July 14, 2023

 

Programme opens door for major investments in Alabama, US meat, poultry processing industry

 

 

The meat and poultry processing industry of Alabama, the United States, is receiving major financial investments through the Alabama Meat Processing Program.

 

The Alabama Department of Agriculture and Industries created the low-interest loan programme through funding from the United States Department of Agriculture (USDA).

 

Market concentration within the US agriculture industry is a hot topic. Many people believe the industry is becoming too concentrated, leaving fewer firms to compete with one another. A recent publication from the USDA Economic Research Service reported that critics believe this level of concentration has led to a series of economic impacts. These impacts include higher consumer prices, lower prices paid for farm commodities, increased corporate profits and reduced wages.

 

In March, the USDA announced an US$89 million investment to support the startup and expansion of independent meat processors. This investment is part of the Biden-Harris Administration's Action Plan for a Fairer, More Competitive and More Resilient Meat and Poultry Supply Chain. Alabama received US$15 million of this allotment.

 

"The USDA is laser-focused on standing up for America's farmers and ranchers by expanding processing capacity, creating fairer markets and more revenue streams and market opportunities, which helps bring down food costs for families at the grocery store," said US Secretary of Agriculture Tom Vilsack.

 

The Alabama Meat Processing Program allows Alabama's independent meat processors to make investments in their operations. These investments can include items such as purchasing or constructing new facilities and expanding existing facilities. Processors can also purchase new equipment, cover start-up costs and hire more employees.

 

Dennis Brothers, an Alabama Cooperative Extension System associate Extension agricultural economics professor, said the supply chain disruptions caused by the COVID pandemic sparked an interest in expanding local meat processors across the US.

 

"In a recent study, 57% of Alabama cattle producers expressed an interest in adding more processing facilities in the state for their operations to utilise as an outlet for their product or a source for processing their product," Brothers said.

 

According to Brothers, the long-term success of new and expanded facilities will depend on how well the owners market the products. In order for the local public to demand a locally supplied product, they must know what is available and how to obtain it. Also, finding the needed workforce to operate these facilities will be crucial to successfully running the businesses.

 

"We all remember the shortage of beef, pork and poultry on the store shelves during COVID-19," Brothers said. "If consumer demand and producer interest remain high, the Alabama Meat Processing Program could strengthen the local supply chain for those products and have big impacts on local economies."

 

The Alabama Agricultural Development Authority administers the Alabama Meat Processing Program.

 

"I want to encourage business owners who are currently engaged in or thinking of starting to process meat (cattle, swine or poultry) to apply for this beneficial programme," said Rick Pate, Alabama's commissioner of agriculture and industries.

 

- Gulf Coast Media