On Friday, U.S. Representative Dusty Johnson (R-S.D.), ranking member of the Livestock & Foreign Agriculture Subcommittee, issued a statement following President Biden’s Executive Order and the U.S. Department of Agriculture’s (USDA’s) announcement of a significant investment for regional cattle processor expansion efforts and overtime processing fees accrued during the COVID-19 pandemic. These announcements mirror two of Johnson’s bills, the Butcher Block Act and the Small Packer Overtime and Holiday Fee Relief for COVID-19 Act. Johnson made an additional request to Secretary Vilsack in March to prioritize reducing inspection fees for small processors.
USDA implements cattle proposals
“I couldn’t be more thrilled that USDA is implementing the Small Packer Overtime and Holiday Fee Relief for COVID-19 Act at $100 million,” said Johnson. “These USDA announcements are much-needed and frankly overdue for our cattle producers. Producers and members of Congress from cattle country have diligently pushed for a level playing field for small processors to diversify market options outside of the big four for a long time. Today’s announcements may not be the silver bullet to solve all of our problems, but they will certainly get us one step closer to a fairer cattle market.”
USDA announced its intent to provide $500 million in grants to expand meat and poultry processing capacity to restore balance in the meat market. In June, Johnson introduced the bipartisan Butcher Block Act which would establish a grant and loan program at USDA for new and expanding meat processors to drive competition within the packing industry. As USDA continues to finalize details of the program, Johnson will continue to push USDA to design a program that is scalable and can quickly add processing capacity while incentivizing producer investment.
Additionally, USDA announced it would utilize $100 million for existing small and very small processing facilities facing financial burdens from steep overtime inspection fees during the COVID-19 pandemic. In May 2020, Johnson introduced the Small Packer Overtime and Holiday Fee Relief COVID-19 Act to support small meatpacking plants working overtime during COVID-19. The USDA Food Safety Inspection Service (FSIS) charges meatpacking plants overtime fees for food inspectors, and amid ongoing supply chain issues and increased demand during the pandemic, small processors filled in the gaps of large ones facing shutdowns. The Small Packer Overtime Holiday Fee Relief for COVID-19 Act would reduce this fee, encouraging smaller plants to remain open and prevent supply chain bottlenecks.
Sen. John Thune said he he appreciated the outcome of the decision, although he didn't agree with the funding method.
“While I wish the U.S. Department of Agriculture chose a different funding source, expanding meat processing capacity is exactly what the industry needs," Sen. Thune said. "I applaud the outcome, but more work needs to be done. I will continue to look for ways to give smaller packers a stronger position in this market.”