USDA Announces $500 Million for Expanded Meat & Poultry Processing

USDA is announcing it intends to make significant investments to expand processing capacity and increase competition in meat and poultry processing to make agricultural markets more accessible, fair, competitive, and resilient for American farmers and ranchers.

Specifically, USDA announced its intent to invest $500 million in American Rescue Plan funds to expand meat and poultry processing capacity so that farmers, ranchers, and consumers have more choices in the marketplace. USDA also announced more than $150 million for existing small and very small processing facilities to help them weather COVID, compete in the marketplace and get the support they need to reach more customers. USDA is also holding meatpackers accountable by revitalizing the Packers and Stockyards Act, issuing new rules on “Product of USA” labels, and developing plans to expand farmers’ access to new markets.

The announcement is part of the Biden-Harris Administration’s historic commitment to fight monopolization and promote competition across the economy. They are also aligned with USDA’s vision of a food system that is fair, competitive, distributed, and resilient, one that supports health and ensures producers receive a fair share of the food dollar while advancing equity and combating the climate crisis. In the coming months, USDA will take additional steps to promote competition and make a series of additional investments under USDA’s Build Back Better Initiative focused on building a better food system.

USDA will commit $500 million of USDA’s Build Back Better Initiative funds through the American Rescue Plan to support new competitive entrants in meat and poultry processing. USDA will provide grants, loans, and technical assistance to address concentration within the meat and poultry sectors and relieve supply chain bottlenecks by supporting new meat and poultry processing facilities. These facilities will create competitive opportunities for producers in local and regional food systems so that farmers and ranchers have access to better choices and fairer prices. USDA has issued a Request for Information (RFI) to solicit public input into its strategy to improve meat and poultry processing infrastructure and will hold targeted stakeholder meetings and other public engagement to better understand the needs, gaps, and barriers to fair and competitive meat processing markets.

SDA will invest more than $55 million in strengthening existing small and very small meat processing capacity, benefitting smaller producers and processing plants. USDA has made $55.2 million available for Meat and Poultry Inspection Readiness Grants to support expanded meat and poultry slaughter and processing capacity and efficiency while maintaining strong inspection and food safety standards.

USDA will dedicate $100 million to help small and very small processing plants weather the volatility and unexpected costs that COVID imposed. With American Rescue Plan funds, USDA will provide $100 million to reduce the financial burden of overtime inspection fees for small and very small poultry, meat and egg processing plants, which provide farmers with local alternatives and greater capacity to process livestock.

USDA will revitalize the Packers and Stockyards Act to fight unfair practices and rebuild a competitive marketplace. The Packers and Stockyards Act was designed to ensure a fair and competitive marketplace and protect farmers against abuse at the hands of large businesses in the livestock and poultry industry. But the previous administration systematically weakened the law’s scope. To facilitate effective enforcement of the Act, USDA will be conducting three rulemakings. First, the rulemakings will clarify the conduct that USDA considers a violation of the Packers and Stockyards Act, including conduct that is unfair, deceptive, or unjustly discriminatory against farmers and growers. Second, they will address oppressive practices in chicken processing. Third, the rulemakings will reinforce the longstanding USDA position that it is not necessary to demonstrate harm or likely harm to competition in order to establish a violation of the Act.

USDA will develop a plan to increase farmers’ and ranchers’ access to new markets, and promote their ability to receive a fair return. USDA will develop a plan to increase opportunities for farmers to access markets, including by supporting value-added markets and local and regional food distribution systems. USDA will also analyze and recommend policies to address the impacts of concentration in seeds and in the retail sector on family farmers, and propose strategies to enhance transparency and accountability in key markets.

USDA will issue new rules on labeling so that domestic farmers and ranchers don’t have to compete with foreign companies that mislead consumers. On July 1st, USDA announced intent to conduct a top-to-bottom review of the “Product of USA” meat labeling term.