The Strengthening Local Processing Act (SLPA) is the most comprehensive meat processing bill around, with specific provisions that address competition, demand for local products, and access to value added services in the meat processing sector. It does so by addressing acute issues for processors vital to our supply chain, and by promoting training programs that bolster the resilience of these processors, the farmers they work with, and food access for their communities. Led by Senators John Thune (R-SD) and Sherrod Brown (D-OH) and Representatives Chellie Pingree (D-ME) and Jim Baird (R-IN), this comprehensive solution to some of the greatest barriers facing independent and small-scale producers and processors has garnered strong bipartisan support, in both the House and Senate.
History of Independent Small-Scale Meat Processing
Many of the companies created at the advent of mass meat processing have persisted to today, even if their names and principal owners have changed over time. Despite various waves of antitrust activity over the last century, these companies continue to hold consolidated power over the industry, creating an unequal playing field that boxes out small and medium-sized entities. These large-scale processing companies may provide lower cost products for consumers through their economies of scale and vertical integration, yet they have many downsides. They often have unsafe working conditions and a structure that makes it hard to advocate against these abuses. They leave our meat and poultry processing system and supply chain brittle and slow to move with changing conditions such as climate impacts, communicable diseases, or war-related barriers, all of which our agricultural markets have faced in recent years.
The evolving needs of our food system consequently require agile policy solutions that adapt to the challenges at hand. Hardworking but under-resourced small to midsize processors lack the support and the financial infrastructure in their communities to expand their capacity. Building an array of financing options can enable different processors to provide more diverse services for producers as well.
In recent years, and most noticeably during the supply chain disruptions caused by the Covid-19 pandemic, several agencies within the USDA – including Rural Development and the Agricultural Marketing Service – have helped direct critical funding specifically to small and very small meat processing plants. These investments have supported smaller-scale farmers who are implementing important sustainable practices like organic or highly rotational grazing, and who consequently seek a premium on their product through the sale of whole cuts, local marketing, and processing in line with their raising label or certifications.
Examples of these investments are the Meat and Poultry Programs (MP programs), such as the Inspection Readiness Grant (MPIRG), Processing Expansion Program (MPPEP) and Intermediary Lending Program (MPILP) which have helped smaller plants scale up or prepare themselves for federal inspection utilizing different sized grants and loans. Sustaining funding for these programs is vital to continuing to build a more resilient and agile food system.
NSAC was pleased to see rounds of awards from the MP programs. We also supported funding more agriculture of the middle initiatives, with significant investments to help aggregate small producers and support mid-scale producers. Unlike these other initiatives, SLPA is specifically focused on supporting the smaller ‘mom and pop’ operations that form the cornerstone of local food economies, and local economies as a whole. The Local Meat Capacity and Indigenous Animal Processing Grant Programs, which recently held calls for proposals, will go a long way towards sustaining this goal. The high demand for these two programs, as well as MPPEP, demonstrates a clear need to continue funding programs focused on small meat processors, to better serve the demand from local and sustainable meat and poultry producers.
The history and present-day reality of consolidation in the meat processing sector – coupled with the recent successes in expanding opportunity and support for smaller-scale, independent processing through USDA’s pandemic-era programming – make it clear that the Farm Bill must sustain these investments and permanently authorize programs that build regional processing capacity. The SLPA provides a vehicle for doing so, and enjoys broad support across the agriculture and food sectors for these reasons outlined below.
1. SLPA will address critical workforce shortages and training needs
Currently, many small meat packers across the country, from Minnesota to California are struggling to staff up. They cannot meet the demand for the highly skilled employees they need or find co-owners if they operate an employee-owned cooperative.
To realize the full benefits of the previous taxpayer investment in meat processing capacity expansion, additional training programs are needed to create and sustain the diverse workforce these varied plants require and to help grow the next generation of leaders in the sector.
