USDA has announced a $500 million investment of American Rescue Plan funds to expand meat and poultry processing capacity to provide farmers and consumers more choices in the marketplace, and an additional $150 million for existing small and very small processing facilities to help them weather COVID and compete in the market place.
In making the announcement, Ag Secretary Tom Vilsack said USDA also intends to hold meatpackers accountable by revitalizing the Packers and Stockyards Act, in addition to issuing new rules on “Product of USA” labels, and developing plans to expand farmers’ access to new markets.
According to Vilsack, USDA’s efforts will “shift the balance of power back to the people,” providing a better, and fairer markets for producers and consumers alike.
“This is welcome news and a much needed investment in small and medium sized meat processing facilities in the U.S.,” said Ernie Birchmeier, Michigan Farm Bureau livestock specialist. “As we experienced during the pandemic, and continue to experience, there is a shortage of processing facilities and demand for locally produced meat is very strong.”
According to Vilsack, market consolidation has led to abusive practices by dominant companies, making it harder for farmers and consumers to get a fair price, noting that the farmers’ share of every dollar spent on food has declined consistently from 35 cents in the 1970s to around just 14 cents in recent years.
Concentration in food processing has contributed to bottlenecks in America’s food supply chain, Vilsack said, pointing to just four large meat-packing companies currently controlling over 80 percent of the beef market alone.
“Hopefully this is a step in the right direction toward solving some challenges while working to meet customer demand and alleviating some challenges are farmer are facing,” added Birchmeier.
The following initiatives are included in the USDA announcement:
- USDA will commit $500 million of USDA’s Build Back Better Initiative funds through the American Rescue Plan to support new competitive entrants in meat and poultry processing.
- USDA will invest more than $55 million in strengthening existing small and very small meat processing capacity, benefitting smaller producers and processing plants.
- USDA will dedicate $100 million to help small and very small processing plants weather the volatility and unexpected costs that COVID imposed.
- USDA will revitalize the Packers and Stockyards Act to fight unfair practices and rebuild a competitive marketplace.
