USDA commits $500m to boost meat processing capacity and competition

The US Department of Agriculture (USDA) has announced an investment of more than $500 million to expand meat and poultry processing capacity, as part of its efforts to increase competition in the market.

The pledge comes after consumers faced limits on meat purchases amid the pandemic last year and forms one of the several steps by the USDA in promoting increased competition in agricultural markets, in order to build a more resilient supply chain and better food system.

According to the USDA, key agricultural markets have become more concentrated and less competitive; with farmers and ranchers having fewer options to sell their products.

The USDA will commit $500 million of its Build Back Better Initiative funds through the American Rescue Plan to support new competitive entrants in meat and poultry processing – meaning farmers, ranchers and consumers have access to wider choices and better prices.

The department will support new meat and poultry processing facilities by providing capital through grants, loans and technical assistances.

Meanwhile, $155 million will be invested into strengthening existing small and very small processing facilities to help them withstand Covid, compete in the marketplace and reach more customers.

“The Covid-19 pandemic led to massive disruption for growers, food workers, and consumers alike. It exposed a food system that was rigid, consolidated, and fragile. Meanwhile, those growing, processing and preparing our food are earning less each year in a system that rewards size over all else,” said US Agriculture Secretary, Tom Vilsack. 

“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.”

In addition, the USDA says it is holding meatpackers accountable by revitalising the Packers and Stockyards Act and is issuing new rules on “Products of USA” labels, meaning domestic farmers and ranchers will not have to compete with foreign companies that mislead consumers. Finally, the department is looking to develop plans to expand farmers’ and ranchers’ access to new markets and promote their ability to receive a fair return.