OXFORD, Ohio — USDA Secretary Tom Vilsack traveled to Andy and Jessica Korb’s stockyards and the site of their future processing plant to announce that USDA is distributing $100 million under the new Food Supply Chain Guaranteed Loan Program,

“The way these loan guarantee programs work is that we essentially say to banks and other financial organizations that are providing credit to folks like Andy and Jess to build facilities or expand facilities, that we will guarantee the repayment of that loan,” Vilsack said. “In this case, we’re guaranteeing up to ninety percent of the loan which reduces significantly the risk that lenders may have in providing resources to a facility that’s just getting started or one that’s expanding significantly.”

The Korbs hope to break ground on the Stockyards Packing Co., LLC. in January. 

Covid led them down that path to the meeting with Vilsack. A month before the pandemic hit, they bought Tri-State Livestock, a stockyard, as a place to stage their cattle. Then Covid shut down Korb’s auctioneering and contractors’ businesses. 

“I stared down the barrel of not a lot of income coming in,” he said.

They sold some freezer beef until it became almost impossible to get anything harvested. He and Jess did some brainstorming, talked to people, and decided that putting a processing facility next to the stockyards “was going to be as good of an opportunity as anything for our family.”

Not having experience in the business, Korb did research and toured 29 harvesting facilities from Iowa to Pennsylvania. 

“The first thing I did when I toured a facility was to ask them, what was the one thing you hated and the one thing you loved?”, he said. “I took a lot of videos, took a lot of measurements, and came up with the blueprints we currently have.”

He received good input from Dr. Steve Moeller, with the Meat Science Dept. at OSU, and Rick Heffelfinger of Heffefinger’s Meats Inc., a large processing facility in Jeromesville, Ohio. Korb hopes to automate as much as possible to overcome labor shortages. 

He talked with USDA Rural Development, which provides loans and grants to help expand economic opportunities in rural areas. He told them about the struggles he had with the availability of information.

“With new packers and processors, people trying to get this type of business off the ground, the amount of available information was virtually nonexistent,” Korb said. “It was a lot of time invested in tracking down the people, putting together information the best I could, and doing a lot of searching to find people that would help us.”

When Vilsack was asked why he chose to visit the Korb’s to announce the loan guarantee program, he said:

“I think Andy and Jess are a representative of the kind of facility that is needed in the country and the kind of operators that we want to be able to help assist, two young folks with a young family and they understand and are trying to meet a demand from their community and trying to create a few job opportunities as well,” Vilsack said.

The loan program began several months ago when President Biden asked USDA to look at competition issues.

During his visit, Vilsack also had a roundtable discussion with area producers. What he heard was a dual challenge, he said. Cattle producers aren’t getting a fair return for the amount of work they’re doing, and there is not sufficient capacity to have cattle processed. 

“Whether you’re talking about competition or whether you’re talking about capacity, the answer is the same,” Vilsack said. “We have to have expanded processing facilities. So what Andy has outlined to you today (his plan for the processing facility) is a story that needs to be told and retold in a number of locations across the country.”

The department realized that small and medium-sized facilities incurred expenses for overtime during the pandemic, Vilsack said. During the roundtable, producers said they saw an increased demand for locally processed food. That put a strain on existing facilities. 

The first step USDA took was to help more than 2,300 small processing facilities by reducing their inspection costs which allowed them to stay in business, Vilsack said. The second thing was to find ways for facilities to transition from meeting a local need with in-state opportunities for sales, to facilities that could modernize and expand their market to allow interstate sales. 

The third step was the loan guarantee program which could help people like the Korbs get funding to build their facility. Using the guarantee, banks can make loans for mid-supply chain expenses and needs. 

USDA is also putting the finishing touches on an opportunity, after the first of the year, to provide grants for larger and smaller-scale processing operations.

“We’re going to support the local economy as much as we can,” Andy Korb said. “That’s where we’re from and that’s what we want to do.”

Currently, the Korbs are waiting for county approval for the plans and hope to break ground in January for The Stockyards Packing Co., LLC. They are already besieged with calls from producers wanting to schedule dates to bring in their animals. 

For information on the loan guarantee program visit https://www.rd.usda.gov/foodsupplychainloans.