As the news releases keep rolling out of the White House and statehouses trumpeting the hundreds of millions of dollars in grants, funds, loan guarantees and other support for small and independent processors, I’m increasingly concerned.

I would love to think that these investments will foster a matrix of locally owned packinghouses and processors that are closely integrated with the community and fill a need for both producers and consumers in their regions.

What I actually think is that government is basically setting this cash on fire and pouring more gasoline on the blaze with every announcement.

I don’t think these funds are rank hand-outs, but a sincere effort to respond to the supply chain disruptions that were brought on by the pandemic and seemingly were made worse by the high level of concentration in processing capacity in the U.S. That this “sincere effort” is being made by politicians who have no clue about the meat processing industry seems to be what’s fueling this conflagration.

I love reading about the start-ups and the improvements and expansions being planned by local processors across the country. These folks and their companies are the beating heart of the meat industry; nobody is more passionate about feeding their communities.

But the economy is an unbiased and heartless machine all its own. And right now, the demand for new processing capacity is non-existent. Beef cattle? At historically low numbers. Poultry? HPAI looks like it will deliver another wallop to flocks around the world in 2023. Pork is faring better, but hog inventory numbers are down as well. Cold storage space is stuffed to the rafters with protein. It’ll be a year, or years, for the cycles to trend the other way.

Like a flashover event, I think the artificially energized small processor sector will continue to heat up until conditions are right for all combustible materials to go up in flames at one time.

An economic meltdown in this arena will hardly make a blip in the overall U.S. economy. City-dwellers will likely be completely unaware, unless they read the economic news that’s buried at the bottom of their scroll. But the small communities and the people who have poured their hearts into these ventures likely are going to suffer, and nothing will be fixed.

I do think that consolidation in the meat industry has progressed to an economically tenuous place. As a matter of long-term survival, the industry needs to diversify its operations. But not this way.

Do you agree? And, what should industry, or the government, do instead?

How much money is too much money?

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