U.S. provides grants, loans to expand meat processing capacity

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FILE PHOTO: Cuts of meat are seen for sale at a butcher shop in Manhattan, New York City

CHICAGO (Reuters) – The U.S. Department of Agriculture will direct $73 million in grants to small- and medium-sized meat and poultry processors to expand their capacity and deliver more funds through lending programs, Secretary Tom Vilsack said on Wednesday.

The money aims to increase competition and stability in the meat industry – which is dominated by a few players – as part of a broader effort by the Biden administration to boost competition in the U.S. economy and rein in soaring inflation.

The COVID-19 pandemic revealed cracks in the industry as outbreaks temporarily shut massive slaughterhouses early in 2020, pushing up meat prices. Some farmers had to cull livestock that could not be processed due to the closures.

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The grants for 21 projects are part of $150 million the USDA set aside for the first phase of an attempt to expand processing capacity, Vilsack said. The agency said it will soon begin taking applications for a new phase to deploy an additional $225 million.

The program aims to increase capacity in beef and pork plants by over 500,000 head a year and in poultry plants by over 34 million birds a year, Vilsack said. He expects that projects will create more than 11,000 jobs, not including construction jobs.

Meat processors have struggled to attract plant workers due to the tight labor market and employees’ concerns about safety. Companies seeking USDA grants had to demonstrate they could attract workers, Vilsack said.

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The USDA is also providing $75 million in loan guarantees to four meat and poultry projects and $75 million to not-for-profit programs that can provide low-interest financing to the sector, Vilsack said.

(Reporting by Tom Polansek, editing by Deepa Babington)

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