USDA is working to build a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain
White House Factsheet
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USDA investing $1B in expanding meat and poultry processing capacity
In July 2021, USDA issued a Request for Information (RFI) to solicit public input into its strategy to improve meat and poultry processing infrastructure and will hold targeted stakeholder meetings and other public engagement to better understand the needs, gaps, and barriers to fair and competitive meat processing markets.
USDA received nearly 450 comments in response to the Request for Information.
- Open Programs
Meat and Poultry Processing Expansion Program – Phase 2
The Meat and Poultry Processing Expansion Program—Phase 2 (MPPEP) is providing up to $123 million in grants to help eligible processors expand their processing capacity, which create new, better and more processing options for meat and poultry producers. USDA Rural Development designed the MPPEP to encourage competition and sustainable growth in the U.S. meat processing sector, and to help improve supply chain resiliency. Entities that engage or plan to engage in meat and poultry processing, including private, non-profit, tribal, cooperative, state or local government, among other entities. Applications will be accepted until November 22, 2023.
Meat and Poultry Processing Technical Assistance
The Meat and Poultry Processing Technical Assistance (MPPTA) program ensures that participants in USDA’s Meat and Poultry Supply Chain initiatives have access to full-range technical assistance to support their project development and success. USDA’s Agricultural Marketing Service (AMS) is investing up to $25 million to establish a nationwide MPPTA network of support in four key areas: federal grant application management, business development and financial planning, meat and poultry processing technical and operation support, and supply chain development.
AMS has cooperative agreements with six non-profit organizations to serve as TA providers for the MPPTA program with the Flower Hill Institute serving as the overall Technical Assistance Coordinator. Interested parties are encouraged to reach out directly to the Flower Hill Institute to discuss their technical assistance needs.
Reduce Overtime and Holiday Inspection Costs for Small and Very Small Processing
In the American Rescue Plan Act (ARPA), Congress provided the Food Safety and Inspection Service (FSIS) with $100 million to support small and very small establishments by reducing overtime and holiday inspection fees. As of June 2023, over 2,900 small and very small establishments have benefited from the program.
The unused ARPA funds for overtime and holiday inspection fees were rescinded as part of the debt ceiling agreement. FSIS will continue the program through the end of September 2023, and will keep stakeholders updated on the future of the program beyond this date.
- Pending Award Announcements
Local Meat Capacity Grant (Local MCap) Program
The Local MCap grant program is targeted to support meat and poultry processors with smaller-scale projects, with a goal to increase processing availability and variety for local and regional livestock producers. Local MCap complements the Meat and Poultry Processing Expansion Grants administered by Rural Development by providing a targeted program for smaller-scale projects using a streamlined application. Smaller-scale projects eligible for this program include equipment purchases and installation, facility and equipment upgrades, minor alterations and renovation, and capacity expansion. Smaller-scale projects eligible for this program include equipment purchases and installation, facility and equipment upgrades, minor alterations and renovation, and capacity expansion. Simplified Equipment Projects will support purchase of equipment between $10,000 and $250,000.
Indigenous Animals Harvesting and Meat Processing Grant Program (IAG)
The IAG grant program is designed to support the priorities of Tribal Nations in meeting the needs of traditional harvesting methods and indigenous animals. This project intends to fund projects which invest in Tribal Nations’ supply chain resiliency, indigenous animals, restoring local indigenous food systems, and indigenous processing methods, and expanding local capacity for the harvesting, processing, manufacturing, storing, transporting, wholesaling, or distribution (communal or commercial) of meat, poultry, seafood, and other animals that provide culturally appropriate food and food security to tribal communities. The primary purpose of all projects must be to expand or enhance indigenous animals and meat processing capacity in Indian Country.
- Award Announcements
Food Supply Chain (FSC) Guaranteed Loan Program
The FSC Guaranteed Loan Program used American Rescue Plan funding to guarantee more than $750 million in guaranteed loans. The program supported new investments in food infrastructure to increase capacity and create a more resilient, diverse, and secure U.S. food supply chain.
These funds were designed to back private lenders that finance independently owned food systems businesses, specifically for the start-up or expansion of activities in the middle of the food supply chain. Building a more distributed and resilient food system requires independent producers to have access to food aggregation, processing, manufacturing, storage, transportation, wholesaling, and distribution infrastructure that enables them to move their product throughout the supply chain.
This program is now closed and is no longer accepting applications.
A list of FSC GL awardees is available on the FSC GL Awarded Grants webpage (PDF, 591 KB).
Meat and Poultry Intermediary Lending Program (MPILP)
The USDA RD Rural Business and Cooperative Service (RBCS) has awarded $167 million in grants to 15 eligible lenders in the Meat and Poultry Intermediary Lending Program (MPILP) to date. Awards established revolving loan funds to increase access to capital for processors who want to start or expand processing capacity for meat and poultry. Awards funded projects in 12 states and range from $2 million to $15 million. The objective of the MPILP was to strengthen the financing capacity for independent meat and poultry processors, and to create a more resilient, diverse, and secure U.S. food supply chain.
