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USDA commits $215m for meat and poultry processing capacity expansion

USDA meat processing packing plant USDA FDS.jpg
Funding aims to promote competition, increase resiliency in American food supply chain.

U.S. Department of Agriculture (USDA) Secretary Tom Vilsack announced today that USDA is making available up to $215 million in grants and other support to expand meat and poultry processing options, strengthen the food supply chain, and create jobs and economic opportunities in rural areas. The announcement is one of many actions that USDA is taking to expand processing capacity and increase competition in meat and poultry processing to make agricultural markets more accessible, fair, competitive and resilient for American farmers and ranchers.

“For too long, ranchers and processors have seen the value and the opportunities they work so hard to create move away from the rural communities where they live and operate,” Vilsack said. “Under the leadership of President Biden and Vice President Harris, USDA is committed to making investments to support economic systems where the wealth created in rural areas stays in rural areas. The funding we’re announcing today ultimately will help us give farmers and ranchers a fair shake and strengthen supply chains while developing options to deliver food produced closer to home for families.”

USDA Rural Development will make $150 million available in grants to fund startup and expansion activities in the meat and poultry processing sector. USDA’s National Institute of Food and Agriculture (NIFA) will provide another $40 million for workforce development and training, and the Agricultural Marketing Service (AMS) will provide $25 million to offer technical assistance to grant applicants and others seeking resources related to meat and poultry processing.

“These new opportunities are part of the Biden-Harris Administration’s commitment to fight monopolization and promote competition across the economy,” USDA said. “They are also aligned with USDA’s vision of a food system that supports health and ensures producers receive a fair share of the food dollar while advancing equity and combating the climate crisis.”

This funding announcement follows the Biden-Harris Administration’s September 2021 announcement about the steps it is taking to address concentration in the meat-processing industry and the January 2022 announcement about an Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain. It also follows USDA’s December 2021 announcement of $100 million for guaranteed loans on top of the previously announced $500 million investment to expand meat and poultry processing capacity.

National Cattlemen’s Beef Association (NCBA) said it appreciates the Administration’s efforts to expand and diversify processing capacity and looks forward to working with USDA to ensure proper implementation of the new funds.

“Investing in packing capacity is critically important for the cattle industry,” said NCBA Director of Government Affairs and Market Regulatory Policy Tanner Beymer. “The expansion of regional processing facilities will bolster resiliency within the beef supply chain and help return marketing leverage to cattle producers."

American Farm Bureau Federation President Zippy Duvall said AFBF had asked Secretary Vilsack and USDA to provide more resources to level the playing field and called the latest funding announcements “positive steps toward creating fair markets while strengthening America’s supply chain.”

 “AFBF appreciates USDA’s efforts to increase competition in America’s beef and poultry processing systems. Families continue to find rising prices at the grocery store, but farmers don’t see the price they’re paid for chicken and beef rise at the same rate,” he said.

Eric Deeble, policy director for the National Sustainable Agriculture Coalition, said the funding announcement is “an essential step to address significant structural issues in the sector - including consolidation and processing bottlenecks for sustainable producers that limit their ability to get their products to market.”

He continued, “We hope that the next round of investments further advances the Administration’s commitment to the small and very small processors that are the foundation of more resilient, profitable, and equitable regional food systems.”

Meat and Poultry Processing Expansion Program

USDA Rural Development is making $150 million of American Rescue Plan Act funding available through the Meat and Poultry Processing Expansion Program (MPPEP). USDA is offering grants of up to $25 million each to expand processing capacity through a variety of activities, including but not limited to construction, expansion of existing facilities, and acquisition of equipment.

USDA encourages applications that benefit smaller farms and ranches, new and beginning farmers and ranchers, Tribes and tribal producers, socially disadvantaged producers, military veteran producers, and underserved communities.

USDA will host two informational webinars to provide information on MPPEP. The first, Feb. 28 at 2 p.m. Eastern Time, will provide an overview of the program. The second, March 7 at 2 p.m. Eastern Time, will cover application requirements. Registration information for the webinars is available on the MPPEP website.

For additional information, applicants and other interested parties are encouraged to visit the MPPEP website.

Workforce development

USDA’s NIFA will invest an additional $40 million through existing workforce development programs to provide a pipeline of well-trained workers to meet the demand for both current processors and increased independent processing capacity. The primary investment will be through competitive grants to support workforce training at community, junior and technical colleges with programs specifically for meat and poultry processing. A Request for Applications will be published in April 2022. Additional investments will leverage existing regional USDA education and Extension networks and establish new, or supplement select existing, Centers of Excellence at Minority-serving Institutions focused on meat and poultry research, education and training. Each of these investments is designed to deliver needed support more quickly. Additional investments, either through the same or new programs and partnerships, are expected later this year. To sign up for notifications of these and other NIFA funding opportunities, visit the NIFA website.

USDA expects to continue working with the Department of Labor to support and encourage the development of good jobs in the agricultural sector, including jobs in meat and poultry processing.

Technical assistance

USDA also is helping to ensure that entities proposing independent meat and poultry processing projects through the MPPEP have full service technical assistance support from application through post-award. The approximately $25 million in American Rescue Plan funding is intended to establish partnerships with organizations that will provide technical assistance to MPPEP applicants, recent recipients and future applicants of the Meat and Poultry Inspection Readiness Grant program, and to entities who require general guidance and resources on meat and poultry processing. Of the $25 million, AMS will utilize $10 million to implement the first phase of support by establishing an initial technical assistance network and lead coordinator.

USDA’s one-year supply chain report, also published today, assesses the opportunities, including today’s significant investment in the meat and poultry sector, that USDA, other Federal agencies and Congress have made over the long-term to infuse stability, improve equity, diversify and expand infrastructure and markets, and transform the food system.

 

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