USDA gives $73 million to create, expand smaller livestock processors

The U.S. Department of Agriculture announced its first grant awards on Wednesday — totaling about $73 million — to increase the processing capacity of smaller, independent meatpackers in 16 states.

They range from a $292,000 grant to provide independent Montana farmers with a USDA-inspected meat processing facility — which is required to sell the products commercially — to nearly $20 million to help an Omaha, Nebraska, processor increase its capacity about 29%.

The money is part of the department’s $375 million Meat and Poultry Processing Expansion Program that seeks to reduce the market share of a small number of companies that process most of the country’s livestock. The program was announced in June, and 21 grants have been awarded so far.

Increasing the number of smaller processors will give farmers more markets for their animals and will make the nation’s food supply chain more resilient, U.S. Secretary of Agriculture Tom Vilsack said.

The long-running shift to larger processing facilities created problems at the start of the coronavirus pandemic, when facilities that were idled because of widespread worker illness led to sudden drops in demand for the animals. That led, in some cases, to mass euthanasia of livestock.

Increasing the number of smaller, independent processors can also allow for more specialized products, he said.

“It will give the consumer the ability potentially to be able to purchase locally,” Vilsack said in a call with reporters Tuesday. “They may be able to know that the ribeye or the hamburger or the pork chop or the chicken breast that they’re purchasing was actually raised and processed locally, which many consumers are anxious to support.”

The largest grant announced Wednesday was nearly $20 million for Greater Omaha Packing Company, which processes about 2,400 cattle per day in Omaha, Nebraska, according to the USDA. The grant money is for an expansion that is expected to boost processing to 3,100 cattle per day and add 275 jobs.

The company pays its production employees between $20 and $30 per hour, according to a recent job listing on the company’s website. Its products ship to all states and more than 70 other countries.

The next-highest grant award of about $8.9 million will go to Upper Iowa Beef, in Lime Springs, to expand its processing capacity about 50%. The USDA did not list how many cattle it processes each day, but the company’s website said it buys cattle from about 400 farmers within 80 miles of the facility.

Nearly $7 million was awarded to Pure Prairie Farms, which bought a shuttered poultry plant in Charles City last year and had hoped to reopen the plant this year, according to the Charles City Press. The facility — which employed about 500 people — closed in August 2019.

“We’ll be returning hundreds of jobs to a small rural community,” Vilsack said.

More grant awards are expected, but Vilsack didn’t say when.

Other notable grant recipients include:

— Cherokee Locker Investment, Cherokee, Iowa: About $540,000 to build a new processing facility that is federally inspected, so farmers can sell their products locally and online.
— North Prairie Butchery, South Dakota: About $2.2 million for a new beef and pork facility that will process more than 100 animals per week for commercial sale.
— Processors LLC, Louisiana: About $7 million to increase its catfish processing capacity by 30% in the next four years.
— Yosemite Foods, California: About $6.9 million to increase the capacity of an “environmentally conscious” pork facility.
— Zimmerman Meats, Missouri: $730,000 to aid a long-term expansion project that will include federal inspection of its products for commercial sale.

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