Independent local meat processors are a vital component of resilient food systems. They also contribute to the rural economy, provide a needed service to livestock producers, and ensure quality meat is readily available.
Because of their value, several resources exist for new and existing meat processors. This page contains information on federal, state, and local programs for independent meat processors, as well as information on the Center for Rural Affairs efforts to strengthen local processing, including the Nebraska Independent Processor Assistance Program.
The U.S. Department of Agriculture (USDA) administers two programs that provide direct assistance to the production of food, including meat—the Local Food Promotion Program (LFPP) and Value-Added Producer Grants (VAPG). While there is not a program exclusively for the processing of meat, these programs are directed to local and regional food production, processing, and distribution, therefore, most small processors could utilize them, if desired.
Programs specifically designed for meat processing are currently under development at the state and federal level. As noted in the section below, state programs vary and funding changes on an annual basis. We will update this page as these programs are created and changed.
Value-Added Producer Grant
VAPG provides funding directly to agricultural producers for a diverse range of projects. Unlike other programs, partnerships are not required. Farmers and ranchers, groups of producers, cooperatives, and others can apply, so long as those individuals are producing the raw product themselves.
The aim of the program is to turn raw products into processed, usable goods to sell to customers. Two grant types are offered—planning and working capital. Planning grants can be used for market analysis, feasibility studies, analyzing the business’s structure, and anything else which precedes development of the product. Working capital grants can pay for the direct expenses related to processing a product for eventual market sale. This could mean equipment, building renovation, even some employee salary among other things.
|Planning Grant||Implementation Grant|
|Minimum: $25,000||Minimum: $100,000|
|Maximum: $75,000||Maximum: $250,000|
|Activities: Feasibility study, business development plan, etc.||Activities: Processing costs, marketing, some inventory or salary expenses, etc.|
Match: 10%. Eligible entities: Independent producers, producer groups, producer cooperatives.
How can this be used in meat processing?
Because the VAPG program can only be used by those who produce the raw product, it must be the farmer or rancher who applies. They themselves could become a meat processor, both producing and processing their own meat. Other meat processors who do not raise animals could encourage their customers, i.e. farmers and ranchers, to use the program to develop direct sale markets, bringing new business to the processor in turn.
Applications are typically available in the early months of the year, sometimes beginning in December. To find more information on the program and access to the application visit this USDA Rural Development page.
Local Food Promotion Program
The aim of LFPP is to create or expand local food systems so locally produced raw food can be processed and distributed to local residents. This not only builds a stronger local food economy but provides residents with fresh, high quality food. LFPP grants are available for agricultural businesses, CSAs, local governments, non-profit organizations, producer networks, and other entities.
The application period opens in the spring, typically between March and May. Grants are available for planning and implementation. Planning grants can be used for market analysis, business plans, transportation system development, and other activities taking place before a food system is operational. Implementation grants can be used to implement more efficient transportation systems, create an online wholesale selling platform, update practices and equipment for increased food safety, and other expenditures related to developing, coordinating, or expanding local food businesses.
|Planning Grant||Implementation Grant|
|Minimum: $25,000||Minimum: $100,000|
|Maximum: $200,000||Maximum: $750,000|
|Activities: Feasibility study, business development plan, technical assistance, etc.||Activities: Food incubators, online software development, transportation, etc.|
Match: 25% or 10%. Eligible entities: Agricultural businesses, CSAs, local governments, non-profits, producer networks, and others.
How can this be used in meat processing?
In some cases, a meat processing business can apply for this funding to expand capacity, sell products at retail locations, organize an online ordering platform, or other activities aimed at expanding access and consumption of local food. In other cases, processors can benefit indirectly by encouraging the development of local food systems around them. This could mean being a partner in an LFPP project to create a way for local farmers and ranchers to sell meat directly to consumers or the establishment of a local food hub, for example.
LFPP also requires applicants to have partnerships with other businesses, individuals, or institutions that will mutually benefit from the proposal. While the partners can be loosely connected, they must establish that a structure exists for ensuring local distribution and consumption of the food product. In the example below, the main applicant could be the meat processor, while the three cattle producers are listed as partners who commit to providing the meat and working with the processor. The processor, in turn, uses the grant to develop new local markets.
Other federal programs
In addition to the two programs above, there are several federal programs which can also be explored, but do not tie directly to food, agriculture, or meat. For a new or expanding meat processor, these can be excellent programs to offset the cost of a building purchase or repair, utilities, and other components of a small business. We encourage you to consider these and look for other opportunities.
