Undersecretary listens to concerns of regional meat processors
Xochitil Torres Small, the USDA’s under secretary for Rural Development, and Sen. John Hoeven, R-N.D., met with Farmers Union members and area processors Monday, June 27.
JAMESTOWN — The U.S. Department of Agriculture’s undersecretary for Rural Development recently listened to concerns from regional meat processors and cattle producers on the challenges of developing more local and regional processing facilities.
The USDA is investing $1 billion to promote competition and resilience in meat supply chains, wrote Pam Musland, communications director with North Dakota Farmers Union. She wrote the assistance includes gap funding for the establishment and expansion of independent processors and technical assistance and workforce development programs.
Farmers Union President Mark Watne said the funding will be one of the tools that gets new meat-processing operations started and established.
“We have 900,000 cows in North Dakota,” he said. “We only process 12,400.”
Xochitil Torres Small, the USDA’s undersecretary for Rural Development, and Sen. John Hoeven, R-N.D., met with Farmers Union members and area processors to discuss meat-processing expansion in the state Monday, June 27, at North Dakota Farmers Union in Jamestown.
Torres Small said the USDA needs feedback from regional processors and cattle ranchers so the department is aware of how certain rules impact certain types of processors when it comes to crafting certain rounds of funding.
“We want your feedback about how these programs that are targeted in different parts of the supply chain and different sections of processors, different sizes, how that fits your operations and how that could better fit operations like yours,” she said.
Watne said four meat packers control 85% of the production, which doesn’t bode well for somebody trying to break into the market.
“I do believe they are doing a little more in the price-fixing world than they probably should be,” he said. “ … We can’t just put this money out here and let that high concentration of power within those four companies, we can’t just let them exist as they are today. They’ve got just too much power and they are going to make it extremely hard for these smaller plants to be successful.”
Watne said the problem with expanding meat rendering facilities is figuring out what to do with the animal byproduct materials.
“We can turn that into protein; we can make use of that,” he said. “The challenge of course is you can’t haul it very far.”
Watne said he would like to see some of the $1 billion used to develop the meat rendering industry and pick-up stations for the animal byproduct materials. He said it costs about $15 million to $25 million to build a large meat rendering plant.
“They need a certain supply of cattle or something to feed their market,” he said. “The good news is that it goes to protein and it becomes animal feed for other animals that can eat it.”
Meat rendering plants process animal byproduct materials for the production of tallow, grease and high-protein meat and bone meal.
Hoeven said more alternative processing plants are needed.
“How do we get the newer ones not only going but how do we keep them in business because through the years, we've had a lot of different startups,” he said. “ ... We started up quite a few but that doesn’t mean they can make it. We’ve got to get them started and make sure they can make it.”
John Roswech, owner of South 40 Beef, said his self-funded business was started about 17 months ago. He said the beef-processing facility processes about 40 to 45 cattle a week or about 160 to 180 per month.
He said the challenge with applying for an impact grant was he had to pay a grant writer to finish the grant application that he had 80% complete.
“It was very difficult, very challenging,” he said.
He said another challenge is that the infrastructure in rural America is bad. For his processing facility about 1 mile from Mott, North Dakota, he said he has to pay rural electricity rates, which is more expensive than in town. He said the facility doesn’t have access to water or sewer and spends $2,500 a month on hauling water from his plant and spreading it on his food lots.
Garitt Irey, of Butcher’s Edge in Edgeley, North Dakota, said one of the biggest challenges of opening the facility was the supply-chain issue. He said an exact opening date of the facility could not be nailed down so promises could not be made to producers of how much cattle it could take, which makes it more difficult to get a consistent cash flow while the business is operating.
“We are still waiting on a couple pieces (of equipment),” he said.
Irey also said the Agricultural Products Utilization Commission grants have been helpful to Butcher’s Edge. He said the company missed an opportunity to apply for a federal grant because the facility was under construction and it didn’t qualify for it.