Vilsack announces $500 million plan to enhance competition, resiliency in food supply chain
U.S. Secretary of Agriculture Tom Vilsack announced plans Friday to launch programs to increase competition in the meat processing industry and resiliency in the food supply chain.
He and Rep. Cindy Axne, D-3rd, spoke Friday afternoon at Rustic Cuts Butcher Shop, 501 Veterans Memorial Highway in Council Bluffs. The press conference happened at about the same time as President Joe Biden signed an executive order he hopes will promote competitive markets across the U.S. economy.
Vilsack said his department will offer grants, loans and guaranteed loans to spark the growth of small and medium-size meat processing plants.
He said Rustic Cuts was an example of what’s possible for a small business selling locally produced food.
“This is an important day for this facility, because it showcases the possibilities,” Vilsack said. “It started as an idea, and now it employs … 21 people.”
It’s also providing market opportunities for area producers, he said.t
When Biden was campaigning, voters voiced concerns about the lack of competition and the impact it was having on producers all across the country, Vilsack said.
A “troubling” statistic is that “89.6% of farms today do not generate the majority of income for the families who own and operate those farms,” he said. “And nearly 50% of our farms literally did not make money in 2019 before the pandemic.
“In the pandemic, we found that our food system and our food supply system, while it is incredibly efficient, is not resilient,” Vilsack said.
When the spread of COVID-19 forced plants to shut down there were disruptions in the market, he said.
“We have got to expand the amount of capacity, the processing capacity, in this country,” Vilsack said. “We can no longer rely on a handful of processing companies to do the job, to make the market competitive, to do right by farmers, to ensure as well that we have a resilient food supply system.
“So we’re breaking new ground today in the Department of Agriculture. We’re making available a minimum of $500 million that will be made available in grants, loans, guaranteed loans and assistance for planning and the organizing that goes into figuring out how to build and increase processing capacity in the United States.”
The program will focus on beef, pork and poultry, Vilsack said. He said he believes that will leverage billions of dollars of additional investment.
“Our belief is that there’s great demand for the grant money, the loan money, the guaranteed loan money and the assistance that we can provide from the USDA,” he said. “And if we’re right about that, then it provides the ammunition that Congresswoman Axne needs to convince her colleagues to provide a more permanent structure for this kind of activity.”
The money will come from funding in the American Rescue Plan designated for increasing supply chain resiliency, Vilsack said.
The department will gather input over the next few months about how to structure the program, he said.
The USDA will also provide $100 million to help small facilities pay for federal inspection fees incurred during the pandemic, Vilsack said.
“Today we’re announcing this plan that will allow facilities that employ less than 10 people with revenues of less than $2.5 million to reduce the cost of federal inspections by 75% starting in October 2020 -- so they’re able to apply for a refund,” he said. For a small facility -- those that employ less than 500 -- they’ll be entitled to a 30% reduction.”
The USDA will also set aside $55.2 million to help small and medium-size processing plants upgrade, Vilsack said.
Axne spoke briefly after Vilsack.
“We’re going to get some local and regional processing going because of the work of the USDA, and we are so lucky to have Secretary Vilsack, our former governor, in the role that he’s in,” Axne said. “Folks, we are at a make-or-break point, I think, when it comes to supporting rural communities across this country."
The development of local and regional processing plants will also benefit other ag industries, she said.
Chad Tentinger, developer of the Cattlemen’s Heritage processing plant proposed for northern Mills County, said, "we believe there is a capacity issue that we need to expand on, and we also believe there’s a lot of young men and women in this industry, a lot of talent, that really want to stay in this business."
“We need to level the playing field and give them an opportunity to be in this business so our farms and future generations can stay here in the business they have grown to love," he said. “Our focus is simply to add capacity, work with farmers and producers and make sure there is always a market -- a profitable market -- for them to participate in."
In response to Vilsack and Axne's visit to Council Bluffs, Republican National Committee spokesperson Preya Samsundar criticized Axne for supporting "regulatory changes, inflation and higher taxes."
"Attempts by Tom Vilsack and the Biden administration to prop up Cindy Axne’s already failing campaign will not erase the fact that Democrats have left family farmers and the ethanol industry behind," Samsundar said.