Federal regulators say poultry producers are disadvantaged by the consolidation of meat processing. (Stephen Ausmus | Agricultural Research Service, USDA)
WASHINGTON — The U.S. Department of Agriculture beefed up its efforts to encourage competition in domestic meat and poultry supply chains on Tuesday, awarding close to $59 million in federal grants to independent processors from Idaho, Virginia, South Carolina, South Dakota and Maryland.
Agriculture Secretary Tom Vilsack announced the funding awards during a trip to Shenandoah Valley Organic LLC’s facility in Harrisonburg, Virginia, alongside Democratic Sen. Tim Kaine of Virginia and Deputy Secretary of Agriculture Jewel Bronaugh. The department selected the organic poultry processing facility, also known as Farmer Focus, to receive a roughly $3.6 million grant.
The federal money will help fund a $17.8 million expansion project, growing poultry processing capacity by close to 300,000 chickens per year and bringing 300 new jobs to northern Virginia, according to the USDA’s program description.
The USDA funds will be administered through the Meat and Poultry Processing Expansion Program, which aims to “encourage competition and sustainable growth in the U.S. meat processing sector, and to help improve supply chain resiliency,” according to the USDA Office of Rural Development.
“For too long, American farmers and ranchers have been asked to produce more to meet increasing demand across the country and around the world, while they and the rural communities they come from have struggled to see their fair share of the benefits,” Vilsack said in a Tuesday statement.
“Through investments like those I’m announcing today, USDA will continue to work tirelessly to give farmers and ranchers a fair chance to compete in the marketplace, which in turn helps lower food costs for the American people.”
The four largest meatpacking companies control 85% of the beef market, and roughly 55% of the poultry market, according to a White House-led economic analysis. Among these producers are Tyson Foods, JBS USA, Cargill, Inc., and National Beef Packing Company.
Other grants to independent processors announced Tuesday include:
- A $25 million grant for Idaho beef processor Riverbend Meats LLC, which will “offset the cost” of a new environmentally-friendly processing facility that will double daily processing capacity from 300 to 600 cattle.
- A roughly $25 million grant for poultry meat packer Prestage Farms of South Carolina, LLC, which will help equip a new facility to process 8 million turkeys per year.
- A $3.3 million dollar grant to CNF Enterprises in South Dakota, which will go to building a facility in New Underwood, South Dakota, that will process 4,000 head of livestock annually.
- A roughly $2 million grant for Holly Poultry, LLC in Maryland, to fund equipment purchases that will increase annual processing capacity by 2 million pounds of poultry by 2025.
Tuesday’s announcement marks the third allocation of federal funds to small and independent meat processors through the meat and poultry expansion program.
The USDA’s meat and poultry program is funded through the American Rescue Plan, the $1.9 trillion COVID 19-relief law Democrats passed in the early days of President Joe Biden’s term, and administered by Rural Development. The USDA received $4 billion in the law to spend on bolstering food access and supply chains.
In early January, Biden and Vilsack spoke on a webinar about increasing competition in the meatpacking industry. The president noted that 50 years ago, cattle ranchers made 60 or more cents for every dollar that consumers spent on their products, and hog farmers made 40 to 60 cents on every consumer dollar spent.
Today, beef ranchers make 39 cents and hog ranchers make 19 cents on every consumer dollar spent on their meat, Biden said.
“Four big corporations control more than half the markets in beef, pork, and poultry,” Biden said in the January appearance. “These companies can use their position as middlemen to overcharge grocery stores and, ultimately, families.
“We’re going to fight for fair prices for American farmers, ranchers, and families — all three.”
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