Secretary of agriculture announces $223 million investments to expand meat and poultry processing

On Nov. 1, Tom Vilsack, United States Department of Agriculture secretary, announced the Biden-Harris administration has provided $223 million in grants and loans to meat and poultry processors on behalf of the administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain. The underlying purpose of these funds is to increase competition, economic opportunities and processing capacities across the economy and in turn, lower food costs for consumers.

Vilsack said the goals of these financial investments are to support producer-focused business models, strengthen local and regional food systems, reduce barriers to processing, allow all processors to compete at scale, restore jobs in rural places and empower family-owned businesses.

“This required a comprehensive approach and programs that would provide resources for new and expanding capacity and markets and provide resources for strengthening the supply chain between the farmer and consumer and make sure there was available credit when the opportunities or circumstances require it,” Vilsack said.

Vilsack said the funds are in three different programs. The first includes $73 million awarded through 21 grants covering 19 states in the first round of the Meat and Poultry Processing Expansion Program. This program was designed to fund capacity expansion projects. Additionally, USDA will soon take applications for a new phase of this program that includes $225 million to provide gap financing for independent processing plant projects. Vilsack said the distribution of grants stretch from Washington State to Vermont, from Texas to North Dakota and California to Louisiana.

“We’re excited about these projects and we think it’s going to expand capacity in beef, pork and mixed processing by over 500,000 head per year. We think it will expand capacity in poultry nearly 34 million birds per year,” he said. “We anticipate over 11,000 jobs will be created on an ongoing operational basis and that does not include construction jobs as a result of the expansions and construction of new facilities.”

He said this complements the $54 million previously invested in 266 facilities that now have expanded opportunities to sell beyond their own individual states.

Another $75 million was devoted to eight projects in seven states through the Meat and Poultry Intermediary Lending Program. This program provides grant funding to non-profit intermediary lenders who finance the start-up, expansion or other processing of meat and poultry. The second round of MPILP includes $125 million up for grabs with applications being accepted until the end of the fiscal year.

“We recognize that as we create these new processing opportunities and supply chains strengthen, from time to time there will be a need for additional funding or funding for additional start-ups,” he said. “We want to respond to the need for ongoing access to capital, so we established a lending program, which is providing grants to not-for-profit organizations that will in turn be able to provide loan interest financing for start-ups, expansion of slaughter or other processing for meat and poultry.”

Finally, $75 million was awarded in four projects through the Food Supply Chain Guaranteed Loan program. This program allows USDA to partner with lenders to guarantee loans to help eligible entities to expand meat and poultry processing capacity. Since the FSCGLP was launched in December 2021, more than $250 million in loans has been guaranteed for the food supply chain, with four of the projects—totaling $75 million—being processing businesses.

“The loan guarantee program that was made available for cooperatives, for-profit companies, tribes and public entities,” Vilsack said. “We announced roughly $100 million of availability in this fund which we felt would result in loan guarantees that could amount to $1 billion.”

To date he said the program has issued 14 loans with $254 million in grantees. Additionally, he announced four new poultry processing operations with roughly $75 million in investments were made possible through the loan program.

“This is a good day for producers and a good day for those interested in working in these facilities, a good day for communities that will benefit, a good day for consumers and we are looking forward to these projects taking hold and creating new opportunities and choices for both producers and consumers,” Vilsack said.

Lacey Vilhauer can be reached at 620-227-1871 or [email protected].