A list of MPILP awardees is available on the MPILP Awarded Grants webpage (PDF, 401 KB).
Meat and Poultry Processing Expansion Program – Phase 1
The USDA RD Rural Business and Cooperative Service (RBCS) has awarded $146 million in grants to 30 projects through the first phase of the Meat and Poultry Processing Expansion Program (MPPEP). This program provides grants to help eligible processors expand their capacity. USDA Rural Development designed MPPEP to encourage competition and sustainable growth in the U.S. meat processing sector and to help improve supply chain resiliency.
Facility expansion and improvements funded through MPPEP will promote competition and give more and better options to producers by increasing meat and poultry processing capacity. The goal of MPPEP is to focus on projects in late stage of development to make the fastest impact on producers, consumer, and the meat and poultry supply chain. More information about the program can be found at the following link: Biden-Harris Administration Announces First Round of Historic Investments to Increase Competition and Expand Meat and Poultry Processing Capacity
Meat and Poultry Inspection Readiness Grants – Round 2
The USDA Agricultural Marketing Service (AMS) awarded an additional $21.9 million in grants to 111 grant projects through the Meat and Poultry Inspection Readiness Grant Program (MPIRG), bringing total funding to $54.6 million. This second round of awards will fund projects in 37 states and will help strengthen and develop new market opportunities for meat and poultry processors throughout the United States.
Facility improvements and expansions funded through MPIRG will help processors obtain a Federal Grant of Inspection under the Federal Meat Inspection Act (FMIA), the Poultry Productions Inspection Act (PPIA), or to operate under a state’s Cooperative Interstate Shipment (CIS) program that will allow meat and poultry processors to ship products across state lines, develop new markets, increase capacity, and better meet consumer and producer demand along the supply chain.
MPIRG recipients and other eligible participants, especially small and underserved stakeholders, in USDA’s Meat and Poultry Supply Chain initiatives are encouraged to take advantage of the broad technical assistance offered through USDA’s Meat and Poultry Processing Capacity Technical Assistance Program (MPPTA). AMS has cooperative agreements with six organizations to form the MPPTA network, which has already provided valuable assistance to over 300 businesses and organizations across the U.S. and its territories since its launch this year in March.
For more information about this technical assistance and the organizations involved, and to initiate a request for assistance, visit AMS’s MPPTA Webpage.
Meat and Poultry Inspection Readiness Grants – Round 1
In its first round of funding for the Meat and Poultry Inspection Readiness Grants (MPIRG) Program, the USDA Agricultural Marketing Service (AMS) awarded $32 million in grants to 167 meat and poultry slaughter and processing facilities to support expanded capacity and efficiency.
With this grant funding, meat and poultry processing businesses can cover the costs for improvements such as expanding existing facilities, modernizing processing equipment, and meeting packaging, labeling, and food safety requirements needed to achieve a Federal Grant of Inspection under the Federal Meat Inspection Act (FMIA), the Poultry Productions Inspection Act (PPIA), or to operate under a state’s Cooperative Interstate Shipment (CIS) program. These changes will allow these facilities to serve more customers in more markets.
Meat and Poultry Workforce Development Program
USDA’s National Institute of Food and Agriculture (NIFA) is awarding specified universities grants of up to $15 million to support agricultural workforce training for historically underserved communities. This investment will develop or enhance existing meat and poultry programs through 1890 Land-grant Universities Centers of Excellence ($4M), 1994 Land-grant Colleges ($4M), Alaska Native and Native Hawaiian ($2M), and Resident Instruction Grants Program for Institutions of Higher Education in Insular Areas ($1M). Hispanic-serving Institutions have a competitive process to access $4 million in grants. Additionally, an investment of $5 million is directed to and will be split equally between Extension Risk Management Education and Sustainable Agriculture Research Education programs. Further, an investment of $3 million was awarded to qualified community colleges to support meat and poultry processing workforce development programs. Work in these programs supports development of meat and poultry processing training and educational materials for place-based needs, particularly relevant to small- or medium-sized farmers and ranchers.
Meat and Poultry Processing Innovation
USDA invested an estimated $20 million in research and development to help independent business owners, entrepreneurs, producers, and other groups, such as cooperatives and worker associations, create new or expand existing processing capacity. This included 14 awards to small businesses to conduct Meat and Poultry Processing Research and Innovation and one award to the University of Arkansas to develop the Center for Scalable and Intelligent Automation in Poultry Processing. These investments are designed to improve and increase access to new and emerging innovative practices and technologies.
USDA strengthening the rules and enforcement to support farmers and ranchers
In 2021, President Biden issued an Executive Order on Promoting Competition in America’s Economy that directed USDA and other agencies to robustly police U.S. markets, including in agriculture, where “consolidation... is making it hard for small family farms to survive.”
