USDA grants and loans aim to boost meatpacking capacity and poultry processing

GRANT PROJECTS

The 21 grant projects include projects in 16 states. Vilsack said the USDA received more than 300 applications for the projects’ first round of funding. A key element of the grants was community support, as well as ensuring that jobs would be created and that labor was available locally for those positions, Vilsack said.

Grants range from $291,900 for a start-up co-op in Montana to $19.98 million for the expansion of Greater Omaha Packing Co.

Vilsack shed light on the Montana Premium Processing Cooperative, which is a partnership between Montana Farmers Union and Farmers Union Industries. The co-op will create a local USDA-inspected processing facility for independent livestock producers in an area that currently does not have a federally-inspected processing facility.

Another project, Vermont Livestock Slaughter & Processing, will connect Northeast farmers to schools and businesses. The USDA said meat processing in Vermont “is currently a bottleneck in the region, with many producers having to wait significant periods for service.” The $1.09 million grant will help improve and triple the capacity of the employee-owned facility.

Most grant projects involve smaller facilities and would create 10, 20 or 30 local jobs. “These are small to medium-sized production facilities,” Vilsack said. “And that was the whole point of this project, which is this effort that the president launched was basically to build local and regional capacity, not to get into the larger production facilities.”

Vilsack also added that smaller operations have been set up more to supply national and local markets. “It’s not so much geared towards or structured in a way that you would think of exporting. A lot of these facilities are centrally located in the country, and again, relatively small for the most part. So I don’t think exports are really on the minds of most of these facilities.

That’s not the case with Greater Omaha Packing, however. The $19.9 million grant would allow Greater Omaha to grow from processing 2,400 head per day to 3,100 head, representing an additional production of 195,000 cattle per year. Greater Omaha would also create 275 jobs. The Omaha packer also exports to 70 countries, including being the first packhouse to export beef to China when that market reopens.

Among the conditions required to receive the grants was the assurance that grant recipients would not end up being gobbled up by the biggest packers in the country. The grant recipient is required to provide details of ownership changes within 10 years of receipt of funds to USDA’s Rural Enterprise Cooperative Service.

“One of the requirements of this program is that the agency be notified if a sale or change of ownership of the facility, in whole or in part, is under consideration,” said Karama Neal, administrator of the Rural Business-Cooperative Service. . “So that’s something we would be monitoring…and that notification will trigger a review by the agency.”

LOAN BENEFICIARIES

Among the guaranteed loan recipients was FPL Food LLC in Georgia, which secured a $24.2 million loan guarantee to purchase prepared food production equipment.

In Iowa, Pure Prairie Farms Inc., a start-up chicken processing facility in Charles City, Iowa, received approval for a $38.7 million loan guarantee.

Under the Meat and Poultry Intermediate Loan Program, rural economic development authorities in Georgia, Iowa, Minnesota, Montana, North Carolina, North Dakota and North Dakota South received grants that will allow these local economic development groups to provide loans, grants, and infrastructure to help smaller processing facilities in their states as well.

More details on these projects will be released Wednesday at www.usda.gov.

Chris Clayton can be reached at [email protected]

Follow him on Twitter @ChrisClaytonDTN

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