COUNCIL BLUFFS — Standing by a meat case filled with fresh cuts of beef, Agriculture Secretary Tom Vilsack handed over his credit card and ordered up six T-bone steaks.
“Corn-fed beef, you can’t beat it,” the former Iowa governor said during his visit Friday to Rustic Cuts, a farm-to-table butcher shop that opened here three years ago.
But because of a number of challenges, including intense consolidation in the meatpacking industry, the farmers and ranchers who produce such products for America’s tables have been getting an ever-shrinking part of the consumer dollar, Vilsack said.
To try to reverse that trend, Vilsack on Friday announced a series of executive orders and initiatives under President Joe Biden’s administration intended to increase competition and make agriculture markets more fair for producers.
Vilsack announced that the administration would make $500 million from the American Rescue Plan available as grants, loans and loan guarantees for small, startup meat-processing facilities, expanding national production capacity and giving local producers more places to market their livestock.
A new presidential executive order also directs the Department of Agriculture to consider new rules under the Packers and Stockyards Act to make it easier for farmers to bring and win claims against packers for unfair practices. Another proposed rule would protect farmers from retaliation if they speak out about such unfair practices.
Another directive asks the USDA to issue new rules on what meat products can bear the “Product of the USA” label, making sure that those meats are not only processed within the U.S., but raised here, too.
Still another order through the Federal Trade Commission seeks to limit the power of farm equipment manufacturers to require producers to use their services for repairs. That would make it easier for farmers to make their own repairs or use local shops.
All are part of a broader administration initiative intended to boost competition across a variety of industries.
“What it’s going to do is first and foremost create an opportunity to reverse what’s happening today out in the countryside, where producers are having to sell their cattle at a loss only to learn the processors end up taking that cattle and generating profit,” Vilsack said. “The profit ought to go both ways.”
Consolidation has been particularly acute in the beef industry, in which four large meatpacking companies dominate over 80% of the market. That consolidation has limited farmers’ and ranchers’ options for selling their products, given them a shrinking share of the consumer dollar and raised prices for consumers, the administration says.
Vilsack said it’s hoped that the $500 million pledged by the administration can be leveraged with private funds and state economic development dollars to generate billions for expanded meat production capacity. In addition to the COVID-19 relief money Biden is pledging, Vilsack hopes that Congress can be convinced to provide additional funds for the program.
“We have got to expand the amount of processing capacity in this country,” said Vilsack, who also served as agriculture secretary under President Barack Obama. “We can no longer rely on a handful of processors to do the job.”
Among those on hand to hear the announcement were farmers and ranchers behind two new startup plants already announced in the region, including one just south of the Bluffs and another in North Platte, Nebraska.
Chad Tentinger, one of the producers and investors behind the Cattlemen’s Heritage plant in Iowa, which is expected to employ 750 people, said there’s both a need and a demand for plants like his, producing beef that consumers will know was both raised and processed locally.
Tentinger plans to get cattle for the new plant from Iowa, Nebraska and South Dakota. And while he announced plans for his plant two weeks ago, he thinks that the new federal dollars can help the venture get off the ground.
“Our focus is simply to add capacity and work with farmers and producers to make sure that there’s always a market, and profitable market, for them to participate in,” Tentinger said.
Before the press event, Vilsack met with a number of regional agriculture leaders to brief them on the initiatives.
Nebraska Farmers Union President John Hansen, who has been involved in agriculture policy in Washington since the Nixon administration, called changes to stop packers from retaliating against producers long overdue. When a packer does that, it can leave producers with nowhere to sell their livestock.
“That is a biggie,” Hansen said. “Right now, we have no ability whatsoever to pursue legal remedy.”
The Nebraska Farm Bureau’s Mark McHargue said he will look forward to seeing the details on the executive orders. But he particularly welcomed the initiatives on new plant grants and equipment repairs.
“While not a silver bullet,” he said, “expanding our nation’s meat processing capacity would go a long way toward alleviating the current processing bottleneck, which has led to lower prices for cattle producers and higher prices for consumers.”