Ag Policy Blog

USDA on Thursday announced the opening of applications for $150 million in grants to expand meat-processing capacity nationwide under the Meat and Poultry Processing Expansion Program.

Agriculture Secretary Tom Vilsack rolled out the funding announcement at the USDA Ag Outlook Forum. The grants were part of $215 million in total funding USDA is making available as part of a series of food supply chain programs.

"For too long, ranchers and processors have seen the value and the opportunities they work so hard to create move away from the rural communities where they live and operate," Vilsack said. "Under the leadership of President Biden and Vice President Harris, USDA is committed to making investments to support economic systems where the wealth created in rural areas stays in rural areas. The funding we're announcing today ultimately will help us give farmers and ranchers a fair shake and strengthen supply chains while developing options to deliver food produced closer to home for families."

The $150 million under the Meat and Poultry processing Expansion Program -- or MPPEP as USDA called it -- will offer grants of up to $25 million to help expand processing facilities through new construction or expansion of existing facilities and equipment purchases.

USDA stated the department is encouraging applications "that benefit small farms and ranches, new and beginning farmers and ranchers, Tribes and tribal producers, socially disadvantaged producers, military veteran producers, and underserved communities."

USDA also will host two webinars to provide additional information on MPPEP. The first will be Feb. 28 at 1 p.m. Central, and the second will be March 7 at 1 p.m. Central. The program will accept applications until April 11.

For more details, see:

https://www.rd.usda.gov/…

USDA will spend another $40 million through the National Institute of Food and Agriculture (NIFA) for workforce development programs to trade workers to meet the needs of processors that are expanding capacity as well. The program will provide competitive grants to support workforce training at community, junior and technical colleges for meat and poultry processing. The request for applications for this program will open in April.

Another $25 million will come from USDA's Agricultural Marketing Service to establish partnerships with organizations that will provide technical assistance to MPPEP applicants, recent recipients and future applicants of the Meat and Poultry Inspection Readiness Grant program, and to entities who require general guidance and resources on meat and poultry processing. Of the $25 million, AMS will utilize $10 million to implement the first phase of support by establishing an initial technical assistance network and lead coordinator. More information can be found at https://www.usda.gov/…

The American Farm Bureau Federation, National Cattlemen's Beef Association and National Sustainable Agriculture Coalition were among the groups that praised USDA for rolling out the grant funding to expand meat and poultry processing capacity.

"AFBF appreciates USDA's efforts to increase competition in America's beef and poultry processing systems," said Zippy Duvall, president of AFBF. "Families continue to find rising prices at the grocery store, but farmers don't see the price they're paid for chicken and beef rise at the same rate.

"We asked Secretary Vilsack and USDA to provide more resources to level the playing field. Investments in new processing options and job creation are positive steps toward creating fair markets while strengthening America's supply chain," Duvall said.

Tanner Beymer, director of government affairs for NCBA, stated the group appreciates the administration's efforts to expand processing capacity as well. "Investing in packing capacity is critically important for the cattle industry," Beymer said. "The expansion of regional processing facilities will bolster resiliency within the beef supply chain and help return marketing leverage to cattle producers."

Eric Deeble, NSAC's policy director, said, "This is an essential step to address significant structural issues in the sector - including consolidation and processing bottlenecks for sustainable producers that limit their ability to get their products to market. We hope that the next round of investments further advances the Administration's commitment to the small and very small processors that are the foundation of more resilient, profitable, and equitable regional food systems."

USDA EXTENDS DEADLINE FOR SPOT MARKET HOG PANDEMIC PROGRAM

Separately, USDA also announced Thursday that hog producers who sold hogs through the spot market during the COVID-19 pandemic now have until April 15 to submit their applications for the Spot Market Hog Pandemic Program (SMHPP). SMHPP. Originally, the program had a deadline to submit applications by Friday.

SMHPP helps hog producers who sold hogs through a spot market sale from April 16, 2020, through Sept. 1, 2020, a time in which producers faced the greatest reduction in market prices due to the pandemic. USDA is offering SMHPP in response to a reduction in packer production and supply chain issues due to the COVID-19 pandemic, which resulted in fewer negotiated hogs being procured and subsequent lower market prices. USDA's Farm Service Agency (FSA) began accepting applications for SMHPP on Dec. 15, 2021.

"In response to stakeholder feedback and our analysis of the program to date, we will be making adjustments to clarify the definition of a spot market sale and to hog eligibility, while including documentation requirements to prevent erroneous payments," said FSA Administrator Zach Ducheneaux. "We'll be announcing those updates soon and want to assure hog producers that there will be ample time to submit their applications for assistance."

More information on SMHPP can be found at https://www.farmers.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(c) Copyright 2022 DTN, LLC. All rights reserved.