The USDA has announced a new round of funding totaling $60 million for the Meat and Poultry Processing Expansion Program. This initiative, stemming from the American Rescue Plan Act (ARPA) with an initial $150 million, aims to address consolidation in the meatpacking industry. Secretary of Agriculture Brooke Rollins emphasized that this plan is a crucial step towards rebuilding the domestic beef industry by removing regulatory hurdles and providing support to smaller plants.
A significant change in this funding round is the allocation of half of the $60 million to "intermediate" plants, defined as those with 500 to 3,000 employees. The remaining half will be split between "small" and "very small" plants. This prioritization of intermediate plants has raised concerns among some groups, like the National Sustainable Agriculture Coalition (NSAC), who believe these larger businesses often have better access to capital and do not face the same financial challenges as smaller processors.
The USDA's plan also includes regulatory actions, such as a rulemaking process initiated by the Food Safety and Inspection Service (FSIS) to redefine plant size categories, potentially based on production volume rather than staff count. Additionally, the USDA is working to expand a program that allows more states to handle inspections of their smaller plants, which is seen as beneficial for these businesses. The broader goal is to strengthen rural supply chains, create jobs, and offer more processing options for livestock producers, particularly as major facilities have closed.
This move by the USDA comes amid ongoing efforts to address anticompetitive practices in the meat industry. The Justice Department has been investigating beef companies for potential antitrust violations, an investigation highlighted by Secretary Rollins. This follows previous calls for investigation by the Trump administration into rising beef prices and market manipulation. Record-high beef prices, a shrinking U.S. cattle herd (the smallest since 1951), drought conditions impacting feed costs, and border closures affecting livestock imports are among the other factors contributing to the challenges in the beef sector.
