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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Disparity Between State Funding And Corporate Investment In Meat Plant Upgrades

08/21/2022

Recent press reports confirmed that the state of Ohio distributed awards amounting to $3 million among 12 meat processors with an average grant of $220,000 per recipient to upgrade plants to improve efficiency.  In total, Ohio has made 128 grants totaling $28 million to small processors.  The program claims to benefit both meat processors and farmers but also to Ohio families who will find more meat products available at stores, according to the governor.

 

In contrast, Tyson Foods announced a $200 million investment in their Amarillo, TX beef plant.  The facility employs 4,000 and contributes to the local community with a payroll exceeding $200 million.  The project will include additional locker rooms, cafeteria and office space, and upgrades directed to conservation of energy and water and plant mechanization.

 

The state of Texas has awarded a $12.2 million to Producer Owned Beef, LLC to establish a plant that will represent a capital investment of $617 million and will employ 1,600 in the Amarillo area.  This plan will commence operation in 2025.

 

The need for large capital investment to upgrade packing plants is self-evident.  Scattering small grants among numerous, independent and local producers, although politically expedient and altruistic, may not move the needle with respect to total supply or create greater security for either farmers and consumers.  Initiatives by the USDA and states to support small-scale processing is a misplaced reaction to the problems encountered with COVID during 2020.  Although grants to small red meat packing operations receive publicity, there is seldom any accounting to determine the return on investment.  Since public funds are involved, federal and state agencies have the obligation to report on the benefits of their largesse.


 
Copyright © 2024 Simon M. Shane