As a further note, many of these programs will not fund a processing business directly. Collaboration with public entities, economic development organizations, and other partners is often necessary to apply.
Rural Business Development Grant (RBDG)
Grants provided through the RBDG program are incredibly versatile. Although businesses themselves are not eligible, local government and private non-profit organizations can support local entrepreneurs in many ways with funding. The funds can be used for most purposes not related to business operating expenses. Examples include demolition of buildings, feasibility studies, or utility expansion. With a maximum grant amount of $500,000, projects of most sizes can be completed.
Business and Industry Guaranteed Loan Program (B&I)
B&I loan guarantees are not meat processing specific but can be used for any rural business. To utilize these guaranteed loans, a private lender, not the business owner, will apply for a guarantee on a loan to a rural business. This may be helpful for individuals with lower credit or difficulty obtaining private loans outright. They cover up to 80% of a loan with a variable, but high, maximum dollar amount.
Rural Energy for America Program (REAP)
REAP can assist businesses in many different ways, primarily with energy production and efficient energy usage. The program provides both loans and grants of different amounts, with grants covering less of the overall project cost. Some eligible expenses are new appliances or lighting, installation of solar panels, or more effective insulation. Most rural businesses are eligible for this program.
Several states operate specific meat processing programs. Their general aim is to increase the capacity of small processing facilities, typically by incentivizing expansion or startup. Below are examples of state processor programs. To find a comprehensive list, visit this Niche Meat Processing page. Because programs start, end, and change regularly, be sure to search within your home state for up to date information.
Some states have only developed programs in the wake of supply disruptions caused by COVID-19. Many of these new programs are funded solely by federal relief and thus may be unusable in one or two years if appropriations are not made by their states.
- Expanding or renovating processing facilities: North Carolina’s program supports a wide range of potential uses, including facility expansion. Oklahoma’s program will provide up to $1 million toward facility expansion or renovation.
- Preparation for government certification: Iowa’s program, which is funded through COVID-19 relief money, will allow recipients to use the money for purchases in relation to a future government certification, such as USDA or state inspection.
- COVID-19 response: Montana has a small program focusing on expansion of processors in response to the pandemic. Indiana has a similar program. Both have broad uses and limit recipients to $150,000.
Nebraska Independent Processor Assistance Program and LB 324
In 2021, the Nebraska Legislature passed Legislative Bill (LB) 324. The legislation made changes to meat inspection laws in Nebraska and created the Independent Processor Assistance Program, which is set to begin offering grants to meat processing facilities in August.
Under the new law, eligible applicants must be a federally inspected or custom-exempt processing facility and have sales revenue under $2.5 million with fewer than 25 employees. Eligible expenditures for the program include capital improvements and construction aimed at expanding capacity, upgrading utilities, processing and packaging equipment, and costs associated with becoming inspected. Guidelines for the program have not been released, but will go into effect Aug. 27, 2021. Keep an eye on this page for updates.
Iowa Butchery Innovation and Revitalization Program and HF 857
The Iowa Legislature passed House File (HF) 857 in 2021, which will create the Butcher Innovation and Revitalization Program. This program will provide assistance to new and existing small meat lockers in the form of grants, low-interest loans, and forgivable loans to help them grow. The bill is designed to complement the Meat Processing Expansion and Development Program that ended in 2020.
Eligible uses include expanding, refurbishing, or establishing a state-inspected, federally-inspected, licensed custom, or mobile slaughter facility and for the renting of buildings, refrigeration and freezer facilities, or other equipment necessary for expanding processing capacity. It is only available for meat processors that employ less than 50 employees.
HF 857 also created a task force which will assess the feasibility of establishing an artisanal butchery program at a post-secondary educational institution in Iowa. The task force, made up of processors, culinary professionals, livestock producers, and others will complete their report by the end of 2021.
The Butchery Innovation and Revitalization Program has not yet been formed by the Iowa Economic Development Authority nor has the Artisanal Butchery Program Task Force been fully formed by the Iowa Department of Agriculture and Land Stewardship at this time. When guidelines for the program have been established we will update this page.
Many towns have created programs to assist in community economic development. They are generally operated by local governments, regional development agencies, or non-profit organizations. Their services vary, but small loan and grant programs are often available. Some less direct assistance is also an option. For example, public bodies or non-profits regularly purchase land or buildings for redevelopment or renovation. They can also assist with improvements to sewer, water, broadband, or electricity at reduced rates.
Few, if any, local economic development programs are specifically focused on meat processing. They are aimed at promoting general economic development across industries. Programs offered will differ in each community and region so connecting with professionals in your area is the first step.