What Are Subsidies?

One of the first steps of starting a business is to make sure you have a viable business model. This generally includes knowing how to market your product or service, calculating your profit margins, and, crucially, knowing how you’ll fund your business. For Big Ag, many of these steps are the same — except the major players get significant help in clearing some of these hurdles thanks to the government.

Sometimes the government wants to encourage certain behaviors, whether this is to promote economic growth, address market failures, or support specific industries — and if ever the government wanted to support a specific industry, Big Ag is it. Subsidies can take many forms, including direct payments, tax breaks, or loans, among other methods. For Big Ag, subsidies often come in the form of grants, such as the ones provided by the U.S. Department of Agriculture (USDA), purportedly to promote competition and sustainability.

On the surface, agricultural subsidies make a lot of sense: few industries are as central to the success and stability of a nation as the one that keeps people fed. However, killing animals isn’t the only way to feed a country, and in the U.S., food sourced from animals receives about 800 times more public funding and 190 times more lobbying money than alternatives. It might seem surprising that an industry that generates billions of dollars in revenue needs such large subsidies. However, the industry is characterized by high operational costs, so grants can help keep these costs down artificially in order to increase profitability.

Agricultural subsidies can be used for a variety of purposes, including keeping food prices stable, supporting rural economies, and encouraging certain farming practices. The agricultural industry necessarily involves very high operating costs, but Big Ag subsidies go far beyond merely keeping an industry alive. The government throws so much money at Big Ag that the industry is able to monopolize the funds to alter the competitive and political landscape in their favor, not to mention the cycle of competition-stifling dependency that large subsidies create. In practice, agricultural subsidies serve to bolster the balance sheets for the players who already have the most to spend on ensuring the rules remain in their favor.

The USDA Grants

This analysis focuses on four grant types that were awarded to meat processing companies between 2021 and 2023:

1. The Meat and Poultry Readiness and Inspection Grant (MPIRG) is designed to assist currently operational facilities in becoming compliant with the Federal Meat Inspection Act or Poultry Products Inspection Act. The MPIRG claims to focus on improving processing capacity and efficiency, developing new and expanding existing markets, maintaining strong food safety standards, and increasing access to processing facilities for smaller farms.
2. The Meat and Poultry Processing Expansion Program (MPPEP) is designed to help processors expand their capacity to create better processing options for producers. USDA Rural Development claims that they designed the MPPEP to encourage competition and sustainable growth in the U.S. meat processing sector as well as to help improve the resiliency of the supply chain. Funds from the MPPEP can be used to build, modernize, or expand existing processing facilities; develop, install, or modernize equipment; ensure packaging and labeling requirement compliance; uphold safety requirements; offset the cost associated with becoming an inspected facility; staffing and operational costs; and posting USDA’s standard signage during construction of the project.
3. The Local Meat Capacity Grant Program is designed to provide funds to independently owned meat and poultry processing businesses. The funds can be used to modernize, increase, diversify, and decentralize meat and poultry processing capacity to provide better processing options for local livestock producers.
4. The Meat and Poultry Intermediary Lending Program (MPILP) is designed to provide funds to finance the start-up, expansion, or operation of slaughter or other meat and poultry processing in order to create a more resilient, diverse, and secure U.S. food supply chain. Funds from the MPILP can be used to purchase and develop land; construct new or modernize and expand existing facilities; develop, install, and modernize equipment and technology; improve leaseholds; ensure occupational and safety requirement compliance; refinance debt; purchase stock; make loans; conduct feasibility studies; undertake pollution control and abatement; handle waste management; and offset startup costs.

Although these grants all claim to help small independent businesses, the reality is that these grants stifle competition more often than not. Because the corporations who already have the most money receive these grants most often, it’s hard for the individual farmers and small sustainable farms who most need the money to get enough of a foothold to compete with already established giants.

In fact, less than a third of all farms benefit from agricultural subsidies, and the ones that do tend to not be the little guys trying to compete — they’re almost always already-established farms operating at a significant scale. This is partially because the system has a history of discriminating against farmers of color and small farms without the time, resources, or expertise to dedicate to applying for the grants that they, arguably, could use much more than the mega-farms currently receiving them. This results in grant dollars being largely concentrated in the states where the industry is already entrenched.

“Meat” The Grant Recipients

The top four recipients of USDA grants from 2021 to 2023 are all longtime players with deep roots in the industry. Perhaps not coincidentally, the owners of these companies are known for their political involvement as well.

1. Riverbend Meats LLC received a $25 million grant to help build a new state-of-the-art vertically integrated beef processing plant. Far from being a small start-up company that needed help getting its first facility up and running, Riverbend Meats has been operating for 30 years. The new facility includes extensive custom equipment and the installation of nine miles of mainline gas pipe, all of which is expected to double the plant’s beef processing capacity. The owner of Riverbend Meats is Frank VanderSloot. He is considered the richest man in Idaho with a reported net worth of $3.5 billion. VanderSloot also owns a successful multi-level marketing business and was a finalist for Pro Food World’s Manufacturing Innovation Award for his efforts at vertical integration. He uses his wealth to influence policy; he is a major Republican supporter and personally donates millions of dollars to conservative organizations and causes.
2. Cattlemen’s Heritage Beef Company LLC was awarded a $25 million grant to help offset the cost of commissioning a new 500,000-square-foot beef processing plant. Cattlemen’s Heritage Beef Company is owned by Chad Tentinger who considers himself a “small business owner.” He attended the 2023 State Of The Union at the invitation of Rep. Randy Feenstra (R-Iowa).
3. Prestage Farms of South Carolina LLC received a $24.95 million grant to purchase equipment and help with operating costs for a new turkey processing plant, which is expected to process eight million birds every year. Prestage Farms has been in business since the early 1980s and is the seventh biggest pig breeder in the United States. They raised 175,000 breeding sows in 2023, or 4.2% of all sows bred in the entire country. Prestage Farms has deep ties to political lobbying. The former CEO, Bill Prestage, passed away in 2022. He was posthumously inducted into the National Pork Council Hall Of Fame and was memorialized in the congressional record. Ron Prestage, the eldest son and successor of Bill Prestage in ownership of the company, has also been president of the National Pork Producers Council (NPPC) since 2013. The NPPC has spent $19.85 million from 2013 to 2023 on lobbying efforts. Ron Prestage is also a longtime Trump supporter.

