USDA Rural Development has awarded $10 million to Lewis & Clark Development Group to create a new Revolving Loan Fund (RLF) for North Dakota’s meat and poultry industry. The grants are part of the Meat and Poultry Intermediary Lending Program (MPILP), which is designed to expand existing meat processing plants and build new operations throughout rural America.
It is the largest grant ever awarded in LCD Group’s 53 year history.
“This is a game-changer for North Dakota’s meat and poultry industry,” says Brent Ekstrom, LCD Group executive director. “This grant is also a validation of the work we’ve done over the years in expanding economic opportunities throughout North Dakota and across all sectors.”
The award is one of only eight MPILP grants awarded throughout the country by the USDA.
It is also part of a $10.5 million grant awarded in North Dakota. The remaining $500,000 was awarded to South 40 Beef of Mott.
Consolidation in the Meat Industry Hurting Local Producers and Consumers
The objective of the MPILP is to strengthen the financing capacity for independent meat and poultry processors, and to create a more resilient, diverse, and secure U.S. food supply. Almost everyone agrees that it’s needed.
North Dakota is one of America’s top 10 beef producing states. However, consolidation and corporate mergers within the meat industry over the years have dramatically cut down on the number of meat processing facilities. The state’s meat and poultry industry has been adversely impacted by not having an enough meat processing facilities in North Dakota. Currently, on average, producers have to wait almost a full year to have their meat and poultry processed.
Lewis & Clark Regional Development Council (RDC) President Steve Lee knows of these challenges first hand as a producer himself.
“I don’t know any producers that are not booked solid, it’s just part of the game. I think this opens a real good avenue potential for producers to finish more cattle in North Dakota and provide local product to the local people,” notes Lee.
That is both the hope and the intention of the MPILP according to USDA Rural Development State Director Erin Oban.
“Being able to support small businesses in our communities creates more opportunity for North Dakotans to know where their food is coming from, to support local producers, and bring down the costs,” says Oban.
COVID-19 Compounded the Challenge
The lack of processors was already a challenge before the COVID-19 pandemic struck, which exacerbated the challenges facing the meat and poultry industry. In response to the challenge, the Biden Administration through the American Rescue Plan directed USDA to expand the nation’s meat and poultry processing capacity with a special focus on stimulating economic opportunities in rural areas.
“USDA Rural Development was given significant responsibility to design and launch programs that would respond to major challenges that have long-impacted our country’s food supply chain,” stated Oban. “The priority of the Biden Administration to address this challenge created an opportunity for North Dakotans.”
It’s an opportunity that LCD Group is ready for.
MPILP Provides Both Assurance and Certainty
According to Ekstrom, LCD Group has seen a significant increase in commercial loan applications for local meat processors before the pandemic and the interest remains high.
“There are broader issues within the food supply chain that are impacting rural North Dakota communities. One of the distinct advantages of this revolving loan fund is we will be able to provide initial funding to meat and poultry processors and then eventually include a broader base of business in the local food supply chain that are connected to the processing industry,” said Ekstrom.
Ekstrom says the focus for now is to work with existing meat and poultry processors throughout the state along with those thinking of getting into the sector.
“This program is an incentive for processors to invest to expand or start operations. We already know the demand is high and the supply is abundant. We are now able to mitigate the risk of expanding or starting a processing business,” Ekstrom adds. “For producers and rural communities this provides assurance and certainty.”
On this point, Ekstrom and Oban see the MPILP as having a ripple effect throughout the state that will extend beyond producers and processors.
“The more we can support local producers, local processing, and making sure that we keep those costs down for consumers, the better our quality of life in places like North Dakota is going to be,” says Oban.
More About South 40 Beef. Earlier this year, LCD Group helped South 40 Beef through the SBA 504 Loan program. Click here to learn more about how South 40 Beef owners John and Kim Roswech’s vision has boosted the economy and is transforming meat processing in southwestern North Dakota.
Also… Last year, LCD Group provided assistance that allowed Dan and Jessica Selensky to open Legendary Meats in Center, North Dakota.