Over the past few decades, the meat and poultry processing sector has dramatically shifted. Large companies now dominate the market and are starting to squeeze out smaller producers and entrepreneurs trying to compete. This has caused two problems: farmers are now making less by selling to these middlemen, and consumers are paying more for meat and poultry at the grocery store.
In fact, four meat-packing companies control 85 percent of the beef market. The top four poultry processing companies control 54 percent of the poultry market, and the top four pork processing companies control 70 percent of the pork market. This shift in the market has significantly decreased the amount of competition among farmers and lessened Americans' number of choices at the grocery store.
What Is The USDA's $215 Million Initiative In 2022?
The USDA is making plans to change this limiting narrative. On February 24th, the USDA announced that it would be making up to $215 million available for grants and other resources to expand the meat and poultry processing industry. This action is designed to do three things:
- Strengthen the food supply chain
- Create jobs and economic development in rural areas
- Level out the playing field among meat and poultry producers in America
This funding opportunity comes just one year after President Biden's Executive Order 14017. This Executive Order called for a more resilient, diverse, and secure supply chain to foster economic growth and prosperity among our nation's farmers and agricultural producers.
The recent move also aims to increase the amount of competition by making the meat and poultry markets more accessible to new farmers and smaller entrepreneurs to enter the market and start to compete with the larger producers.
$40 Million Additional USDA Dollars for Workforce Development
In addition to the $215 million invested by the USDA, the National Institute of Food and Agriculture plans to invest $40 million through existing workforce development programs to generate a supply of well-trained food processing workers to meet the new demand for these jobs. These programs will be implemented primarily by training and educating young men and women at community, junior, and technical colleges specializing in meat and poultry processing programs to prepare them for careers in the agricultural industry.
This influx of skilled workers into the industry will increase the efficiency of current meat-packing procedures while also providing stable and well-paying jobs to a new part of the American workforce. It will also aid in the USDA's mission to increase competition in the market and provide consumers with more choices for meat and poultry at the grocery store.
Additional initiatives will use existing USDA networks and establish new Centers of Excellence at Minority-Serving Institutions, which will focus on research, education, and training for current meat and poultry producers. These initiatives are part of a continued effort to support the development of high-paying jobs in the agricultural industry and foster competition among existing meat and poultry processors.
Additional Expansion Of Independent Processing Capacity
This initiative by the USDA will also create a more resilient and robust food supply chain by deploying financial support for projects that aim to expand the independent processing capacity of current meat and poultry producers.
The financing systems of current independent processors are another target of the USDA with their initiative. The department plans to work with lenders to increase the amount of capital available for independent processors that need credit to expand their production facilities. Not all lenders will work with agricultural producers, so increasing the network of financial resources for meat and poultry producers will allow these processors to expand operations at a sustainable pace in the future.
Additional Technical Assistance
The USDA also recognizes that advances in the industry need to come from a technical perspective as well. That's why they are providing an additional $25 million in American Rescue Plan funding to partner with organizations that can enhance the technical capabilities of meat and poultry processors. These organizations will provide meat and poultry producers with the training and resources needed to grow their business using modern technology specialized for agricultural and meat production uses.
USDA plans to use $10 million to implement the first phase of the operation to establish the initial technical assistance network and a lead coordinator for the program. Meat and poultry processors can communicate with the lead coordinator directly for any questions or issues they have in the future.
What The $215 Dollar USDA Ruling Means For Meat Producers
While the meat and poultry market shift has largely been beneficial for the few companies who dominate the sector, the recent initiatives by the Biden-Harris Administration and the USDA make it clear that supporting local producers is a priority for the Administration moving forward.
These initiatives address the short-term supply chain disruptions that we've seen since the pandemic started while also paving the way for a new generation of meat and poultry processing workers with skilled training and educational resources available to everyone.