This week, Virginia Farm Bureau participated in a roundtable discussion hosted by Congresswoman Abigail Spanberger, with USDA Under Secretary for Rural Development Xochitl Torres Small, USDA Under Secretary for Marketing and Regulatory Programs Jenny Moffitt, and USDA Rural Development Acting State Director for Virginia Terry Rosta. The officials led a conversation with local cattle producers and processors and agriculture organizations on the challenges associated with expanding meat processing capacity.
Fueled by a high consumer demand for local meat, farmers across Virginia are experiencing extreme backlogs at local slaughter and processing facilities, with most completely booked for six months to a year or more. While this may seem like an opportunity for new businesses, the roundtable discussion highlighted barriers to entry, including the difficulties in securing capitol for high upfront investment costs, finding specialized labor, competing with market concentration, dealing with unfavorable local zoning ordinances and gaining access to technical assistance to navigate regulatory hurdles.
This event was related to the recent announcement of the Food Supply Chain Guaranteed Loan Program, part of USDA’s Build Back Better initiative to strengthen critical supply chains and our food system. The program guarantees loans of up to $40 million for qualified lenders to finance food systems projects, specifically for the start-up or expansion of activities in the middle of the food supply chain. Of note, of the $100 million allocated to the program, 19% is specifically reserved for meat and poultry processors. This new program was inspired by legislation introduced earlier this year by Congresswoman Spanberger and co-patron Congressman Dusty Johnson of South Dakota, called the Butcher Block Act. Interested borrowers should discuss the Food Supply Chain Guaranteed Loan Program with their preferred lenders.
In addition, in July 2021, USDA announced $500 million for expanded meat and poultry processing capacity as part of efforts to increase competition, level the playing field for family farmers and ranchers and build a better food system. For processors interested in expanding, this included over $55 million for Meat and Poultry Inspection Readiness Grants to help facilities come in compliance with federal and state inspection standards. While the initial application period has passed, a second grant round is expected.