Newell butcher gets $5.7 million in latest round of USDA small business grants

The U.S. Department of Agriculture recently pledged about $110 million to smaller and independent meat processors — including one in South Dakota — to expand their capacities in an effort to increase competition in the industry and to give farmers more options.

The federal grants announced on Thursday range in value from about $123,000 for a small custom meat shop in Washington state to $10 million for an expansion of a new producer-owned beef plant in Texas that plans to employ 1,500 people.

U.S. Secretary of Agriculture Tom Vilsack said the grant awards to more than 50 meat and poultry processors are meant to help alleviate the industry’s consolidation over decades that has, at times, decreased profits for farmers and increased prices for consumers.

Making meat local: $32 million flows to South Dakota processors since ’21

“When you have basically 85% of the processing capacity for meat and poultry in the hands of four companies, and you have areas of the country where farmers are given one place to market, and only one place, and they have to take the price … I think it is important and necessary for us to continue to make the investments that we’re announcing today,” Vilsack said in a press call with reporters.

In South Dakota, one business was awarded federal funding.

Midwestern Meat Locker in Newell will get $5.7 million to build a replacement for its 1911 facility, where it processes cattle, hogs, sheep and bison for local producers. The new facility will increase the company’s processing capacity by 300%, double the number of producers it can service, and create five new jobs, according to the USDA grant award listing.

In recent years, the USDA has committed more than $700 million toward similar businesses. The new grant awards are part of the department’s Meat and Poultry Processing Expansion Program and its Local Meat Capacity Grant Program.

Vilsack said the expansions of smaller, independent processors will help make the meat processing industry more adaptable to disruptions — a problem that was exposed in the early months of the coronavirus pandemic when some major meat processors were forced to temporarily shutter their operations because their workers were infected. That led to the mass killings and waste of livestock that had nowhere to be butchered.

“The reality is, during the pandemic, what we learned was that the food system was incredibly efficient, but not particularly resilient,” he said.

Full lists of the recent recipients are here and here.

EDITOR’S NOTE: The Iowa Capital Dispatch contributed to this story.