It is clear highly trained professionals are needed to help run these plants and provide vital services to their local communities – making sure sustainably raised livestock and poultry make it from farm to table. In addition to prioritizing worker training to address immediate workforce shortages, SLPA would also provide grants to support the development of skills necessary for workers to eventually assume cooperative or individual ownership of these plants as well.
“[SLPA] creates an Institutional Career Training Program to work towards building a pipeline of talented individuals interested in making a career out of providing a high-quality and nutritious food source for their fellow Americans.”– US Cattlemen’s Association president Justin Tupper
To do so, SLPA creates two meat processing training program grants that assist and train small plant operators, small plant employees, and the next generation of meat processors and butchers. It does so by supporting training programs in both institutions – such as technical colleges, nonprofits, and worker training centers – and small and very small plants. These two categories allow for flexibility in meeting the sector’s changing needs for workforce training. In each case, SLPA authorizes an annual appropriation of $10 million, a modest amount to launch the program and demonstrate its value over the life of the Farm Bill.
2. SLPA will increase regional and interstate trade and open new markets for local producers
Processors and the producers they serve not only need additional training and support for workforce development, but also easier to access, expanded markets. For producers on the borders of states that do not have appropriately sized plants where they can take their herds to sell into wholesale markets, SLPA would help expand potential markets for them. It would do so by creating incentives for states to create their own Meat and Poultry Inspection programs, or if they already do – incentivize them to join the Cooperative Interstate Shipping program.
“SLPA would also require the US Department of Agriculture to encourage state participation in the Cooperative Interstate Shipment program, which would open access for interstate shipment of meat and poultry, something that isn’t always currently allowed.“– U.S. Cattlemen’s Association president Justin Tupper
Currently, only 29 states have state Meat and Poultry Inspection (MPI) programs, which allow for sale and shipment within the state and which are currently cost-shared equally between the state and Food Safety and Inspection Service (FSIS). SLPA would increase the federal government’s maximum cost share from 50 percent to 65 percent. This would help states with existing MPI programs cover costs and incentivize additional states to establish MPI programs.
States that have MPI programs can also opt into the Cooperative Interstate Shipment (CIS) program which allows for interstate shipment for small plants. Currently, the USDA does not actively solicit participation in the CIS program, nor does it provide the cost breakdowns or the resources available to participating states.
SLPA would require FSIS to conduct outreach to states with state inspection programs that are not part of the CIS program, and to submit a report to the House and Senate Agriculture Committees each year detailing the activities and the results of the outreach conducted.
To further expand participation in CSI, SLPA would increase the amount of total program costs that USDA will cover from 60 to 80 percent. It also would change the small plant eligibility size for participation in this program from plants with less than 25 employees to plants with less than 50 employees. Increasing the size of plants able to be inspected under the CIS program would create new markets for those plants that are on the size and processing capacity cusp and may struggle to achieve federal grant of inspection, but are interested in pursuing larger markets. For a long time, limited intrastate markets have limited the growth of non federally or CIS inspected small and midsize meat processors, especially those that may be located close to the state border.
In addition to creating more market opportunities for processors, SLPA will also increase the amount of state employed inspectors which will mean less inspectors on the federal budget, more money in the states’ economy, and potentially better conditions for the inspectors themselves. For example, this could reduce how far they have to drive and other factors contributing to high turnover in the sector.
3. SLPA will help small, independent processors scale up and stay viable
In various ways, the SLPA takes many of the best parts of the Meat and Poultry programs funded through the American Rescue Plan Act and sustains them at a lower level, but for a dependable amount of time.
From all of the application cycles, it is clear there is a massive demand for these programs – and there will continue to be going into the future. Because of short timelines for the development of plans, applications, and payouts, many of these programs favored ‘shovel ready’ projects. The programs may have been selecting for plants that already had plans for expansion, and not necessarily those plants and areas most in need of investment. Moreover, know from similar payment structures that longer timelines and more dependable grant cycles provide longer-term stability for processors, and the farmers they serve, to feel they can make or plan to make the necessary investments to qualify for these programs.
