USDA Grants $140M to Reduce 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 supporting farmers, boosting competition, and lowering food costs across the nation.

The USDA allocated more than $120 million to fund six fertilizer production projects through the Fertilizer Production Expansion Program (FPEP). This initiative, supported by the Commodity Credit Corporation, provides grants to independent business owners for modernizing equipment, adopting new technology, and constructing production plants in states like Arkansas, California, Illinois, South Dakota, Washington, and Wisconsin. The FPEP was introduced to tackle the rising fertilizer prices that more than doubled between 2021 and 2022, due to factors like the Ukraine war and industry competition gaps. These price hikes have been a significant driver of increasing food prices for U.S. consumers.

To date, the USDA has invested over $368 million into 67 FPEP projects, leading to job creation and an increase in domestic fertilizer production.

In addition to fertilizer investments, the USDA announced $20.2 million in funding for 26 projects through the Local Meat Capacity (Local MCap) grant program. This program focuses on expanding processing capacity within the meat and poultry sectors, specifically supporting smaller-scale processors to offer more options to local and regional livestock producers.

The USDA has so far funded 97 projects totaling $55.8 million through Local MCap, further addressing food price inflation by increasing market competition and availability of local products.

Earlier in October, the USDA released a report indicating that unfair business practices within the meat industry—such as pricing structures and marketing decisions—are contributing to market dominance and hindering competition. This report, part of the USDA’s broader initiative to promote fair practices, aims to align with President Biden’s executive order to foster competitive markets for American farmers and ranchers, ultimately working to reduce food prices.

As of September, the average price per pound for meat across all cuts stood at $4.74, reflecting a 2.2% increase from the previous year, while the price of processed meat remained above $5 but experienced a slight decrease of 1.1%.