Published August 24, 2021
The USDA has committed to investing $500 million “to improve infrastructure, increase capacity, and hasten diversification” in meat and poultry processing. The agency is seeking public comments through Monday, August 30, on how they should spend that money, and specifically seeking responses to a list of questions.
The USDA’s announcement states that the agency “is looking at existing programs, combinations of programs, and potentially new programs that can leverage the federal funds in combination with other funding sources (e.g., state and local investment, private, or philanthropic investment) to expand and diversify meat and poultry processing capacity and make the supply chain more resilient. In addition, USDA is considering how to incorporate other priorities – including climate, racial equity, creating good-quality jobs and support for underrepresented communities – into these programs. While USDA has identified a general direction to target these …, we have a number of specific questions related to implementation.”
You can read the agency’s notice, which includes its questions, at Investments for Meat and Poultry Processing Infrastructure.
If you are a livestock producer, meat processor, want to open a processing plant, or otherwise have worked in this field, we urge you to look through the questions & respond. Don’t try to cover all of them; it will be overwhelming! Just pick those that are most important to you.
Although many of the questions require knowledge about the processing industry, some of them implicate broader public policy concerns – and thus anyone can submit comments. We encourage everyone to consider the questions we copied below and submit their comments to USDA. We’ve provided sample comments on each of these questions, but you will have the greatest impact if you put them into your own words. Again, you don’t need to address all of these – pick the ones that matter to you!
You can also read the comments FARFA submitted to the USDA.
USDA: What competition challenges and risks might new entrants face from high levels of market concentration or other relevant market conditions, and how can USDA and other federal government agencies assist new entrants in mitigating those risks?
Sample Response: The best way to address the risks to small-scale processors is to address the broader reasons for the consolidation. The bottlenecks in processing, marketing, and distribution are interconnected. This market consolidation is sustained by: (1) the failure to aggressively enforce anti-trust laws; (2) allowing large entities to externalize many of their costs, including their environmental and human health impacts, and thus enabling them to achieve significant profits from artificially cheap meat; and (3) the lack of transparency that enables so many consumers to be misled about where, how, and by whom the products they see in the grocery stores were raised. New entrants can’t mitigate those risks – USDA and the other agencies must take action to enforce anti-trust laws, require internalizing of all costs (such as by requiring CAFOs to pay for the environmental damage they cause and slaughterhouses to slow down their line speeds to prevent worker injuries), and develop more transparent labeling (such as by implementing mandatory Country of Origin Labeling).
USDA: Should USDA have the ability to block the sale of processing facilities built or invested in through federal funds to large or foreign-owned corporations? What other options should USDA consider in order to prevent new, expanded, and successful facilities from being acquired by the large corporations whose consolidated operations can suffer from bottlenecks and create significant supply chain vulnerabilities?
Sample Response: Yes, USDA should include a prohibition on the sale of a processing facility that receives funds to large or foreign-owned corporations. I urge the agency to impose a 10-year ban on such sales, to ensure that the infrastructure necessary for local and regional producers is not simply bought out by Big Agribusinesses in order to undermine competitive markets, as has occurred in the seed industry.
The USDA should also limit these investments to facilities with fewer than 200 employees.
USDA: How can USDA support access to processing services for smaller-scale producers? Are there opportunities for producers to engage in cooperatives or collaborative arrangements with each other or other facilities, to both ensure access and provide a sufficient supply for a plan to operate?
Sample Response: While cooperative and collaborative arrangements carry many benefits, they should not be necessary for producers to access necessary infrastructure for their businesses. USDA should not be in the businesses of encouraging specific business structures, but instead should look at what agency actions are needed – both in this investment process and in its regulatory policies and procedures – to provide scale-appropriate opportunities to small producers.
For example, USDA should:
- Create scale-appropriate regulations for very small poultry plants, which are particularly in short supply. This should include revising the verification process so that very small plants do not have to disproportionately test their products for Salmonella and Campylobacter.
- Revise the policy governing custom exempt processors, so that small producers can more realistically utilize them for pre-sold orders. Specifically, remove the requirement that the custom processor divide the meat for the individual owners.
USDA: What conditions should be included related to the sources of materials being used to construct or expand the facility (e.g., buy American)?
Sample Response: While we support efforts to buy American at every stage of the supply chain in every industry, such a requirement for small-scale processors would be counterproductive. Consider the context: Right now, the vast majority of our meat supply is provided by massive international businesses who frequently import foreign meat, export processing needs, and in numerous other ways fail to support American businesses. The small-scale processors and the small producers they serve are inherently more supportive of American businesses, by the simple fact of being small businesses located primarily in rural communities. Requiring these small businesses to take on the extra expense and logistical burdens of only sourcing American building supplies, when no such requirement is imposed on the big meatpackers, would be counterproductive.
The deadline to comment is August 30. Even a short comment that tackles just one of the questions is valuable!
How to Comment
- Go to the Federal Register at Investments and Opportunities for Meat and Poultry Processing Infrastructure.
- Open the “Submit a Formal Comment” box and type the comment you want to submit.
- You do not have to provide your name if you do not want to, though it is preferable.
- Submit the Comment by clicking “continue.”