoming Request for Applications.
This summer, while testifying before the House Agriculture Committee, Jayson Lusk, Purdue University professor and head of agricultural economics, shared his research showed that even if there would have been a more distributed packing sector consisting of more small and medium-sized plants instead of a small number of large plants, the price spread dynamics and beef supply disruptions would likely not have been appreciably different than what was witnessed in 2020.
He added, “Support for small and local processors might benefit local economic ecosystems and increase custom harvest operations for producers, but these operations, because they lack economies of scale, must focus on quality and service to be competitive, and are such a small part of the national industry that investments at this seize are unlikely to significantly alter the aggregate industry capacity.”