The White House announced its "Action Plan for a Fairer, More Competitive and More Resilient Meat and Poultry Supply Chain" in which the administration is making $1 billion in American Rescue Plan funds available for expansion of independent meat and poultry processing capacity in an effort to provide greater competition.
In a virtual meeting with producers, President Joe Biden took aim at concentration in the meat and poultry industries. He said, "Capitalism without competition isn't capitalism, it's exploitation. That's what we're seeing in poultry and those industries now. Small independent farmers and ranchers are being driven out of business."
The Action Plan is to create a more competitive, fair, resilient meat and poultry sector, with better earnings for producers and more choices and affordable prices for consumers, according to the White House.
The Action Plan includes:
- USDA will provide gap financing grants totaling up to $375 million for independent processing plant projects that fill a demonstrated need for more diversified processing capacity. In the spring, USDA will publish a Request for Proposals for Phase I. This will include approximately $150 million to jump-start an estimated 15 projects with the "greatest near-term impact." This summer, another $225 million will be deployed in Phase II. USDA plans to ensure the funds expand capacity oustide of the largest meat and poultry operations.
- $275 million will be deployed in partnership with lenders to make more capital available to independent processors.
- $100 million will be deployed to make more than $1 billion in guaranteed loans available for infrastructure investments, such as cold stoarage and specialized equipment.
- $100 million to support workforce development and training.
- $100 million to reduce overtime inspection costs for small and very small processing plants.
Earlier, USDA made $32 million in grants to 167 existing meat and poultry processing facilities to help them become federally inspected.
The administration also announced that USDA will soon issue new rules to "provide greater clarity and strengthen" the Packers and Stockyards Act. Also, new "Product of USA" labeling rules will be issued for the purpose of helping consumers "better understand where their meat comes from."
Reactions to the announcement varied:
The North American Meat Institue President Julie Anna Potts said in a statement, "For the third time in six months, President Joe Biden and his Administration announced the same plans to spend $1 billion to fund government intervention in the market in an attempt to increase prices livestock producers receive while blaming inflation on private industry.
"The Biden Administration continues to ignore the number one challenge to meat and poultry production: labor shortages. This tired approach is not surprising because they have refused to engage with the packing and processing sector they attack, going so far as to hold a roundtable on meat packing without a single beef or pork packer present."
American Farm Bureau Federation President Zippy Duvall said in a statement, "Farmers and ranchers want a fair shake. The joint initiative between USDA and the Department of Justice to create an online portal to report competition law violations, and efforts to strengthen the Packers & Stockyards Act, will go a long way to ensuring fairness in the industry. More accurately defining 'Product of the USA' labeling will also allow families to make more well-informed decisions at the grocery store."
U.S. Cattlemen's Association President Brooke Miller said, "We are hopeful that the Action Plan unveiled today will help bring transparency and true price discovery to the cattle marketplace, bring back truth in labeling through the closure of the Product of the U.S.A. loophole, and invest in a stronger - and more American - meat industry."
Congress returned this week and is expected to address legislation it failed to complete last year. The continuing resolution (CR) to keep the federal government operating expires on Feb. 18. Congress will need to finalize a funding bill or pass another CR to ensure there is not a government shutdown. The authorization of the Livestock Mandatory Reporting (LMR) program was extended through the CR until Feb.18. Democratic leadership wants to continue to work on the Build Back Better legislation, but they still face objections by Senator Joe Manchin (D-WV).
The House is expected to begin farm bill hearings this spring, and the Senate plans to hold a hearing on LMR later this month.
USDA Ag Outlook Forum
USDA's 98th Agricultural Outlook Forum will be a virtual event this year and will be held Feb. 24-25. The theme for this year's Forum is "New Paths to Sustainabliltiy and Productivity Growth." It will focus on innovations to minimize agriculture's environmental footprint and ensure sustainability while improving crop yields.
USDA Chief Economist Seth Meyer will give USDA's outlook for U.S. commodity markets and trade for 2022 and U.S. farm income. Secretary of Agriculture Tom Vilsack will be the keynote speaker.
There will be 30 breakout sessions covering six key areas:
- Climate mitigation and adaptation
- Frontiers in agricultural innovation and production
- U.S. agricultural trade and global markets
- Commodity outlooks
- Supply chain resilience
- Equity and inclusion
Registration is free, but you have to register to attend virtually. To register, visit the Agricultural Outlook Forum website.