Center's new loan program helps small to medium-sized meat processors

Farm and Food

By Deborah Van Fleet, Public News Service-Nebraska 

Nebraska's small and medium-sized meat processors may be improving and/or expanding their businesses thanks to a new lower-interest loan program designed specifically for them.

The Center for Rural Affairs has added a Meat and Poultry Processing Loan program to its current loan offerings.

The program is made possible with the U.S. Department of Agriculture Rural Development Meat and Poultry Intermediary Lending Program grant.

Independent meat processors now have access to $15 million in loan capital through the program's loan fund.

Meg Jackson—a local foods associate with the Center—said it's an "exciting time" for the local meat industry, since the USDA announced its initiative to help smaller, independent processors.

She said the fact that the four largest meat packers have come to dominate nearly 85 percent of the industry has had an impact at every level.

"The consolidation of the meat industry has totally disrupted the pricing, choice and supply chain," said Meg. "It's impacted negatively the pricing for farmers and what they're able to get for their livestock, and the price at the meat counter for consumers.

Meg said the Center's Meat and Poultry Processing Loans are designed to help both existing USDA-inspected processors and startups planning to become USDA-inspected.

She said the Center is aware that some small-town lockers have struggled to stay competitive against the larger processors while also dealing with aging equipment, owners reaching retirement age and a changing workforce.

For those who've faced lack of access to capital, the Center's new loan program may be the resource they need.

The Center is accepting applications now, and Meg explained that the funding can be used for a wide variety of purposes.

"These loans can be used for expansion of existing processors," said Meg, "start-up of new processors, real estate and equipment, facilities updates, and working capital."

She described the ideal applicants as the rural meat lockers who are serving their regional farmers, grocery stores, and consumers.

The general manager of McClean Beef in York, Brian Kurth, said a loan program like this is really needed. He said when they're busy, they're "lined up and backed up," fueled in part by changing concerns of consumers.

"It's needed because we're trying to expand and meet the market," said Brian. "Consumers are wanting to know where their food comes from, and that is why this has picked up so much."

Brian said most of the beef they process comes from within an hour or so of York, but they've gotten it from as far away as Wyoming and Minnesota.

He said there's more than one reason this loan program appeals to them.

"It's an opportunity for us to get lower interest rates, for one," said Brian. "It's a breath of fresh air to talk to their staff that understand ag and understand our complexities and differences."

Click here to listen to the interview.

Feature photo: The Center’s Board of Directors toured McLean Beef on March 9 to learn more about processing and the type of businesses who would qualify for Meat & Poultry Processing Loans. General Manager Brian Kurth explains the process on the "killing floor."  |  Photo by Rhea Landholm