PIERRE, S.D. (KELO) — South Dakota’s need for more meat processing has Governor Kristi Noem’s attention. The daughter of a Hamlin County farm family wants the Legislature to let her establish a grant program in what soon-might-be the state Department of Agriculture and Natural Resources.
The governor seeks to tap $5 million of a one-time surplus that state government is predicted to see, in part from an unexpected bump in sales tax revenue driven by billions in COVID-19 relief flowing from Congress into South Dakota’s economy and state and local governments.
“A key vulnerability that the pandemic exposed is that our nation and our state does not have enough processing capacity to meet demand. As we’ve seen, this can lead to disruptions for producers and consumers,” she told lawmakers in her December 8 budget address.
South Dakota doesn’t have such a program now, and the governor’s proposal would be a one-time effort, according to Brian Walsh. He’s communication director for the two agencies the governor wants the Legislature to let her merge — the Department of Agriculture and the Department of Environment and Natural Resources.
“The goal of the proposed grant program is to assist South Dakota’s small meat processors responding to market and workforce disruptions due to COVID-19 by providing funds to make immediate impacts on their capacity to process or store South Dakota-raised protein products. Many of our small processing plants are booked for months or even years into the future,” Walsh told KELOLAND News in an email.
He added, “The grant program will help increase local meat processing capacity and provide additional market opportunities for livestock producers and jobs in rural communities.”
The governor and her commissioner of economic development, Steve Westra of Sioux Falls, already are using another state-government incentive program to also drive rural growth. They’re having projects such as feedlots sign over reinvestment payments — essentially partial or full refunds of state sales taxes — to county governments to help spur local economic development.
Noem’s 2018 campaign for governor included a detailed set of agricultural proposals, including ensuring South Dakota continues to have a “vibrant” State Fair; she also called in her December 8 speech for $12 million to help build a new $19 million livestock complex at the fairgrounds in Huron to replace the beef complex that fire destroyed this year.
Walsh said the proposed meat-processing grants program’s final criteria are still being developed, but he expects applications would come from small meat processors, such as state-inspected ‘equal to’ slaughter or processing plants, licensed custom-exempt slaughter plants, or small and very small federally inspected plants.
Eligible expenses would include items such as coolers and freezers, temporary cold storage, portion cutters, processing equipment, waste treatment systems, slaughter equipment and animal holding equipment, he said, and grants would be allocated by tiers that are still in development. There currently are 84 state-licensed meat establishments and 18 federally-inspected plants.
“If the program is approved we plan to move forward quickly with the application and award process so the funds can be used in 2021,” Walsh said.
The governor needs the Legislature’s approval because the $5 million requires an appropriation.