The Covid-19 pandemic and outbreaks at meat processing plants have triggered huge supply chain problems, leading to meat shortages in grocery stores and higher consumer prices last year.
In response, state and local governments sent more than $ 84 million in coronavirus relief funds (CRF) to butchers, processing plants and farms between April 1, 2020 and June 30, 2021. Just over 40 % of this allocation came from three states: Missouri, Montana and Oklahoma.
Analysis was performed for Forbes using data available from the Pandemic Response Accountability Committee and filtering by keyword.
The grants were allocated out of the $ 150 billion in CRF funds granted to states and large localities in spring 2020 by the CARES law. While federal law provided billions in additional funds for the US Department of Agriculture to support food aid, farmers and ranchers, much of that was used to help farms cover their losses. , not to solve the overall problem.
Federal grants were also lacking in some groups. In particular, most poultry farmers were not eligible for USDA assistance last year because the CARES Act required the farmer to directly own the product. But most poultry farmers work under contract for a large company and do not own the birds. “These growers,” the American Farm Bureau noted, “saw their incomes drastically reduced as many of their barns (which they financed to build and were still needed to repay debt) were left empty due to disruptions. the supply chain earlier in the pandemic. “
The public and local aid distributed shows how governments have used their flexible funding to help the meat industry invest in better infrastructure.
For example, Wyoming Governor Mark Gordon created the Meat Processing Expansion Grant Program, which ultimately awarded $ 4.8 million to 29 applicants to reimburse costs associated with meat processing and increased the capacity.
Frank Schmidt, owner of a processing plant in Cody, said at the time that people traveled as far as 100 miles to his plant last year when meat became scarce. “We were on the verge of exhausting our resources when the subsidy became available,” he said, adding, “it came at the right time to secure regional processing and gave producers a good boost. necessary during a period of uncertainty “.
The demand for assistance specific to supply chain and processing issues was highlighted in Oklahoma. It gave $ 10 million in subsidies to the meat industry last year, but the demand was ten times greater. The state received 195 grant applications totaling $ 103.8 million in requested dollars.
“I recognize that $ 10 million in grants will not solve all of our challenges in the meat processing industry,” Agriculture Secretary Blayne Arthur said at the time. “However, I am confident that this has created a solid foundation for increasing capacity in our state.”
Many states have also been able to fill the poultry farmer deficit. For example, Missouri has awarded more than $ 16 million in grants – the most of any state – designed to support meat and poultry processing operations with fewer than 200 employees to strengthen the chain of state food supply.
In total, governments sent aid to more than 200 companies in the meat industry and the average award amount was $ 166,000.
In the future, more money will be available for the meat industry without governments drawing on their own funds. USDA recently announced plans to invest $ 500 million in US bailout funds to expand meat and poultry processing capacity so farmers, ranchers and consumers have more choices. on the market.
The department also announced more than $ 150 million for existing small and very small processing facilities to help them tackle covid, compete in the market, and get the support they need to reach more customers. .