SLPA authorizes a Processing Resilience Grant Program (PRGP), which would give the Agricultural Marketing Service the ability to continue to invest in currently existing or proposed federally inspected, state inspected, and exempt small and very small plants. This investment could include expanding infrastructure to increase harvest and processing capacity, developing food safety plans, and purchasing new equipment, for example, hide pullers that make it easier for small plants to make use of coproducts such as leather or by products like offal. To target funding to those plants most in need of this support this section limits grants to a maximum size of $500,000 and has a $20 million annual appropriations authorization.
“Strengthening and rebuilding local and regional food systems is an important step in ensuring a robust and resilient food system of the future. Vibrant local processing adds to consumer choices, competition, economic development as well as opportunities for farmers especially small and disadvantaged farmers. It is an important step in our response to the shortcomings in our food supply that the pandemic highlighted.”– Greg Gunthorp, American Grassfed Association Board Member, farmer, processor, sustainable food system advocate extraordinaire
4. SLPA will support a vibrant and competitive livestock and poultry industry
For too long, smaller processing and slaughtering operations have not been provided the resources, financing options, and markets they need to exist. Market consolidation has allowed large meat packers to become overwhelming price makers through alternative marketing agreements, contracts, market power in auction settings, and a variety of other techniques. Over time, proportionally, this lack of competition in the sector has pushed down farmer share of livestock and poultry sales, along with a variety of other factors such as retaliation and antitrust policy.
By responsibly investing in small to mid sized and independent processing operations, we can create markets where meat processors thrive and farmers and consumers can benefit from more companies in competition both over their product and their dollar.
“More local processing capacity means more money in the pockets of farmers and ranchers,” said NFU President Rob Larew, adding that “Building out more and better processing access for ranchers helps them circumvent the processing monopolies while also providing homegrown products to their communities.“
5. SLPA has broad support across industry, party, and place in our food system
Whether they raise cattle, poultry, or other animals such as bison, producers critically feel the need for more slaughtering options and to expand their different product streams. For processors that participate in a certification program, such as organic or pastured, this need is particularly acute. To maintain market certifications, producers must work with processors that comply with the relevant certification standards. These processors are incredibly rare and finding one within a reasonable travel distance from the producer is a consistent challenge. Processors hear this demand but, without many of the solutions the SLPA proposes, lack scale-appropriate financial products to be able to expand meaningfully to serve these niche and local markets.
Farmers, ranchers, processors, local and national organizations all support SLPA, and are working to make sure it is part of the 2023 farm bill.
“The Strengthening Local Processing Act offers necessary resources that small-scale USDA facilities like ours have been advocating for. The appropriate allocation of these resources, as proposed in the Strengthening Local Processing Act, will allow establishments like ours to continue to survive and thrive during these immensely challenging times,” Nichole Sargent, Owner, Southpaw Packing Company, INC. (DBA Windham Butcher Shop), based in Windham, Maine.
“We look forward to working with Senators Brown and Thune and Representatives Baird and Pingree to advance this legislation through Congress.”– US Cattlemen’s Association president Justin Tupper
“The benefit that the Strengthening Local Processing Act will bring to small processors across the country will ensure that the meat industry will be stronger, better connected, and more informed. With regulatory and training assistance, we look forward to seeing this bill pass to help our world’s meat supply.”– Abbey Davidson, American Association of Meat Processors
“NFU is proud to support this bill and will work with our partners to pass it.”–NFU President Rob Larew
State and national farm organizations, ranging from the Ohio Farm Bureau to National Farmers Union endorse this bill. NSAC looks forward to working with Congress and our partners to make sure these critical programs for farmers, ranchers, and the processors that work with them have the support they need to feed our local communities. For more information about the SLPA and to take action to support its inclusion in the 2023 Farm Bill, visit our website.