USDA awards $140M in grants to help lower food prices

In the days leading up to the presidential election on Nov. 5, the U.S. Department of Agriculture (USDA) announced over $140 million in grants aimed at helping farmers, increasing competition, and lowering food costs.

The USDA awarded more than $120 million to fund six fertilizer production projects in Arkansas, California, Illinois, South Dakota, Washington, and Wisconsin through the Fertilizer Production Expansion Program (FPEP). This program, funded by the Commodity Credit Corporation, provides grants to independent business owners to help modernize equipment, adopt new technology, build production plants, and more.

FPEP was created to address challenges facing U.S. farmers due to rising fertilizer prices, which more than doubled between 2021 and 2022 due to factors such as the war in Ukraine and a lack of competition in the industry, according to the USDA. To cover these increased costs, farmers have raised food prices.

To date, the USDA has invested over $368 million in 67 projects through FPEP, creating new jobs and boosting domestic fertilizer production across the country.

The USDA also announced $20.2 million in awards for 26 projects through the Local Meat Capacity (Local MCap) grant program, which aims to expand processing capacity within the meat and poultry industry.

The Local MCap program supports smaller-scale meat and poultry processors, with the goal of increasing processing availability and providing more options for local and regional livestock producers.

The USDA has funded a total of 97 projects for $55.8 million through Local MCap.

In October, the USDA reported that retailers, distributors, and packers in the meat industry appear to be engaging in unfair business practices. These include pricing structures, marketing decisions, and overall relationships that enhance market dominance at the expense of competition in the meat industry.

The report, titled “Interim Report: Competition and Fair Practices in Meat Merchandising,” is part of a multistep process the USDA is conducting to fulfill President Biden’s executive order on promoting competition. The initiative aims to foster fair and competitive markets for American farmers and ranchers while lowering food prices in the U.S.

In September, the average price per pound for meat across all cuts and types—both fixed and random weight—stood at $4.74, up 2.2% year-over-year, according to data from marketing research firm 210 Analytics. The average price for processed meat stayed above $5 but dropped by 1.1%.