Vilsack announces grants to help small, mid-sized food producers

By: - June 30, 2023 10:09 am

U.S. Secretary of Agriculture Tom Vilsack announced the U.S. Department of Agriculture’s investment of $115 million toward increasing production at independent meat and poultry processing capacity during a roundtable at Landus Cooperative’s headquarters in Des Moines on June 29. (Photo by Robin Opsahl/Iowa Capital Dispatch)

The U.S. Department of Agriculture will provide $115 million in federal grants to smaller meat and poultry processors as part of their effort to fight industry consolidation, Agriculture Secretary Tom Vilsack announced Thursday.

Vilsack held a roundtable with producers and businesses in Des Moines. He announced 15 awards in 17 states (Nebraska was not among them) aimed at growing independent processing plants’ capacities, starting up new plants and expanding rural workforces.

One of the awards is a $25 million grant for the Cattlemen’s Heritage Beef Company in Mills County. Vilsack said the grant money will be used for equipment at a new facility the company is building in the northwest area of the county.

Grants awarded to 17 states:

  • $5 million to the Morgan County Economic Development Corporation in Colorado
  • $10 million to the Fremont County Economic Development Corporation in Colorado
  • $630,000 to the Berkshire Agricultural Ventures Inc. operating in Massachusetts, New York and Connecticut
  • $15 million to the Indiana Office of Community and Rural Affairs in Indiana
  • $3.8 million to the Maryland Agricultural and Resourced-Based Industry Development Corporation in Maryland
  • $834,000 to the Farmers Union Foundation operating in Minnesota, Montana and Wisconsin and North and South Dakota
  • $15 million to Jobs Now Inc. in Montana
  • $15 million to the Oyate Community Development Corporation in North Dakota
  • $10 million to the Rural Development Finance Corporation in North Dakota
  • $2 million to the South Central Development Company in Ohio
  • $1.5 million to the Spotted Trotter in Georgia
  • $25 million to the Cattlemen’s Heritage Beef Company LLC in Iowa
  • $2 million to the Swift Run Station LLC in Michigan
  • $2.6 million to the Appalachian Producers Cooperative in Tennessee
  •  $6.9 million to TBP LLC in Texas

The grant is part of a $1 billion initiative from President Joe Biden’s administration to make the meatpacking industry more competitive, as currently four corporations process 85% of the nation’s beef supply.

The Cattlemen’s Heritage Beef Company plans on slaughtering roughly a half-million cattle annually. While this figure is well below the multi-millions of cattle processed by groups like Tyson Foods, the administration has argued disrupting industry consolidation will help reduce inflation at the grocery store and bring more of those profits back to the producers in states like Iowa.

Chad Tentinger, the principal developer for Cattlemen’s Heritage Beef Company, said Thursday that part of the organization’s expansion includes plans to create a producer cooperative that will own 20% of the company, as a way to give producers a direct line to profit as well as get better cattle prices.

“This grant will absolutely benefit the small family farmer,” Tentinger said.

The Progressive Ag Cooperative based out of Northwood will receive a nearly $5 million grant for a dry fertilizer facility, and the Landus Co-Up, the organization hosting Vilsack’s visit, is also set to receive a nearly $5 million grant for a facility producing a nitrogen fertilizer.

“This is the new model of additional income sources, of more rural jobs, of a better environment within agriculture, where agriculture is the solution and not the problem,” Vilsack said.

These grants are a part of President Joe Biden’s pitch on “Bidenomics” heading into the 2024 presidential campaign season. Biden this week touted initiatives like the Inflation Reduction Act and the American Rescue Plan that he said helped the American economy recover from the COVID-19 pandemic.

Those policies are focused on helping middle-class Americans and small businesses, Biden said Wednesday. Vilsack told reporters the new USDA investments are focused on helping those same groups in the food industry as a part of the Biden administration’s “Investing in America” agenda.

“While American farmers and ranchers have been responding to the demand to produce more, their communities have struggled to see their share of the benefits,” Vilsack said in a news release.

Vilsack said that in 2022, 89% of all farming income went to 7.5% of farms — a breakdown even the farms benefitting from the current system would likely find unfair, he said. He said small and mid-sized farms are the “muscular core” of the country’s agriculture system, and that these grants go toward strengthening those producers.

There was some discussion of more funding for these projects, but the debt ceiling negotiations stymied some of the USDA’s expected investments, he said. But providing more support to these smaller organizations is necessary to help bring costs of food and agriculture production down, he said, to help combat inflation and prevent situations like the rapid increase in fertilizer costs due to the Russia-Ukraine war from occurring in the future.

“Are we comfortable with a situation where income continues to be concentrated, with the understanding that folks who are large-scale production agriculture have enormous risk financially … or are we big enough and smart enough and innovative enough to basically create another alternative option so that folks can have a choice?” Vilsack said.

The former Iowa governor also said he expects to see Congress to move on a farm bill by the end of the year.

“The interesting thing about agriculture is its under-appreciated aspect of every state economy. You can go to any state in the country and what you’re gonna find is agriculture is the top part of the economy,” he told reporters. “… and as a result of that, I think there’s an understanding and appreciation of the need to get a farm bill done.”

This article first appeared in the Iowa Capital Dispatch a sister site of the Nebraska Examiner in the States Newsroom network.

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site.

Robin Opsahl
Robin Opsahl

Robin Opsahl is an Iowa Capital Dispatch reporter covering the state Legislature and politics. Robin has experience covering government, elections and more at media organizations including Roll Call, the Sacramento Bee and the Wausau Daily Herald, in addition to working on multimedia projects, newsletters and visualizations. They were a political reporter for the Des Moines Register covering the Iowa caucuses leading up to the 2020 presidential election, assisting with the Register's Iowa Poll, and reporting on Iowa's 4th District elections.