Checotah to United States Beef Corporation

Damon Watson, a fourth-generation rancher in Council Hill, eventually decided he would do something almost difficulties he was having in running a profitable business.

He and his wife already were working to open up their own meat processing establish and market in early 2020.

Discouragement over disappointing marketplace prices for their livestock and a lack of local processors to use had motivated them to human action.

And then the COVID-19 pandemic arrived.

As illnesses swept through the country and nation, cattle producers quickly saw the cost they could become per head screw downwards equally regional processing plants capable of handling thousands of animals daily were forced to temporarily close at times, creating a backlog of animals waiting to exist slaughtered at feedlots.

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This exacerbated what ranchers claim has been an ongoing problem in the cattle business for decades — large processors taking larger cuts of the profits, driving up prices for consumers at grocery stores and reducing profits for ranchers similar Watson.

Country leaders in Oklahoma and other parts of the nation used money appropriated through the CARES Act in an effort to accost those issues by offering grants to people similar the Watsons who wanted to build or expand independent packing facilities.

The Watsons were able to obtain $150,000 of CARES Deed coin to help equip their businesses.

Now, as meat prices continue to be high, the Biden administration is spending $ane billion from the American Rescue Programme Act to undertake the same types of efforts, hoping to brand beef, pork and poultry markets more equitable for livestock producers and consumers.

Watson is on lath, saying he expects the federal regime's programme will assistance "not just processors, only producers and consumers, besides."

Simply an organisation that represents packing companies across the U.S. disagrees.

"The administration wants the American people to believe that the meat and poultry manufacture is unique and not experiencing the same problems causing inflation across the economy, similar increased input costs, increased free energy costs, labor shortages and transportation challenges. Consumers know better," said Julie Anna Potts, CEO of the North American Meat Establish.

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Why the Biden administration wants to step in

Administration officials said this week that the nation's four largest meat-packing companies operate about 50 major packing plants that handle processing of about 85% of the beef market, 70% of the pork market place and 54% of the poultry market.

When dominant middlemen command so much of the supply chain, they tin increase their ain profits at the expense of both farmers — who brand less — and consumers who are stuck paying more than, they argue.

They said ranchers got more than than sixty cents of every dollar a consumer spent on beef l years ago, compared to near 39 cents today. Similarly, squealer farmers got xl to 60 cents on each dollar spent fifty years ago, but but virtually nineteen cents today.

Meanwhile, increasing meat and poultry prices are the single largest contributor to the ascent costs for food that American consumers are paying, they said.

At the roundtable, President Biden said economic sectors that are dominated by a scattering of major companies can injure both suppliers to the industries and consumers who buy finished products.

"The meat industry is a textbook example. Without meaningful competition, farmers and ranchers don't get to choose who they sell to. So, these aforementioned companies can use their position as middlemen to overcharge grocery stores and ultimately families," Biden said.

"Commercialism without competition is exploitation. That is what we are seeing now. Strengthening competition is good for all of us."

Oklahoma'southward efforts to diversify could exist a model for the rest of the land

Scott Blubaugh, president of the American Farmers & Ranchers/Oklahoma Farmers Union, bragged almost Oklahoma's accomplishments using CARES Deed dollars on Jan. 3 as he discussed ranchers' market place concerns with President Joe Biden, U.South. Secretary of Agriculture Tom Vilsack and U.S. Chaser General Merrick B. Garland.

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Biden's assistants organized the roundtable issue as a way to announce its plans to employ $one billion from the American Rescue Program Act to address those concerns.

"This is on the minds of farmers and ranchers across the country, and not since Teddy Roosevelt have we had a president who was willing to have on this upshot," he told Biden.

Oklahoma's programme — created using $x million of CARES Act dollars allocated to the country at the start of the COVID-19 Pandemic most eighteen months ago — then far has helped open or expand xix boosted meat and poultry processing facilities across the land.

The program too has created 170 new jobs in 40 rural communities since its start.

Blayne Arthur, Oklahoma'due south secretarial assistant of Agriculture, Food and Forestry, said 196 parties sought grant dollars through the program. She said the new and expanded processing facilities have boosted cumulative processing capacity in Oklahoma by 350 head of livestock per week, so far.

The jobs those created are simply as important, she said.

"A lot of these facilities are in rural areas. 5 or x jobs in a rural expanse of Oklahoma makes a significant difference," Arthur said.

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She said Oklahoma'south Legislature also helped heave the manufacture by agreeing to classify more than dollars to the bureau and so it could add together meat inspectors to its staff and past approving laws that made information technology easier for Oklahoma producers to directly market their meat to consumers.

Land leaders recognized that would give residents an opportunity to back up local producers and processors, sometimes saving substantial amounts of money every bit a result, Arthur said.

"In a lot of ways, what the administration at the federal level is planning to do is very similar to what we had the opportunity to do in Oklahoma," Arthur said. "We continue to see interest grow, with people wanting to bring more processing plants online and more producers who want to sell direct to consumers. I don't think that is going to modify. Consumers want to know beefiness producers and want the Oklahoma production, if at all possible."

Some operations, like Freedom Processing in Marlow, used CARES Deed dollars to expand their operations to boost production.

For others similar Watson's business concern — Watson Farms Meat Processing and Marketplace — CARES Human action dollars made information technology possible for them to upgrade their construction plans, enabling them to aggrandize projected processing capabilities when they opened.

