USDA announces $500 million to expand capacity and increase meatpacking competition

Agriculture
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SIOUX FALLS, S.D. (KELO) — Aid is coming to cattle producers. 

On Friday, the United State Department of Agriculture announced $500 million was being invested as part of American Rescue Plan funds to “expand meat and poultry processing capacity so that farmers, ranchers, and consumers have more choices in the marketplace.”  

More than $150 million will come to existing small and very small meat processing facilities to compete in the marketplace. The USDA is aiming to hold meatpackers accountable by “revitalizing the Packers and Stockyards Act, issuing new rules on ‘Product of USA’ labels, and developing plans to expand farmers’ access to new markets.”

Four companies control more than 80% of the market. They are JBS, Tyson, Cargill, and National Beef. The USDA says 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.

Agriculture Secretary Tom Vilsack said the COVID-19 pandemic “exposed a food system that was rigid.” 

“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,” Vilsack said in a statement. 

Rep. Dusty Johnson (R-S.D.) said in a statement he was “thrilled” about the Small Packer Overtime and Holiday Fee Relief for COVID-19 Act. 

“These USDA announcements are much-needed and frankly overdue for our cattle producers,” Johnson said in a news release. “Producers and members of Congress from cattle country have diligently pushed for a level playing field for small processors to diversify market options outside of the big four for a long time. Today’s announcements may not be the silver bullet to solve all of our problems, but they will certainly get us one step closer to a fairer cattle market.”

In a statement, Sen. John Thune (R-S.D.) said he “applauds” the outcome. 

“While I wish the U.S. Department of Agriculture chose a different funding source, expanding meat processing capacity is exactly what the industry needs. I applaud the outcome, but more work needs to be done. I will continue to look for ways to give smaller packers a stronger position in this market,” Thune said.

At the end of June, Sen. Mike Rounds (R-S.D.) brought together a panel of cattle ranchers and small-town grocery and restaurant owners to talk about how a handful of packing companies steer U.S. beef prices.

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