- Start off with business planning, do your market research.
- Talk to and define potential customers.
- Conduct at SWOT analysis: Strengths, Weaknesses, Opportunity and Threat.
- Business plan instructive video.
- Financing, where to look for potential grant and loan opportunities.
- What types of inspections are needed, depending on customers.
- Fixed facilities and utilities, zoning and availability of 3-phase power, adequate water and wastewater disposal.
- Mobile Slaughter potential.
- Labor Force.
|USDA announces $125 million available for meat processing grants|
|The Agriculture Department (USDA) on Wednesday announced the availability of up to $125 million through two new grant programs intended to create more options for meat and poultry farmers by investing in independent, local meat and poultry processing projects that increase competition and enhance the resiliency of the food supply chain. These new grant programs – the Indigenous Animals Harvesting and Meat Processing Grant Program and the Local Meat Capacity Grant Program – are part of the broader $1 billion American Rescue Plan investment by the Biden-Harris administration to expand processing capacity for small and midsized meat and poultry processors. “This is the latest step in USDA’s transformational work to fill gaps and help small and underserved producers market their products, support thriving local and regional food systems by investing in processing capacity that’s closer to farms, and alleviate major bottlenecks in food and agricultural supply chains,” said Agriculture Secretary Tom Vilsack. “Importantly, we’re also taking steps to increase the overall availability of protein from indigenous animals like bison, reindeer and salmon, which have been the backbone of tribal food systems for generations.” The Indigenous Animals Harvesting and Meat Processing Grant Program will provide up to $50 million to improve tribal nations’ food and agricultural supply chain resiliency by developing and expanding value-added infrastructure related to meat from indigenous animals like bison, reindeer or salmon. The program will fund projects that focus on expanding local capacity for the harvesting, processing, manufacturing, storing, transporting, wholesaling or distribution of indigenous meats. “This is a historic investment to support indigenous food supply chains by enhancing community food sovereignty and traditional harvesting methods,” said USDA Office of Tribal Relations Director Heather Dawn Thompson. “Tribal nations have clearly articulated their priorities to USDA over the last two years, and this program directly responds by focusing on species and activities which have historically not had significant access to funding in federal programs.” “For too long, Native American farmers and ranchers have been asked to produce more to meet increasing demand across the country and around the world, while they and the tribal communities they come from have struggled to see their fair share of the benefits,” said USDA Undersecretary for Rural Development Xochitl Torres Small. “By expanding and enhancing local processing capacity, these projects will provide culturally appropriate food and community food security to tribal communities.” Eligible applicants are Indian tribes, as defined by the Federally Recognized Indian Tribe List Act of 1994, as well as wholly-owned arms and instrumentalities, and joint or multi-tribal government entities. USDA partners with tribal-serving organizations on projects to reimagine federal food and agriculture programs from an indigenous perspective and inform future USDA programs and policies. More information is available on USDA’s Indigenous Animals Grants webpage. Applications will be accepted through July 19, 2023. The Local Meat Capacity Grant program will provide up to $75 million in grants to fund innovative projects designed to build resilience in the meat and poultry supply chain by providing producers with more local processing options and strengthening their market potential. This grant program is targeted to support meat and poultry processors with smaller-scale projects, with a goal to increase processing availability and variety for local and regional livestock producers. “Local and regional meat processing is an important part of a resilient food supply chain. It not only provides producers with diverse processing options in their areas, but it also adds infrastructure, income and jobs in communities and provides more choices for consumers,” said USDA Marketing and Regulatory Programs Undersecretary Jenny Lester Moffitt. “These Local Meat Capacity grants will provide local livestock and poultry producers with more and better options by modernizing, diversifying, and decentralizing processing capacity. As part of the Biden-Harris administration’s comprehensive approach to transforming the food system from farm to fork, this program complements other USDA grant programs building capacity along the supply chain, like the Meat and Poultry Processing Expansion Program, by providing targeted support for meat and poultry processors with smaller-scale projects.” The Local Meat Capacity Grants will fund both expansion and equipment-only projects through a competitive grant process. USDA encourages applicants to engage with livestock producers, especially small and underserved ranchers. More information is available on the Agricultural Marketing Service’s Local Meat Capacity Grants webpage. Applications will be accepted through July 19, 2023.|
SDSU offers suggestions for those thinking of processing meat
Conversations focused on starting meat-processing facilities have been a big topic among ag producers, especially with potential federal and state funding available. A publication by two South Dakota State University Extension Meat Scientists pulled together vital information for those considering such an investment.
In an interview, the SDSU Extension Meat Science Specialists Christina Bakker and Amanda Blair shared why they developed this decision tool called, “Building a Meat Processing Facility -Considerations to help you get started.”
“This project began with funding through the North Central Sustainable Agriculture Research & Education program and developed as a response to the many questions we received from producers and other interested parties in building meat processing facilities,” Christina said. “We had a huge influx of people reaching out who wanted to develop their own meat processing facilities. Instead of having the same conversation over and over, we decided it would be best to pull together funding and create this decision tool with information available to anyone who wanted it.”