Watson said the $150,000 his company obtained "made all the difference in the world."

He said the company handles not simply the processing needs of his performance, merely also handles the needs of as many other local producers as it tin.

"If they need dates, they become them. They brand a lot more money this way than if they only sold information technology to a feedlot owner at market."

The Watsons don't just process local animals. They too sell what they produce to area restaurants and to the public directly at two meat markets — one at the plant in eastern Oklahoma and the other in Checotah.

Watson said his market'south prices on U.S. produced steaks and roasts are competitive with grocers. While his hamburger costs more, he said it doesn't include fillers consumers typically are getting when they buy that product from traditional stores.

"Everything nosotros sell is American beef, and 90 to 95% of that is processed by us," he said.

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Oklahoma has nearly 100 packing houses that procedure beef, pork and poultry, state officials said this week.

Some are large, federally inspected facilities capable of handling hundreds (if not thousands) of animals daily and aircraft finished products across state lines.

Others, inspected by Oklahoma agronomical officials, are large enough to handle enough animals and produce enough product to regularly sell finished meats to retail consumers.

However others are smaller custom operations that are paid to slaughter the livestock and return finished meat products to the animal's owners. Most of these but are capable of handling a half-dozen or then animals weekly.

Then there is Scott Cattle Co. of El Reno, which tapped $250,000 of CARES Human action money to help owners Luke and Lacey Scott start their operation.

The Scotts said this week they decided to open their own processing facility after getting frustrated about their difficulties in getting their meat products to consumers using other state-certified independent processors.

"At that place was a huge demand ... a lot of contained processing facilities are backed upwards for years," Lacey Scott said.

Like Watson, they said Scott Cattle processes locally grown livestock from nearby communities.

While the Scotts said their functioning benefits local producers, they added ranchers keep to confront barriers to running profitable businesses, peculiarly when information technology comes to feed costs.

"The price of corn has doubled or quadrupled compared to what it was merely a year ago," Luke Scott said, attributing the tendency to Cathay'southward practise of importing U.S. corn and then selling it back to the U.S. at inflated prices.

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As for the processing business, both Luke and Lacey said their biggest issue is keeping a qualified staff to operate their facility, which includes the processing plant and a front-end market that sells directly to consumers.

Meat packers group criticizes Biden's programme

The North American Meat Institute, the nation's merchandise association for meat and poultry packers and processors of all sizes, wasted no time in etching upwardly the Biden's administration's programme.

It noted that Jan'southward roundtable event marked the third time since Biden took function that his administration has blamed high prices consumers are paying for meat on the nation's meat processing manufacture.

"The Biden administration continues to ignore the number i claiming to meat and poultry production — labor shortages. This tired approach is not surprising because they accept refused to engage with the packing and processing sector they assault, going so far as to hold a roundtable on meat packing without a unmarried beef or pork packer present," said Potts, the institute's CEO.

Potts said prices producers are getting for cattle have climbed equally the nation's packing industry has worked to control creature backlogs inside the organization, and, that current prices consumers are paying simply reflect supply and demand fundamentals in a healthy market.

Potts said the Biden administration's plan raises numerous questions that need to be answered, including how much extra packing chapters it believes is needed, what appropriate prices for producers and consumers should be, how much employees of regime-sponsored packing facilities should be paid, and how the new aid programs might touch many other small to medium processors that take never received government aid.

"Press conferences and using taxpayer dollars to institute government-sponsored packing and processing plants will not practice anything to address the lack of labor at meat and poultry plants and spiking inflation across the economic system," Potts said.

The details of the Biden administration's plan

Assistants officials said they hope to expand independent processing across the nation by:

• Offer $375 million in grants to leap-start the evolution of independent processing establish projects.

• Deploying up to another $275 million (in addition to $100 meg already disbursed) to lenders to bolster the amounts of available guaranteed loans that might be needed by independent processors to start or grow their operations.

It hopes to back up also support the manufacture'southward labor and operational needs by:

• Spending $100 million to work with partner organizations and labor unions to create a pipeline of well-trained workers.

• Spending $50 one thousand thousand on creating technical assistance and research and development programs to help independent business owners, entrepreneurs, producers and other groups like cooperatives as they piece of work to expand existing or create new processing capacity.

• Spending $100 million to reduce overtime and holiday meat inspection costs to aid pocket-sized and very pocket-size poultry, meat and egg processing plants proceed upward with unprecedented demands for their products.

And the administration hopes to lasso increasing meat, poultry and pork prices by issuing stronger rules nether the Packers and Stockyards Act and federal anti-trust laws.

It announced this calendar week that the U.S. Department of Agriculture (USDA) and the Department of Justice are jointly coordinating antitrust investigatory efforts and plan to launch a new program where farmers, ranchers, consumers and meat packer employees can report any competition-related concerns they have.

USDA also currently is working with the Federal Trade Commission to set a report on how competition impacts new market entrants in meat processing admission retail markets.

Business Writer Jack Money covers Oklahoma's energy and agricultural beats for the paper and Oklahoman.com. Contact him at jmoney@oklahoman.com. Please back up his workand that of other Oklahomanjournalists by subscribing to The Oklahoman.

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Source: https://www.oklahoman.com/story/business/agricultural/2022/01/09/meat-supply-chain-resiliency-targeted-through-billion-dollar-allocation-covid-cares-act/9081513002/

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