USDA Invests $650M to Expand Meat and Poultry Processing Capacity

USDA plans to make a $500 million investment to expand processing capacity and increase competition in meat and poultry processing to create what the agency says will be a more accessible, fair, competitive, and resilient agricultural market for U.S. farmers and ranchers.

This is an effort by USDA to comply with President Biden’s Executive Order aimed at promoting the interests of American workers, businesses, and consumers by promoting competition across the economy. It’s also part of USDA’s goals to create a more resilient supply chain and a better food system.

The meat industry took a tremendous hit during the early stages of the COVID-19 pandemic. Many plants were forced to shut down, there were disruptions in the animal supply chain, and higher costs and a labor shortage caused numerous challenges. The influx of USDA funds is intended to help compensate the industry for loses and help expand capabilities. USDA will also provide $150 million to small processing facilities to help them weather challenges resulting from the pandemic and allow them to better compete in the marketplace.

“To shift the balance of power back to the people, USDA will invest in building more, better, and fairer markets for producers and consumers alike,” said Tom Vilsack, U.S. agriculture secretary. “This is a once-in-a-generation opportunity to transform the food system so it is more resilient to shocks, delivers greater value to growers and workers, and offers consumers an affordable selection of healthy food produced and sourced locally and regionally by farmers and processors from diverse backgrounds.”

USDA is also revitalizing the Packers and Stockyards Act, issuing new rules on “Product of USA” labels, and developing plans to expand farmers’ access to new markets, all in an effort to level the playing field.

“Assuming USDA ensures these investments are targeted at increasing for smaller farming and ranching operations to fairly compete, the agency’s plans could have far reaching impacts and signify a momentous step toward leveling the playing field,” Laurie Beyranvevand, director of the Center for Agriculture and Food Systems and professor of law at Vermont Law School, in South Royalton, tells Food Quality & Safety. “The Farm System Reform Act, reintroduced on the heels on President Biden’s E.O., would enshrine into law many of issues advocates hope will be addressed in the USDA’s forthcoming regulations providing clear direction and authority to the agency.”

Opposition to the Funding

Not everyone believes these actions are necessary. The North American Meat Institute released a statement predicting that President Biden’s Executive Order will have unintended consequences for consumers and producers. “Government intervention in the market will increase the cost of food for consumers at a time when many are still suffering from the economic consequences of the pandemic,” says Julie Anna Potts, the organization’s president and CEO. “These proposed changes will open the floodgates for litigation that will ultimately limit livestock producers’ ability to market their livestock as they choose. These proposals have been considered and rejected before and they are counter to the precedent set in eight federal appellate circuits.”

Given the opposition from some in the agricultural sector, USDA’s rule-making process will likely be lengthy and contentious.