- A Plan In Support of Fair and Competitive Markets
USDA has published the report, “Agricultural Competition: A Plan In Support Of Fair And Competitive Markets” that sets out USDA’s strategies to increase competition through investing in new competitors to address major bottlenecks in the food and agricultural supply chains, in particular meat and poultry processing and domestic fertilizer capacity. It also highlights USDA’s comprehensive efforts to reinvigorate competition and fair market regulation and oversight, and USDA’s efforts to enhance value-added competitive opportunities for producers, including the already-announced top-to-bottom review of the “Product of USA” label for beef and a newly announced review of animal-raising claims, among many other strategies and efforts.
- Partners in Fair and Competitive Markets
USDA takes seriously our obligations to work closely with our partners at the Department of Justice, Federal Trade Commission, Commodity Futures Trading Commission, and other White House Competition Council member agencies, to fully utilize laws and regulations already on the books, and to bring bad actors to account.
USDA-DOJ have developed a portal called Farmer Fairness where you can file a complaint or tip if you suspect a violation of the Packers and Stockyards Act or any other Federal law governing fair and competitive marketing and contract growing of livestock and poultry.
- A Modern Set of Packers and Stockyards Rules
USDA is preparing new proposed rules under the Packers and Stockyards Act to address poultry contracting and tournaments, unfair practices and undue preferences, and the harm to competition burdens from the courts. USDA withdrew the pre-existing inactive rule on tournaments in order to restart open dialogue with stakeholders and put forward a revamped rule in 2022.
USDA is working to promote transparency in poultry production contracting and to give poultry growers and prospective poultry growers relevant information with which to make business decisions.
USDA has proposed revisions to the regulations under the Packers and Stockyards Act to revise the list of disclosures and information live poultry dealers must provide to poultry growers and sellers as part of poultry growing arrangements and to establish additional disclosure requirements to determine settlement payments for poultry growers in connection with the use of poultry grower ranking, or tournament, systems by live poultry dealers. USDA seeks public comments to this proposed rule.
USDA issued the proposed rule, Inclusive Competition and Market Integrity, in the Federal Register on Oct. 3, 2022. The comment period has been extended 45 days and will end on Jan. 17, 2023. The original comment period was 60 days, which ended on Dec. 2, 2022. The proposed rule would revise regulations under the P&S Act by prohibiting certain prejudices and disadvantages against covered producers in the livestock, meat, and poultry markets. The regulations would identify retaliatory practices that interfere with lawful communications, assertion of rights, and participation in associations, among other protected activities. The regulations would also identify unlawfully deceptive practices that violate the P&S Act with respect to contract formation, contract performance, contract termination and contract refusal. The purpose of the rule is to promote inclusive competition and market integrity in the livestock, meat, and poultry markets. All comments submitted will be considered as USDA develops a final rule.
USDA issued an Advance Notice of Proposed Rulemaking in the Federal Register on June 8, 2022, with a 90-day comment period, that ended Sept. 6, 2022. The ANPR was issued to gather comments and information to help USDA develop policy and future rulemaking proposals regarding the use of poultry grower ranking systems commonly known as tournaments in contract poultry production. USDA sought this input in response to numerous complaints from poultry growers about the use of tournament systems. Comments in response to this request would help USDA tailor further rulemaking in addition to that already planned and under way to address specific industry practices in relation to tournament systems. During the initial comment period, USDA reopened the comment period on Sept. 9 after receiving requests from industry organizations asking for additional time to submit comments, citing the breadth and complexity of the questions and concepts presented for comment. The additional comment period closed on Sept. 26, 2022.
Even while the new rules are being crafted, USDA is committed to the enforcement of the Packers and Stockyards Act to the maximum extent possible under current conditions. In August 2021, USDA announced a new enforcement policy that represents a significant pivot from the 2020 undue preferences rule and highlights how we intend to enforce the Packers and Stockyard Act to the maximum extent possible even while the new rules are being completed.
- Product of USA/Consumer Transparency
USDA is already hard at work clarifying the “Product of USA” label for beef. As USDA noted in its announcement, American consumers depend upon accurate, transparent labels to obtain important information about the food they consume. American farmers and ranchers depend upon those same labels to convey information about their products that consumers value and demand. USDA is working to conduct consumer testing and economic analysis to support a rulemaking on the voluntary “Product of USA” label.
- Price Transparency and Fairness in Livestock Trading
USDA remains committed to enhancing the transparency, price discovery function, and the fairness of the livestock markets using traditional Livestock Mandatory Reporting (LMR) tools. In August of 2021, AMS through its Market News service announced two new reports that enhanced transparency in cattle markets for cattle traded today through contractual arrangements outside of the cash negotiated spot markets. And more research is underway to evaluate whether additional forms of transparency may further enhance market functioning.