Highlighted by the pandemic, the U.S. Department of Agriculture (USDA) is announcing details of a framework to transform the food system to benefit consumers, producers and rural communities by providing more options, increasing access, and creating new, more, and better markets for small and mid-size producers. Today’s announcement strengthens critical supply chains and address longstanding structural challenges that were revealed and intensified by the pandemic and now disrupted by Russia’s war in Ukraine.
Of special interest to pork producers is the focus on food processing. USDA recognized that consolidated processing capacity created supply bottlenecks and led to a drop in effective plant and slaughter capacity. Small and midsize farmers often struggled to compete for processing access and were left without an avenue for getting their animals to market. Addressing these challenges is key to transforming food systems. Building more distributed, local capacity will help build resiliency in the face of market disruptions, provide more choices for producers to create value-added products and sell locally, and support new economic opportunities and job creation in rural communities. USDA has already made investments to support new and expanded regional processing capacity and address challenges in the middle of the supply chain, including underinvestment in workforce development and barriers to new entry into the sector. Previous announcements include deployment of up to $375 million in support for independent meat and poultry processing plant projects, including phase one of the Meat and Poultry Processing Expansion Program to deploy $150 million in grants up to $25 million each to expand processing capacity through a variety of activities, including but not limited to construction, expansion of existing facilities, and acquisition of equipment. The first phase recently closed, accepting more than 200 applications, representing more than $800 million in funding requests.
Another $600 million in financial assistance to support food supply chain infrastructure that is not covered by the meat and poultry processing program will be deployed to support independently owned and available infrastructure such as cold-storage, refrigerated trucks, and processing facilities. While in short supply but this infrastructure is essential to creating a more resilient food system. USDA will make investments to address the limited processing, distribution, storage, and aggregation capacity for a variety of food sectors, including high equipment costs, lack of competition, and limited supply chain and value chain coordination.
Read the press release in full here.