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U.S. provides grants, loans to expand meat processing capacity

The U.S. Department of Agriculture will direct $73 million in grants to small- and medium-sized meat and poultry processors to expand their capacity and deliver more funds through lending programs, Secretary Tom Vilsack said on Wednesday, Nov. 2.

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The U.S. Department of Agriculture has announced new funding for small- and medium-sized meat processors.
Agweek file photo
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CHICAGO, Nov 2 (Reuters) - The U.S. Department of Agriculture will direct $73 million in grants to small- and medium-sized meat and poultry processors to expand their capacity and deliver more funds through lending programs, Secretary Tom Vilsack said on Wednesday, Nov. 2.

The money aims to increase competition and stability in the meat industry — which is dominated by a few players — as part of a broader effort by the Biden administration to boost competition in the U.S. economy and rein in soaring inflation.

The COVID-19 pandemic revealed cracks in the industry as outbreaks temporarily shut massive slaughterhouses early in 2020, pushing up meat prices. Some farmers had to cull livestock that could not be processed due to the closures.

The grants for 21 projects are part of $150 million the USDA set aside for the first phase of an attempt to expand processing capacity, Vilsack said. The agency said it will soon begin taking applications for a new phase to deploy an additional $225 million.

The program aims to increase capacity in beef and pork plants by over 500,000 head a year and in poultry plants by over 34 million birds a year, Vilsack said. He expects that projects will create more than 11,000 jobs, not including construction jobs.

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Meat processors have struggled to attract plant workers due to the tight labor market and employees' concerns about safety. Companies seeking USDA grants had to demonstrate they could attract workers, Vilsack said.

The USDA is also providing $75 million in loan guarantees to four meat and poultry projects and $75 million to not-for-profit programs that can provide low-interest financing to the sector, Vilsack said.

Here is where money is going in the upper Midwest:

Iowa

  • $46 million in two grants to assist Pure Prairie Farms with a chicken processing facility start-up in Charles City
  • $15 million to Region 12 Council of Governments in west-central Iowa to increase in the number of meat processors and diversity ownership
  • $8.87 million for Upper Iowa Beef, an independently owned beef harvest and processing facility in Lime Springs that opened in 2017; goal is to expand our capacity by over 50%.
  • $542,425 for Cherokee Locker Investment to modernize facility.

Minnesota

  • $15 millon for the Minnesota Meat & Poultry Revolving Loan Program, managed by the Minnesota Rural Finance Authority.

Montana

  • $2 million for Great Falls Development Authority to help fund existing and startup meat and poultry processing operations.
  • $291,900 Montana Premium Processing Cooperative, a partnership with the Montana Farmers Union and Farmers Union Industries, to start up a USDA inspected meat processing facility in an underserved area.

Nebraska

  • $20 million for Greater Omaha Packing, a third generation, privately owned company located in Omaha, Nebraska, that procures cattle primarily from independent producers in Iowa and Nebraska. Plan is to expand from 2,400 cattle per day to 3,100 head per day.
  • $688,011 for Lot 279, a company that has been selling beef products in direct to consumer retail since 2016. Lot 279 intends to build a federally inspected portion cutting and further processing facility for use by at least three family-owned cattle producers seeking to create their own brands of beef products.

North Dakota

  • $10 million for Lewis and Clark Regional Development Council for loans to help start-up, expansion and operation of meat processing facilities.
  • $471,525 for South 40 Beef, a USDA-inspected beef processing plant in Mott. Grant funds will be used to increase cooler and work space; more than doubling the amount of cattle processed per month and a 50% increase in workforce.

South Dakota

  • $8.125 million for GROW South Dakota to assist approximately 16 meat and/or poultry processors with an average loan of $500,000 per business.
  • $2.375 million for District III, a 15-country region in southeast South Dakota, to add lending capacity to help processors improve access to markets, be more efficient and retain employees
  • $2.21 million for North Prairie Butchery, a proposed small beef and pork combination plant with the capacity to process more than 100 animals per week. Current operation is a ranch near Faulkton. The plant is expected to be fully operational by late 2023

(Reporting by Tom Polansek, editing by Deepa Babington; Agweek staff contributed to this report)

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