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South Dakotans ask for CARES Act funding to help increase processing options

South Dakota’s ranchers are adamant: We have the beef. But a new battle cry has become popular in recent months: We need more processing capacity.

Some South Dakotans think they may have discovered at least a partial solution to the problem: federal CARES Act funding.

With $1.25 billion dedicated to the Mt. Rushmore State, lawmakers, ranchers and meat plant owners say they’d like to see some of that funding dedicated to upgrading existing local meat lockers, meet requirements to secure USDA inspection or train poetential employees.

The idea is not new. Montana’s governor announced this spring a similar effort, and 62 Montana plants have received grants of $150,000 or less, to be used for equipment and infrastructure that increases processing and/or storage capacity, and other business adaptation and diversification activities. North Dakota is doling out $2.7 million of their CARES Act funding for meat plant upgrades and equipment in 46 facilities, said the Bismarck Tribune.

Julie Frye-Mueller, a state representative from Rapid City, said she would like to see South Dakota offer CARES Act funding to meat processors across the state who might need structural improvements that would allow them to process more critters, and some kind of employee funding assistance as well.

Across the entire nation, as Americans searched for something they could cook for their families during the differing stages of the “lockdown,” beef was a hot commodity. Many grocery shoppers reported finding empty meat shelves, or overpriced beef products due to a strong demand and limited supply from meat processors, which were running at less than full capacity because of sick workers. Cattle producers have the cattle, but the bottleneck in available local processing was – and still is – preventing South Dakota ranchers from getting South Dakota beef to South Dakota consumers.

“The wait lines are so long now to get a beef processed. They don’t have the manpower, they don’t have the people who can work,” she said.

Black Hills Meat Company owner Cody Pekron echoes this concern.

“I am looking to expand,” explains the Hot Springs, South Dakota, meat plant owner. “Funding would definitely be a help,” he said, explaining that he is in the process of securing bids on a new cooler. The challenge of finding competent help is equal to the challenge of needing structural improvements, he said.

“The problem is finding people who want to do it, are willing to do it and know how to do it,” he said.

Pekron suggests that the some funding could be set aside for some kind of apprenticeship program where the plant owner pays a trainee minimum wage, and the government pays some additional wages during the training process. Once the “apprentice” is trained and ready to take on responsibilities, the plant would accept responsibility for his or her entire paycheck.

Pekron currently kills about 6 head of beef per week and with the cooler space he is looking at adding, he could probably handle about 12 per week. He said with the cutting space he has, he could eventually slaughter and process around 24 head per week if he had the cooler space and manpower.

Black Hills Meat Company recently became a state-inspected plant, so the company sells meat from local animals it purchases and butchers. Pekron said he also occasionally buys certain cuts of beef from a larger beef processor, to keep up with demand for specialty cuts like ribeyes.

The plant handles the occasional hog or lamb, but mostly focuses on beef, he said.

Hermosa, South Dakota rancher Gary Baker has utilized Black Hills Meat Company’s slaughter services for years – selling his ranch-grown beef to friends and other customers in the area.

The beef from nine critters scheduled for processing in September is already spoken for, he said. Baker said he called this spring to make appointments for some cows – seeing the demand for ground beef. He called one day and there were a couple of openings in September, and when he called back a day or two later, the plant was booked until January. Similar stories are being told across the region of far more animals ready to slaughter than capacity to process them.

Baker would love to see the meat plants in his area expand their capacity, or obtain USDA inspection, if they desire. Meat processed at a USDA-inspected plant can be sold across state lines, whereas meat processed at a state-inspected plant can be sold within the state, and meat processed at custom exempt plants cannot legally be re-sold. Many of South Dakota’s plants are custom exempt plants which process animals for the livestock owner only.

“It helps everyone in the state. Ranchers like me can get more cattle in to process, the consumer gets more meat that’s locally produced.”

South Dakota House Speaker Steven Haugaard said he, too, would like to see small, local meat plants receive CARES Act funding. He plans to hold a meeting of House members soon to discuss ideas for appropriating the funds, and is optimistic that the Senate will do the same.

Frye-Mueller would also like to see the funding used for state meat labeling and promotion of state-produced meat, and for volunteer fire departments who were unable to hold fundraisers due to COVID-19.


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