US meat and poultry sectors relieved after US$32M grant bolsters businesses battling pandemic headwinds

23 Nov 2021 --- North American meat and poultry producers hit hard by market volatility and critical gaps in the labor pool have welcomed a new influx of investment to help fuel their businesses and propel COVID-19 pandemic recovery.

The Department of Agriculture (USDA) has issued US$32 million in grants to 167 meat and poultry slaughter and processing facilities in a bid to prop up food supply chains.

With this move, the nation’s safeguard for food supply aims to “support expanded capacity and efficiency” through the Meat and Poultry Inspection Readiness Grant (MPIRG) program.

“Today’s investment supports local and regional meat and poultry processors as they recover from the pandemic and also work to expand capacity,” remarks USDA Secretary Tom Vilsack.

“Both US beef and pork exports were “on a record pace” through the third quarter of the year, according to USDA.Achieving a Federal Grant of Inspection or operating under a Cooperative Interstate Shipment program allows meat and poultry processors to ship products across state lines, pursue new market opportunities and better meet consumer and producer demand along the supply chain.”

More out of meat
With this new grant funding, meat and poultry processing businesses can cover the costs for improvements such as expanding existing facilities, modernizing processing equipment and meeting packaging, labeling and food safety requirements.

Each of these benchmarks are needed to achieve a Federal Grant of Inspection under the Federal Meat Inspection Act or the Poultry Products Inspection Act or to operate under a state’s Cooperative Interstate Shipment program.

These changes will also allow meat producers to serve customers across more markets.

Both US beef and pork exports were “on a record pace” through the third quarter of the year, according to data released by USDA and compiled by the US Meat Export Federation (USMEF).

Beef exports posted one of the best months on record in September, with value climbing almost 60% above last year. Meanwhile, pork export volume was slightly below last September, but value still increased 8%.

“Facing significant logistical headwinds and higher costs, these outstanding results are really a testament to the loyalty and strong demand from our international customers and to the innovation and determination of the US industry,” comments USMEF president and CEO Dan Halstrom.

He adds that US beef exports to Japan, South Korea and China/Hong Kong are all on track to exceed US$2 billion this year, while pork exports are up slightly in volume and significantly in value over last year’s record pace.

Far reaching impacts
According to a new Rabobank report, global meat producers face a “leadership test” as the COVID-19 disruptions affecting food markets continue to pose challenges. Notably, animal protein supply chains face four areas of cost inflation pressures in animal feed, labor, energy and freight.

Global meat producers face a “leadership test” as the COVID-19 disruptions affecting food markets continue to pose challenges.“Traditional meat producers won’t have time to lick their wounds after a challenging 2021,” Justin Sherrard, global strategist for animal protein at Rabobank, told FoodIngredientsFirst at the time of the report’s release.

“Those that show agility and resilience in embracing a rapidly evolving global market will be best placed to make the most of the opportunities for growth that will be presented to them.”

In the case of the labor shortages, British meat producers in particular have been scrambling to plug gaps that deepened in the wake of both Brexit and the COVID-19 pandemic. Last August, suppliers here looked toward hiring prisoners as an approach to bolster their dwindling workforce.

In the UK, fast food chain Nando’s ran short of its classic menu staple peri-peri chicken wings, which prompted the restaurant chain to shutter 45 of its 450 locations. KFC also faced significant supply cuts without specifically naming any of the affected foods.

Buoyancy for small businesses
The new MPIRG program is part of USDA’s comprehensive funding package to help small and very small processing facilities weather the pandemic, compete in the marketplace, and get the support they need to reach more customers.

In June 2021, USDA announced the availability of US$55.2 million in MPIRG funding, accepting applications for a competitive grant award process, which resulted in today’s awards.

Remaining funds will be made available through a forthcoming Request for Applications.

Last August, the USDA unveiled a Pandemic Market Volatility Assistance Program – but its promised package of US$350 million in pandemic assistance was flagged as insufficient to an extent, according to dairy stakeholders who spoke to FoodIngredientsFirst at the time.

By Benjamin Ferrer