Grants, loans provide funds to expand capacity for meat processing
Disruption in the food chain and sky-high meat prices in local stores led to frustrations. For those trying to get an animal processed locally for food consumption stressed producers and consumers in 2021. This unprecedented demand for locally processed meat pushed processors to their limits with the outbreak of COVID-19. These businesses worked around the clock to assist farmers to process their animals, but they couldn’t keep up with demand.
In the past two years, funds to help these businesses improve and expand came through the state of South Dakota and the United States Department of Agriculture.
At the state level, Governor Kristi Noem directed $5 million in coronavirus relief funds to the South Dakota Department of Agriculture and Natural Resources for grants to small meat processors to make immediate impacts on meat processing capacity.
Ninety-nine applications, including 16 new facilities and 83 existing facilities, were funded. At the end of December 2021, the program distributed these funds to meat processors statewide. From the $5 million, $1,666,775.93 was given to new facilities, with the remaining $3,333,224.07 going to existing facilities.
In November 2022, USDA Secretary Tom Vilsack said the Biden administration invested $223 million in grants and loans for 33 projects across the country. USDA’s investments in South Dakota come from their Meat and Poultry Intermediary Lending Program and Meat and Poultry Processing Expansion Program.
Loan funds for small and mid-size meat processors
The USDA Rural Development made $150 million of American Rescue Plan Act funding available through the Meat and Poultry Processing Expansion Program for small and mid-size meat processors. In South Dakota, GROW South Dakota learned in November that they received an allocation of $8.125 million through USDA’s South Dakota Meat and Poultry Intermediary Lending Program. The non-profit group will lend the funds to provide average loans of $500,000 per business to benefit new or existing processors.
GROW South Dakota is based in Sisseton and provides programs and loan products to advance housing, community, and economic development.
Mark Nelson, business loan officer for GROW SD, said, “We are starting to process loan applications as people put pen to paper to plan and gather the needed paperwork. “We’ve heard from a mixture of people who are considering establishing new plants and from others looking at upgrades. It’s great that we have projects from both East River and West River. While the deadline for the program isn’t until Sept. 20, 2025, we expect these funds to be allocated in 2023. It’s a revolving fund, so once payments are made, we can lend the money out to other projects.”
He said, “The loans offer an interest rate of 3 to 4 percent, which is pretty appealing. These loans can be for new businesses or existing businesses looking to expand or improve facilities. This could include purchasing land, buying new equipment, or upgrading an existing site to ensure compliance. Those interested can go to our website growsd.org and ‘account login’ to start the application process. Or they can call (605) 698-7654 or email email@example.com or firstname.lastname@example.org”.
While employers struggle to find employees, they could add automated equipment to streamline their processes. And sometimes, newer equipment may make the workplace more attractive to potential workers. Payback will depend on the life of the equipment purchased. All loans will need to be secured with collateral. That could be the land itself, the building or the equipment.
By making the funds available, the program hopes to improve the livelihoods of community residents through job creation and access to fresh meat and poultry products while meeting pollution mitigation by reducing food miles for transportation from local growers initially and ultimately to local markets.
If people are interested and need technical assistance in filling out the forms, they can get help by contacting the Small Business Development Center at sdbusinesshelp.com.
“My parents farm and ranch,” Mark said. “I know from them it’s hard to find space at a processing plant. There used to be a butcher/locker in all the small towns. Most have disappeared. This funding should help to provide ways for new businesses to start or for established ones to take on more work. And it will provide a needed service to the smaller communities which are most in need of local economic development. It’s adding value, without a doubt.”