The USDA will create a $100 million loan-guarantee program to expand processing capacity in the meat industry and improve the infrastructure of the food chain, announced Agriculture Secretary Tom Vilsack on Monday. The program is “focused on the middle of the supply chain,” he said, such as mobile processing units, new cold storage equipment and formation of cooperatives to gather, process and market farm goods.
Vilsack said the loan guarantees were expected to encourage hundreds of millions of dollars in financing. The USDA was “shifting the balance of power back to the communities and small businesses of America by investing in ways we can build more, better and fairer markets for farmers and families alike,” he said.
The Union of Concerned Scientist said the loan guarantees would expand marketing opportunities for livestock producers and create new jobs for processing plant workers. “Right now, it’s nearly impossible for small, independent or new meat and poultry processors to compete with corporate giants like Tyson, Pilgrim’s Pride, Perdue Foods or Sanderson Farms,” said UCS economist Rebecca Boehm.
The $100 million for the loan guarantees will be drawn from $4 billion earmarked by USDA in June to strengthen the food system, including an expansion of local and regional food processing capacity. Vilsack said in July that $500 million would be used to support competitive new entrants into meat processing. The USDA received “extensive” comments on that idea, he said. A framework for the program was expected late this year with applications accepted in early 2022.
Separately, the USDA said farm loans up to $1.825 million would be eligible for its 95 percent loan guarantee program. Until now, the limit on loan guarantees was $1.776 million. Administrator Zach Ducheneaux of the Farm Service Agency said the higher limit “will allow FSA to better meet the financial needs of producers as natural disasters and the pandemic continue to impact their operations.”