By Matt Reese
From the farmer to the consumer, the whole food chain saw the need for change in 2020 when processing capacity was reduced resulting in back-ups and shortages. This situation was partly due to a problem Ohio agriculture has been talking about for years — there is simply not enough local meat processing capacity.
“This is something we have been working on for several years in the state of Ohio. It is so important to our producers,” said Brandon Kern, senior director, state and national policy for Ohio Farm Bureau. “Even pre-pandemic, this had been an issue that was percolating. We have capacity needs, particularly when you are talking about small and medium-sized processors. Part of the issue is that most of the meat processing in this country is very concentrated amongst four very large meat packers and two of those are foreign owned. This presents some real food security issues. This time last year we saw that this can create some real issues in the supply chain when we saw some of these facilities shut down or have productivity issues. We saw back-ups in the whole supply chain. We had cattle producers and hog producers and others where the whole supply chain was backed up and they couldn’t move animals off the farm because of the reduced capacity with our meat processors.”
The situation caused serious concerns for farms with nowhere to send their livestock, milk and eggs and resulted in limited supply in grocery stores around the country. With both ends of the food chain affected, the political will to address the problem is finally getting traction in 2021 at the local, state and federal levels.
“Here in Ohio we are promoting the idea that we need to be supporting small and medium meat processors as well — those who work with growers to do their own label and maybe some direct marketing to local and niche markets to help alleviate the strain on the larger supply chain of the Big 4,” Kern said. “We have been asking the state legislature for some support for a grant program at the state level to help support small and medium processors. We think that will provide real opportunities for growers here to not rely just on that Big 4 supply chain.”
At the federal level, much of the legislative discussion has been centered around livestock pricing.
“I think a lot of the dialogue has been more focused on price discovery and transparency and having more access to the data and what prices are being paid across the country in different markets. This is particularly important for those who are working on cash trade,” Kern said. “For those who are working on cash sales, there is not a lot of good information about what a good price is and if you are getting a good price from the packer. That price transparency is an important concept. There are other ideas being thrown around about minimum cash trade as well — setting a floor to the level of payment that will happen regionally. That is something we support at Farm Bureau as well, but we think the most important is that price discovery piece, especially if you’re talking about that cattle market.”
The food chain issues are on the mind of USDA Secretary Tom Vilsack as well. There are several provisions addressing these issues included in USDA plans to distribute more than $12 billion under the Pandemic Assistance for Producers program. As a part of investing $6 billion to expand assistance to more producers there are several portions directly addressing food chain issues including funding for:
- Dairy farmers through the Dairy Donation Program or other means:
- Euthanized livestock and poultry;
- Other possible expansion and corrections to CFAP to support dairy or other livestock producers;
- Personal Protective Equipment (PPE) and other protective measures for food and farm workers and specialty crop and seafood producers, processors and distributors;
- Improving the resilience of the food supply chain, including assistance to meat and poultry operations to facilitate interstate shipment.
In addition, USDA is offering $100 million in additional funding for the Local Agricultural Marketing Program, administered by the AMS and Rural Development, which supports the development, coordination and expansion of direct producer-to-consumer marketing, local and regional food markets and enterprises and value-added agricultural products.
Along with the political push at all levels to address the food chain capacity issues, Ohio State University’s College of Food, Agricultural, and Environmental Sciences (CFAES) is lending support to the issue as well to help bolster Ohio meat processing capacity.
“It’s overwhelming,” said Lyda Garcia, an assistant professor of meat science and Extension meat specialist with The Ohio State University College of Food, Agricultural, and Environmental Sciences (CFAES). “The meat industry is a complex system. There are so many hurdles you have to jump over and loops you have to jump through. At any point, any of them can be a problem.”
Garcia is as part of a team within OSU CFAES that worked to create a free online “toolkit” including questionnaires, links, and other resources to help potential future entrepreneurs to fully think through starting up a meat-processing facility. Using the toolkit provides livestock inventories by county throughout Ohio, business model options, guides to creating a business plan, contacts in the meat industry, and many other resources.
“If they can go through and answer questions from the questionnaires, they’ll have a good idea of what’s involved,” Garcia said.
After the local meat processing scramble of 2020, most Ohio meat-processing plants are booked until 2022 and beyond with orders. In response to the explosion in demand, at least eight new meat-processing facilities have started up in Ohio since last fall, Garcia said.
There is plenty more growth potential in Ohio for meat processing, but the obstacles are significant. Among the numerous challenges are finding land for the facility, securing a bank loan, getting commitments from enough producers, and attracting a customer base, Garcia said.
“There are a lot of moving parts many people don’t realize,” she said.
In addition, business owners need to decide whether the facility will follow and be inspected for state standards, allowing the meat to be sold within Ohio, or federal standards, allowing it to be sold out of state.
“The whole intent of the toolkit is to give people an idea of what’s coming their way,” Garcia said. “We’ve provided about 70% of what they need to know. The other 30%, they’re going to have to learn as they go.”