Johnson introduces 'Butcher Block Act' for small meat processors
Small meat processors across the nation may benefit from a bipartisan bill introduced Thursday that looks to ease regulatory barriers and bring new grant and loan opportunities through the U.S. Department of Agriculture.
The Butcher Block Act, co-sponsored by U.S. Reps. Dusty Johnson, R-S.D., and Abigail Spanberger, D-Va., would assist smaller meat processors who are looking to expand operations or add shackle space.
Johnson told the Journal earlier this week that he has been focused on assisting a cattle market that is struggling to keep up with demand.
"The Butcher Block Act will make it easier for small processors to expand," he said. "A truly free market is many buyers and many sellers. We don't have that right now in the cattle industry, and I think the marketplace is going to get a lot of help here if we've got more participants at the processing level."
Johnson said the bill would spur good, local economic development.
"Just in the past couple of weeks in South Dakota, I've toured a number of small processing facilities, and these guys are adding jobs, good local economic activity," he said. "Frankly, they're giving consumers more of what they want. Consumers are getting more and more interested in locally sourced protein. They want to know the rancher they're getting the cow from and they want to know the processor that is turning it into steaks and beef."
According to a recent Rabobank report, an additional daily packing capacity of 5,000 to 6,000 head of fed cattle could restore the historical balance of fed cattle supplies and packing capacity.
Johnson said the Butcher Block Act would establish a loan program at USDA rural development for new and expanding meat processors and finance producer investment to drive competition within the meat packing industry. Additionally, Johnson said the bill would allocate grants to entities to increase hiring and processing capacity.
"Our cattle producers and economists have been clear, there's supply and demand, but not enough processing capacity," Johnson said. "The bipartisan Butcher Block Act will help right the ship in cattle country and create more avenues for producers to sell their product. Producers deserve a fair price and our bill will expand market capacity quickly."
Spanberger said the bill would not only benefit small cattle processors, but hogs and poultry processors as well.
"In Virginia's Seventh District, livestock and poultry bring in millions of dollars for central Virginia producers each year — but this vital funding stream is increasingly threatened by supply chain disruptions, as well as the continued consolidation within the meat industry. Particularly in the wake of cyberattacks directed against American processing facilities, we need to make long-term investments in the stability and security of the U.S. food supply," Spanberger said in a statement.
"By providing additional USDA assistance and grants for American processors to launch or expand their operations, our Butcher Block Act would both help protect the U.S. meat industry and increase market opportunities for American livestock producers," she said.
In Kansas, the Tyson Foods' Holcomb beef processing plant was seriously damaged by a fire on Aug. 9, 2019 putting the plant out of operation for nearly a year. That, plus the onset of the COVID-19 pandemic, seriously undermined the nation's ability to process enough product to suit consumer demand. Zippy Duvall with the American Farm Bureau Federation said the Butcher Block Act will benefit small processors to step up and assist to stabilize the cattle market.
"The Holcomb plant fire and the COVID-19 pandemic delivered a one-two punch to our nation's cattle growers and the volatility in the cattle markets that followed drove home the need to find solutions to the challenges facing the industry," Duvall said in a statement. "We appreciate Congressman Johnson and Congresswoman Spanberger for introducing the Butcher Block Act, which aims to diversify processing and create a more resilient food supply chain."
The Butcher Block Act is also supported by the United States Cattlemen's Association and the National Cattlemen's Beef Association.
"From coast to coast, we're hearing the same need from our producers. More hook space to alleviate the chokepoint in our supply chain must be a part of any solution aimed at putting more of the beef dollar in the pockets of cattle farmers and ranchers," said NCBA Vice President of Government Affairs Ethan Lane. "The Butcher Block Act takes important steps to fund the growth of regional and independent packing plants, giving farmers and ranchers more opportunities to get their cattle sold and processed. NCBA thanks Congressman Johnson for his bipartisan leadership on this critical issue for South Dakota ranchers."