Feds announce new funding to expand meat processing

Cattle at Pete and Meagan Lannan’s Barney Creek Livestock operation, based on the Jordan Ranch in Livingston, Montana, on May 23, 2022. (USDA/FPAC photo by Preston Keres)

The U.S. Department of Agriculture recently pledged about $110 million to smaller and independent meat processors — including five in Iowa — to expand their capacities in an effort to increase competition in the industry and to give farmers more options.

The federal grants announced on Thursday range in value from about $123,000 for a small custom meat shop in Washington state to $10 million for an expansion of a new producer-owned beef plant in Texas that plans to employ 1,500 people.

U.S. Secretary of Agriculture Tom Vilsack said the grant awards to more than 50 meat and poultry processors are meant to help alleviate the industry’s consolidation over decades that has, at times, decreased profits for farmers and increased prices for consumers.

“When you have basically 85% of the processing capacity for meat and poultry in the hands of four companies, and you have areas of the country where farmers are given one place to market, and only one place, and they have to take the price … I think it is important and necessary for us to continue to make the investments that we’re announcing today,” Vilsack said in a press call with reporters.

In Iowa, five businesses were awarded federal funding:

— Edgewood Locker, in Edgewood in northeast Iowa, will get about $1.4 million to increase its processing and storage capacity by about 40% to help alleviate a processing backlog that can be more than a year.

— Leonard’s Locker, in Frederika in northeast Iowa, will get about $860,000 to build a new beef and hog processing facility to expand its capacity by 50%. It expects to process animals from 60 more livestock producers and hire four more full-time employees.

— Gilbertville Meat Locker, in Gilbertville in northeast Iowa, will get $250,000 to expand its production capacity by about 30%, allowing it to serve 80 more livestock producers.

— Nelson Locker, in Hartley in northwest Iowa, will get about $250,000 to replace aging equipment. It plans to add two full-time jobs and work with 25% more producers.

— Nimrod Meats, a relatively new custom livestock processor in Iowa Falls in north-central Iowa, will get more than $245,000 for new equipment to expand their products and create eight new jobs.

In recent years the USDA has committed more than $700 million toward similar businesses. The new grant awards were part of the department’s Meat and Poultry Processing Expansion Program and its Local Meat Capacity Grant Program.

“I’m very grateful that we were selected to receive this grant to be used to make improvements on our processing operations,” said Will Harris, the fourth-generation owner of White Oak Pastures in Georgia, which received $690,000. “White Oak Pastures is the largest employer in one of the poorest counties in the USA. A lot of people benefit from this grant.”

Vilsack said the expansions of smaller, independent processors will help make the meat processing industry more adaptable to disruptions — a problem that was exposed in the early months of the coronavirus pandemic when some major meat processors were forced to temporarily shutter their operations because their workers were infected. That led to the mass killings and waste of livestock that had nowhere to be butchered.

“The reality is, during the pandemic, what we learned was that the food system was incredibly efficient, but not particularly resilient,” he said.

Full lists of the recent recipients are here and here .

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