The Department of Agriculture plans to invest $500 million in the nation's meat processing capacity, but specifics on how the money will need to be determined by an upcoming public input process.
Speaking at a press conference in Council Bluffs, Iowa, Ag Secretary Tom Vilsack said USDA would be investing $500 million in American Rescue Plan funding to build new meat and poultry processing capacity. The department 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 producers.
“We have got to expand the amount of capacity, the processing capacity in this country,” Vilsack said. “We can no longer rely on a handful of processing companies to do the job, to make the market competitive, to do right by farmers, to ensure as well that we have resilient food supplies.”
According to Vilsack, USDA will use the $500 million in funding to provide grants, loans and technical assistance to building processing facilities that will create a more competitive market for meat processing within the United States. He stressed that this $500 million is just the start and said he believes that the amount of available money can be expanded through private investments, philanthropic interest, state economic development resources and local government commitments.
“We’re not just talking about $500 million,” he said. “We’re talking about the power of $500 million to stimulate interest and then to act as a catalyst to draw those additional resources.”
He added that the initial funding is already available, but he hopes the program can be an example for Congress to provide a “more permanent structure” for later on. The USDA said in a release that it will be soliciting public input into how best to spend the money, including studying "the needs, gaps, and barriers to fair and competitive meat processing markets" through a Request for Information.
Of the $150 million being put toward strengthening existing small and very small processing facilities, $55 million has been made available in Meat and Poultry Inspection Readiness Grants and $100 million will go toward “reducing the financial burdens of overtime inspection fees” for these plants.
Rep. Cindy Axne, D-Iowa, who also spoke at the press conference said the effort will add stability to markets
“We've gotten shut out in far too many markets because of lack of transparency and an inability to be able to market our products in a way that gives us some equal footing so that our farmers can do better here in Iowa,” she said.
The announcement also drew support from Sens. Chuck Grassley, R-Iowa, and John Thune, R-S.D., though Thune expressed his disappointment with where the money was coming from.
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“While I wish the U.S. Department of Agriculture chose a different funding source, expanding meat processing capacity is exactly what the industry needs. I applaud the outcome, but more work needs to be done,” Thune said in a statement. “I will continue to look for ways to give smaller packers a stronger position in this market.”
The National Sustainable Agriculture Coalition, the National Cattleman’s Beef Association and R-Calf USA also voiced their support of the announcement.
The funding comes as a broader Biden administration effort to address anticompetitive practices in the economy is also unfolding. On Friday, President Joe Biden signed an executive order calling for a host of actions from various government agencies, including USDA. Among the issues highlighted by the White House was the consolidation of ownership of the nation's meatpacking industry and the potential impact on producers.
Vilsack said the department plans to begin work on the issues outlined in the executive order as well as the funding roll out soon, and he would be "very disappointed if we couldn't come up with some early wins from this and some other things we're going to do in a relatively short period of time.
"Hopefully we have something specific to point to at the end of this year, early next year," he added. "Certainly, by this time next year, we should be seeing some real, real interest in this program."
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