UPDATED 10:12 AM PT – Friday, October 8, 2021
The United States Department of Agriculture (USDA) is moving forward with their plan to stuff $500 billion into the meat and poultry packing industry. Secretary of Agriculture, Tom Vilsack explained his updated plan to Congress while noting he wants make it less rare for small and mid-sized entities to succeed.
“We know that there is a high concentration in this industry,” he stated. “We know that it it creates capacity challenges, especially in beef, and there is a need for additional capacity. That’s one of the reasons why we began the process of establishing a $500 million fund.”
According to Vilsack, the half-a-billion-dollars will be chopped from the American Rescue Plan, which took effect in March. The secretary said his plan is to spare no expense and invest the hundreds of billions of dollars into the livestock industry to enable the U.S. to compete on a global level.
“The goal here is obviously to strike a better balance between supply and demand, between processing capacity and competition, with greater transparency so that we can have a stable, dependent and fair market,” explained the Agriculture secretary. “At the end of the day, our department is anxious to have fair prices for producers and a fair deal for consumers.”
According to Vilsack, the initiative is multi-faceted and will benefit the entire industry. He said if worst comes to worst, he’ll be helping the little guy. The secretary pointed towards a government backed loan guarantee tendered in the program, adding it makes banks more comfortable getting involved.
“These resources would basically make it easier for banks CDFIs (Community Development Financial Institution) to lend the money to have an entity either get started or to expand or to improve their operation,” Vilsack stated. “Right now, many bankers, many CDFIs are not really fully comfortable knowing this area of the middle. And so, the loan guarantee makes it a little bit easier for them to make the loans available across the board, but it’s primarily designed at the middle of the supply chain.”
Vilsack said the framework for his plan is expected to be completed by the end of the year as the department reviews comments it rounded-up from experts in the industry.
“We’re now in the process of analyzing those comments in order to establish and structure the program,” he continued. “The expectation is that that structure will take place sometime before the end of the year, and that we’ll begin to make decisions and investments hopefully in the first quarter of 2022.”
Thank you Chairman Scott, Ranking Member Thompson, and members of the House Agriculture Committee for the opportunity to speak today on issues of upmost important to the livestock industry – ASF, feed costs, consolidation, capacity challenges, and immigration reform. pic.twitter.com/MYjbw2Ebt5
— Secretary Tom Vilsack (@SecVilsack) October 7, 2021
The steaks are high as the government attempts to restart parts of the economy badly hurt by COVID-related government restrictions.