Amanda said questions came mostly from producers who were struggling to get livestock processed through various channels. They saw opportunities to develop the meat-packing side of the industry by building small lockers, but they quickly found out there were challenges. “Many conversations were initially focused on the capital investment required but producers quickly learned that regulations, logistics, and labor issues were a major reason not everyone does this,” Amanda said. “We developed this decision tool as a self-guide to help people navigate some of these initial considerations.”
Working with North Central SARE, they developed a partnership proposal. “We had to come in with partners and we had four producer partners that really did everything with us,” Amanda said. “They went on tours, attended all the workshops, participated in webinars, and of those four, two of them have either taken on ownership of an existing locker or are in the initial phases of building a new locker.”
While the partners were a major focus, the information was available to anyone who wanted to join the webinars and view the information gathered. The specialists fielded two to three phone calls a week on this topic for a long time, and very few of them went to fruition.
“Producers were trying to figure out how to alleviate a processing gap in the industry,” Amanda said. “Many were not necessarily in a position to walk away from their production enterprise to start a processing plant, but we discussed potential opportunities. So even though there were not a hundred new lockers that sprang up from this, the education that producers received about the challenges was still beneficial. They learned about labor issues, logistics issues, and capital issues. If nothing else, those conversations were beneficial because they helped those producers understand a little more about the processing industry.”
From her viewpoint, Christina said, “I think one of the most eye-opening revelations to a lot of producers was the requirements for the facility themselves. Many people thought they could quickly put up a $50,000 building and then move on to meat-processing. It’s a lot more complicated than that as they have to use food-grade materials. The facilities have to adequately chill carcasses and process those carcasses following the regulations determined by their inspection status. I think that was the biggest conversation I had time and time again.”
The calls also clarified that there is a lack of understanding of the regulatory side of the meat-processing industry. Amanda said, “We did a lot of education on the differences between the state and federal inspection process. And how custom-processed products can’t be resold. I think that depth of understanding was beneficial, even if they didn’t build a facility.”
One section of the decision tool provided information on mobile slaughterhouses. It might seem like an easy way to get a new business started.
There is definitely a place for the mobile slaughter unit, but it is not without their caveats, Christina said. Some believed this could be a cheap and convenient way for slaughtering animals, but there are challenges.
“Obviously, there are benefits, as you don’t have to bring the animals to a processing facility. So, producers might reduce the stress caused by handling and transportation. They still do need to have some type of brick-and-mortar facility where you can break down the carcasses into retail cuts, as well as refrigerating and freezing them. I think there is a place for them, but it takes more than just a truck and trailer setup.”
Amanda pointed out, “When you look at labor, you have to have a crew who will move the mobile unit and set it up when needed, with someone on the crew with a CDL as it’s a semi-truck with a major trailer.”
“Another thing I hadn’t considered was the risk you take by having a mobile unit and the possibility of being in an accident. Then your entire business is sunk for a while,” Christina said. “It still has to be inspected, has to have a tested, potable water source and the ability to begin chilling the meat.” These meat science specialists said there may only be one consistently operating within the state.
Working to prepare this document, Christina said it’s important that people know the challenges on both sides. Overall, most questions dealt with inspection and whether producers can sell meat based on how it was processed.
The second area dealt with the workforce, with people asking her to send them workers and to find out how to train meat cutters. “The labor force is critical, and we really wanted to include this information in this packet, so people are aware. You can build a fancy building, but if you don’t plan and know where the workforce is coming from, you’re just going to have a big shiny facility that isn’t functioning. It’s a problem throughout the country with the labor shortage, but with a skilled trade like butchery, you have to have the skills and pay accordingly.”
There are a ton of questions, and these specialists don’t have all the answers. One of the key things for producers to know is that there are resources out there to help with things like architectural design and workforce. The people at the South Dakota Department of Labor have strategies that could develop a labor force. Hopefully, that is one of the take-home messages. There are a lot of other folks and agencies available if a person or group truly wants to build a processing facility.
This decision tool directs people to look at research to identify the need and who the customers will be. Just because you have a supply of animals doesn’t mean that customers will be banging down your door.
“Find out who are the potential customers in the area,” Christina said. “You can’t start a plant, and then say, ‘Will you buy my beef?’ Customers are creatures of habit. You have to be able to get them to change their mind about where they buy their meat and that isn’t always easy. For the business to be sustainable, it needs to have a supply of animals that will feed into the facility. It can’t be that you have 30 animals to process, and you shut it down after they are processed. Your loan payments are going to be there whether you’re processing or not.”
“Any time we can connect producers and processors, it’s a win for us,” Amanda said. “Improved understanding is the basis for all of this. The funding support from North Central SARE was critical in getting this accomplished.”
“One of the biggest goals creating this decision tool is to let people know there are resources to help them in deciding if this is a route a producer or individual wants to go down,” Christina said. “Don’t be afraid to reach out. That’s what we are here for. We’re here to be that resource.”
Go to https://extension.sdstate.edu/building-meat-processing-facility to see the decision tool.