Expanding market opportunities for meat processing discussed
The Wyoming Stock Growers Association and the Texas and Southwestern Cattle Raisers Association co-hosted the Expanding Meat Opportunities for Meat Processing webinar Jan. 227During the webinar, Jesse Hough with Nebraska Beef and Lamb and Jonathan Huseman with Stockman’s Beef Packing, LLC, discussed proposals for new meat processing facilities to diversify supply chains.
In addition, U.S. Department of Agriculture’s (USDA) Rural Business Cooperative Services Administrator Dr. Karama Neal and Deputy Administrator Mark Brodziski met to discuss a recent USDA loan guarantee program for meat and poultry processors.
Supply chain impacts
The supply chain has experienced several events within the last few years, which have affected the market.
“Profit margins have shifted to the benefit of the processor and retailer from the farmer and rancher in the last eight years,” explained Hough. “The industry needs to shift the participation in the processing and retail to be sustainable on a
long-term basis.”
Many small butchers have gone out of business in the last 20 years, he noted.
“Currently there is limited space to harvest animals on a local basis for producers who want to custom harvest and market their products from the farm to table concept,” shared Hough.
In addition, large meat processors cannot currently accommodate niche markets – religious based harvest requirements or specialty meats, explained Hough.
Next, the sheep and goat industry in the upper Midwest has been declining, he said.
“We’re considering the development of locally raised sheep and goat operations to provide inventory to harvest in our plant to meet ethnic market needs,” shared Hough. “We want to assist young, local farmers with an opportunity to diversify their operations with locally raised sheep and goats by providing seedstock to start their operations.”
In addition, supply chain issues are showing up in input costs for farming, input feed cost for livestock and also an increase cost of construction, Hough added.
Nebraska-based operation
Nebraska Beef and Lamb’s goal is to serve local markets within 200 miles of the facility to accommodate consumers who want to fill their freezers with locally raised meat and provide customers harvest for neighboring animal producers who have existing brands or retail markets.
They are in the process of finalizing engineering plans and their environmental equipment selection for their operation to be opened in the spring of 2023.
“We’re all directly involved in agriculture and have combined our knowledge, relationships and capital to hopefully invest back into the community to create at least 50 jobs,” shared Hough.
“We believe today’s consumers want to be closely connected to the people who produce their food – the farm to table concept,” added Hough. “Several ethnic groups are requesting a lot of products in sheep, goat and beef industries and Nebraska Beef and Lamb will be able to accommodate these groups’ needs and follow the quality and humane USDA standards of animal harvesting.”
“In conclusion, we have farmed and fed cattle for over 50 years and understand volatility and risks. We believe mid-sized plants located throughout the U.S are a good solution to industry issues,” concluded Hough.
Texas-based plant
Stockman’s Beef Packing, LLC, is also looking to build and operate a state-of-the-art USDA inspected beef slaughter and processing plant in Comanche County, Texas to address the need for additional packing capacity in the U.S.
Stockman’s Beef Packing currently raises cattle on owned and leased acreage throughout Texas, New Mexico and Kansas.
The plant is planning to be certified USDA organic and provide above average employee compensation.
“We intend to do everything the right way with animal holding and handling facilities designed according to Dr. Temple Grandin’s principles,” shared Huseman. “The facility will be well positioned geographically among a rural, agriculture-based community.”
The plant will have the capacity to process 100 cattle per day and allow producers to expand their operations, increasing the economic base in the local community, he explained.
In addition, the plant is looking to include the latest advances in an environmentally conscious design, onsite solar, water recycling and conversion of animal waste to biofuels, in an effort to have zero waste from the packing plant.
U.S. loan
guarantee program
New federal funding is available to provide access to capital and reduce financial risk for mid-sized meat processing plants, with a goal to create a more secure, diverse and resilient food supply chain.
“The food supply guarantee program is focused on providing producers access to capital they need to increase capacity in the food supply chain and make it more secure, diverse and resilient,” said Neal.
USDA is using $100 million in funding from the American Rescue Plan Act to back $1.4 billion in guaranteed loans in an effort to help finance working capital, facilities, equipment and other investments in the middle of the food supply chain.
Roughly 19 percent of these funds are being reserved through June 7 for meat and poultry, said Neal.
“The food system of the future needs to be fair, competitive, distributed, resilient and serve as a pilot program to inform other programs authorized under Section 1001 of the American Rescue Plan Act of 2021,” said Neal.
Loan applicants could include for-profits, nonprofits, consortiums, cooperatives and Tribal entities and support the start-up expansion of activities in the middle of the supply chain, shared Brodziski.
Several benefits include longer repayment terms, full amortization, high loan amounts, competitive interest rates and availability through commercial lenders, he added.
“The federal guarantee mitigates risk and allows lenders to offer longer repayment rates, more competitive interest rates and doesn’t count towards a bank’s credit limit,” concluded Brodziski.
Brittany Gunn is the editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
