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New grant program aims to help small-town locker plants survive and expand

Father-son duo in Leigh, Nebraska, got wiped out by a tornado but hoping to revive the business
Oakland Meat Processing
Posted at 11:55 AM, Jun 07, 2022
and last updated 2022-06-07 12:55:53-04

LEIGH, Neb. (Nebraska Examiner) — Kevin Good saw the dark clouds coming, but he said he was “too stubborn” to take cover inside the small butcher shop he and his son had recently purchased north of town.

“I kept thinking, ‘It’s not going to hit us, it’s not going to hit us, it’s not going to hit us,’” Good said. “All of a sudden, the lights went out.”

“And then we heard a boom … and then a second boom.”

One of their employees, Brook Dillon, who was also in the building, looked out the window to see a metal building, just across the parking lot, flying away.

Kevin Good
Kevin Good, left, and his son, Trevor, are hoping that a new grant program will help them resurrect a small meat locker north of Leigh destroyed by a tornado in December.

Rare December outbreak

The tornado, part of an unprecedented outbreak of twisters on Dec. 15, blew out a wall and destroyed several pieces of equipment inside the business, Country Butcher, which Good had helped his son, Trevor, purchase only 11 months earlier.

The building was declared a complete loss.

“We’re starting basically from ground zero,” Trevor Good said.

But the Goods, as well as other small meat lockers in Nebraska, are seeing renewed hope to expand, upgrade or rebuild their business via a new state program, the Independent Processor Assistance Program.

The program, passed by the Nebraska Legislature and signed by Gov. Pete Ricketts this spring, allocates $10 million to small meat processors like the Goods. The grants will help eligible meat processors with fewer than 25 employees and less than $2.5 million in sales. 

ARPA funds

The money came from the state’s $1 billion-plus allocation from the American Rescue Plan Act enacted under President Joe Biden. The grants will be allocated by the Nebraska Department of Agriculture.

State Sen. Tom Brandt of Plymouth, the sponsor of the processor assistance legislation, said the COVID-19 pandemic illustrated how easily the food chain can be disrupted, particularly when it comes to fresh beef and pork.

At the beginning of the pandemic, large meatpackers such as Tyson and Cargill were operating at 60% to 70% of capacity because of illnesses among workers. When cattle and hog producers sought an alternative in small-town locker plants, they found that the businesses were overwhelmed, with waiting lists of more than a year to get animals processed.

Brandt said he could typically get an animal in for slaughter within three or four weeks at his local locker plant in Diller.

Pandemic caused waits, price hikes

After COVID-19 arrived, the wait was 16-18 months, which the senator said is longer than it takes to finish a steer.

The lack of capacity, and slowdowns at the big packers, helped contribute to a shortage of meat and exploding prices for beef and pork at the supermarket. 

If hogs don’t get to a processing plant in normal time and grow too large, they can’t be slaughtered at a normal processing plant, Brandt said. 

He said he was offering his pigs at a cut-rate of $100 a head to anyone who could butcher them themselves. There were also reports of some hog producers euthanizing pigs because they had too many to give away or sell on the cheap.

The impact was felt on the farm and ranch — the Platte Institute, along with the Nebraska Farm Bureau, estimated the losses suffered due to supply chain disruptions at $971 million for beef producers and $166 million for pork producers. 

Fragile supply chain

Johnathan Hladik of the Center for Rural Affairs, one of the groups that supported Brandt’s proposal, said helping small meat processors expand won’t, in itself, solve the nation’s supply chain issues with meat, but it will certainly help. About 17 other states, he added, have used pandemic-related grant funds to help small meat processors.

Hladik, who farms near Craig, said more and more farmers are turning to direct marketing their pork or beef directly to consumers because the big meat packers don’t want to mess with small farmers.

“We can’t do our thing without independent meat processors,” Hladik said.

Social media, he said, has made it a lot easier to reach a direct consumer than it used to be. Shop Nebraska Farms is one Facebook page he uses; Nebraska Food Cooperative is another.

Eliminate middle man

“You can eliminate a lot of the middlemen when you market your product that way,” said Hladik, who raised about 50 hogs. “It’s a lifeline for a small farmer like myself.”

Plus, he said, consumers are looking for affordable and nutritious food options. 

And helping more small farmers make a living helps small communities, by keeping more people in the area.

Small-town meat lockers have been declining in number in recent years, Hladik said. He told state lawmakers there may be 80 to 90 in the state. And many of the lockers still in business are aging, he said, and could use more modern equipment.

Oakland plant

One example is Oakland Meat Processing.

Aunbrea Zeleny said the family-owned business in the northeast Nebraska farm town was using 1960s equipment, and employees worked overtime, shoulder to shoulder, in a small building to process the deluge of cattle and hogs that local farmers brought in during the pandemic.

“We made it work,” Zeleny said, estimating that the 10-employee plant had to turn down 10,000 hogs.

She said she explored a pandemic-related USDA grant program for small meat processors, but that program only aided expansion of existing buildings, which didn’t work for the Oakland business.

The meat processing firm is now building a new headquarters on the edge of town, and Zeleny said the grant program passed by the Legislature could help the business purchase modern equipment. 

The new plant, which is expected to open in October, will be three times larger than the existing Oakland Meat Processors, she said, and may allow the hiring of 14 more employees.

That’s huge for Oakland, a population of 1,575, which recently lost a major employer, a local hospital. 

In Leigh, a farm town of 375 people north of Columbus, the Goods are hoping to have a similar impact.

 They project that they could add two or three more employees to their current workforce of three if they can obtain a new location and get it set up for processing beef and pork.

The State Department of Agriculture, Hladik said, may be ready to take grant applications by August or September. He said he expects a lot of firms to apply— 32 out of 34 locker plants surveyed earlier this year expressed interest.

Kevin Good said he doesn’t know how he and his son, now 23, would be able to afford a new location while still paying off the one destroyed by the tornado.

“We took such a big hit on that last deal,” he said. “The grant money would be phenomenal for us.”

Learn more about the Center for Rural Affairs here.

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