USDA unveils plan to help build small meat processing plants

Ranchers also have complained about a system that forces them to negotiate cattle sales with a few corporations that often don’t pay them enough to make a profit, again raising issues of intense consolidation and the need to increase competition in the packing industry.

Vilsack said COVID-19 exposed a food system “that was rigid, consolidated, and fragile.” He said President Joe Biden is determined to shift the balance of power back to the people by investing in building better and fairer markets for producers and consumers.

The money, including the $500 million, comes from the American Rescue Plan, a $1.9 trillion aid package passed by Congress and signed by Biden in March. It will provide grants, loans, and technical assistance to help build new meat and poultry processing facilities. Vilsack said it is his hope to have projects in the works by early next year.

Vilsack said the USDA also plans to initiate a new rule that will make it easier for farmers to sue companies they contract with over unfair, discriminatory or deceptive practices, and will tighten the definition of what it means for meat to be labeled a “Product of USA” to exclude animals that have been raised in other countries but processed in the United States.

The North American Meat Institute, a trade group representing 95{8a924211cc822977802140fcd9ee67aa8e3c0868cac8d22acbf0be98ed6534bd} of United States output of meat and poultry products, rejected some of the assertions made about industry consolidation.

Mark Dopp, senior vice president and general counsel for the organization, said in a letter to USDA officials in June that the coronavirus pandemic sickened workers at meat processors of all sizes, not just the largest.

“Creating smaller, regional harvest facilities will not address this issue,” he said. He added building more processing plants also will not address the labor shortage that is one of the biggest problems facing the meatpacking industry.

He said before the government tries to fix the current system of meat production, it must acknowledge that its efficiencies are responsible for reducing the share of disposable personal income U.S. citizens spend on food from 17{8a924211cc822977802140fcd9ee67aa8e3c0868cac8d22acbf0be98ed6534bd} in 1960 to less than 10{8a924211cc822977802140fcd9ee67aa8e3c0868cac8d22acbf0be98ed6534bd} today.

“This remarkable drop is attributable largely to systemic efficiencies that allow food processors to offer food to consumers at lower prices,” he said.

Vilsack also pointed out that the farmers’ share of every dollar spent on food has declined consistently from 35 cents in the 1970s to around just 14 cents in recent years.

U.S. Secretary of Agriculture Tom Vilsack, right, checks out the meat counter at Rustic Cuts with co-owner Jake Driver, left, on Friday, July 9, 2021 in Council Bluffs, Iowa. U.S. Agriculture Secretary Tom Vilsack announces his plan to spend $500 million to encourage the construction of smaller meat processing plants located closer to farmers who raise chickens, pigs and cows with the goal of diversifying an industry now consolidated among a few large processors. (Joe Shearer/The Daily Nonpareil via AP)

Credit: Joe Shearer

Credit: Joe Shearer

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