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.

The USDA announced a new program to assist hog producers who sold hogs through a negotiated sale during the period in which these producers faced the greatest reduction in market prices due to the COVID-19 pandemic. The Spot Market Hog Pandemic Program (SMHPP) is part of USDA’s Pandemic Assistance for Producers initiative and addresses gaps in previous assistance for hog producers. USDA’s Farm Service Agency (FSA) will accept applications through February 25, 2022.   

SMHPP provides assistance to hog producers who sold hogs through a negotiated sale from April 16, 2020 through September 1, 2020. Negotiated sale, or negotiated formula sale, means a sale of hogs by a producer to a packer under which the base price for the hogs is determined by seller-buyer interaction and agreement on a delivery day. USDA is offering SMHPP as packer production was reduced due to the COVID-19 pandemic due to employee illness and supply chain issues, resulting in fewer negotiated hogs being procured and subsequent lower market prices.  

“Previous pandemic assistance used flat rates across the hog industry, and this didn’t take into account the various levels of harm felt by different producers,” said FSA Administrator Zach Ducheneaux. “We worked closely with industry partners and USDA’s Agricultural Marketing Service to target assistance to hog producers who were hit the hardest during the pandemic. This is one more example of our efforts to provide new, broader, and more equitable opportunities for farmers, ranchers and producers.”  

The Department has set aside up to $50 million in pandemic assistance funds through the Coronavirus Aid, Relief and Economic Security (CARES) Act for SMHPP. 

SMHPP Program Details  

Eligible hogs include hogs sold through a negotiated sale by producers between April 16, 2020, and September 1, 2020. To be eligible, the producer must be a person or legal entity who has ownership in the hogs and whose production facilities are located in the United States, including U.S. territories. Contract producers, federal, state and local governments, including public schools and packers are not eligible for SMHPP.  

SMHPP payments will be calculated by multiplying the number of head of eligible hogs, not to exceed 10,000 head, by the payment rate of $54 per head. FSA will issue payments to eligible hog producers as applications are received and approved.  

Applying for Assistance  

Eligible hog producers can apply for SMHPP starting December 15, 2021, by completing the FSA-940, Spot Market Hog Pandemic Program application. Additional documentation may be required. Visit farmers.gov/smhpp for a copy of the Notice of Funds Availability, information on applicant eligibility and more information on how to apply.  

Applications can be submitted to the FSA office at any USDA Service Center nationwide by mail, fax, hand delivery or via electronic means. To find your local FSA office, visit farmers.gov/service-locator. Hog producers can also call 877-508-8364 to speak directly with a USDA employee ready to offer assistance.  

USDA touches the lives of all Americans each day in so many positive ways. In the Biden-Harris Administration, USDA is transforming America’s food system with a greater focus on more resilient local and regional food production, fairer markets for all producers, ensuring access to healthy and nutritious food in all communities, building new markets and streams of income for farmers and producers using climate smart food and forestry practices, making historic investments in infrastructure and clean energy capabilities in rural America, and committing to equity across the Department by removing systemic barriers and building a workforce more representative of America. To learn more, visit www.usda.gov.  

Check out this week’s video!

Check out this week’s video!

Check out this week’s video!