US government to invest more than $150m in smaller meat processors

The United States Department of Agriculture (USDA) has announced more than $150 million for existing small and very small meat and poultry processing facilities, to help them weather Covid-19.

It’s part of USDA’s plan to make significant investments to expand processing capacity and increase competition in meat and poultry processing, to make agricultural markets more accessible, fair, competitive, and resilient for American farmers and ranchers.

This is one of several key steps that USDA will take to increase competition in agricultural markets, as a result of President Joe Biden’s Executive Order this week on promoting competition.

USDA American Rescue Plan

USDA announced its intent to invest $500 million in American Rescue Plan funds to expand meat and poultry processing capacity so that farmers, ranchers, and consumers have more choices in the marketplace.

The department also announced more than $150 million for existing small and very small processing facilities to help them through the current health pandemic, compete in the marketplace and get the support they need to reach more customers.

USDA has said that is also holding meatpackers accountable by revitalising the Packers and Stockyards Act, issuing new rules on ‘Product of USA’ labels, and developing plans to expand farmers’ access to new markets.

Agriculture Secretary, Tom Vilsack said: “The Covid-19 pandemic led to massive disruption for growers, food workers, and consumers alike.

“It exposed a food system that was rigid, consolidated, and fragile. Meanwhile, those growing, processing and preparing our food are earning less each year in a system that rewards size over all else.

“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.”

Level playing field for meat processors

USDA has said that the investments in expanding meat and poultry capacity, along with restoration of the Packers and Stockyards Act, will begin to level the playing field for farmers and ranchers.

“This is a once in a generation opportunity to transform the food system so it is more resilient to shocks, delivers greater value to growers and workers, and offers consumers an affordable selection of healthy food produced and sourced locally and regionally by farmers and processors from diverse backgrounds,” Vilsack added.

The announcement by USDA is part of the Biden-Harris Administration’s commitment to fight monopolisation and promote competition across the economy.

In the coming months, USDA has said it will take additional steps to promote competition and make a series of additional investments under the ‘Build Back Better Initiative’, focused on building a better food system.

Monopoly in food sector

USDA said that concentration in food processing has contributed to bottlenecks in America’s food supply chain.

Just a few meatpackers, with a few large processing facilities, process most of the livestock that farmers and ranchers rear for the meat market.

According to USDA, just four large meat-packing companies control over 80% of the beef market alone.