4. Greater Omaha Packing Company Inc. received a $19.98 million grant for equipment purchases, automation systems, and facility improvements. Greater Omaha Packing Company is the sixth largest beef packer behind only The Big 4 (Tyson, JBS, Cargill, and National Beef) and American Food Groups. They process 875,000 cows every year, or 2.4% of all cows slaughtered in the country. The company brings in $1.7 billion in revenue annually and is owned by billionaire Henry Davis. He was named United Way Of The Midlands “Citizen Of The Year” in 2023 for his various charity work. He owns a $21 million home in Orange County, California, and an even bigger home in Nebraska. Meanwhile, Greater Omaha Packing Company has substantial political influence, and beef from the company was served at a 2019 “Made In America” event at the Trump White House.

All of these grants allowed the above companies to fund equipment and operational costs. Most businesses need to have a solid enough business model to be able to afford their own operational expenses — literally the cost of doing business. However, the agricultural industry is subsidized in such a way that some agribusinesses don’t need to be good at playing the game in a traditional, free market way. Because these Big Ag giants don’t need to worry about funding their own operations, that potential cash expenditure is freed up to consolidate profits, influence politics (changing or keeping the rules in their favor), or entrench their own market position instead.

Influence, Integration, And Industry Controls

Companies like Riverbend Meats, Cattlemen’s Heritage Beef Company, Prestage Farms, and Greater Omaha Packing Company all talk about embracing the free market and encouraging competition. With these subsidies, however, there is no true free market in the Big Ag world.

The fact that animal agriculture companies don’t need to worry about typical operating expenses leads to a variety of long-term consequences. One of these consequences is that companies can afford to vertically integrate. Vertical integration means that the same company owns various aspects of a supply chain, such as the farm where the animals are raised, the processing plant, and the company that labels and packages the processed meat (and sometimes even the store where the product is sold). This strategy effectively eliminates competition and allows the company to raise product prices while lowering quality. This is obviously bad for the consumer, but it’s bad for farmers, too.

Mega-corporations have the power to tell farmers what to grow, leading to monocropping and poor environmental outcomes. For example, the American Farm Bureau Federation (AFBF), a nonprofit lobbying group that claims to support ”average” farmers but actually aligns itself with agribusiness giants, prioritized pushing for generous taxpayer subsidies for commodity crops like wheat, corn, soybeans, peanuts, rice, dairy, and sugar, even as prices spiked (reaching record highs between 2019 and 2022) and farmers needed them less and less. (As a side note, the AFBF also aligns itself with the oil and gas industry and denies the science of climate change.) This kind of federal pressure encourages farmers to focus on production beyond all else, which creates conditions that push out small and midsize farmers, contributes to water and climate pollution, and causes overproduction and market distortion.

Furthermore, because there is no true competition, mega-corporations can continually outcompete smaller farms on margins. Fifty years ago, cattle ranchers made at least 60 cents and pig farmers made 40 to 60 cents for every dollar consumers spent on their products. Today, cattle ranchers make only 39 cents and pig farmers make 19 cents on the dollar.

While this reality is hard enough on the farmers struggling to make a living, it is also a problem for consumers. The four largest meatpacking companies in the U.S. control 85% of the domestic beef market and over half (55%) of the domestic poultry market. These companies can and do use their position to overcharge grocery stores, which pass the inflated prices on to end consumers. This means that not only do we fund mega-farms when our tax dollars pay for subsidies, we also pay extra for groceries. Meanwhile, struggling farm workers still need to eat; because they are so underpaid, many of them rely on government programs like food stamps, which are likewise funded by tax dollars.

In sum, this means that consumers pay taxes to fund subsidies that artificially create higher grocery prices while creating abhorrent conditions for farm workers, requiring even more tax dollars to be spent so those farmers can afford to eat the food they produce.

Vertical integration also means that power becomes even more concentrated in the hands of a few — often whoever got there first and became dominant in the industry early on. Iowa, for example, has great conditions for agriculture. One might think that would mean that companies in Iowa are set up well for a successful business to generate their own funds. Or maybe the government will generate a positive feedback loop by giving Iowa more grant money than any other state. From 2021 to 2023, Iowa received almost $93 million in grants — more than the bottom 30 states combined. Compare that to North Dakota, the state who has earned the next highest amount of grant money, who “only” received about $52 million — over half of Iowa’s earnings.

Iowa also received about 10% of all the USDA grants awarded between 2021 and 2023. This amounts to 14 more grants than the next highest state (Missouri, with 25 grants).

Based on current trends, the problem is only going to get worse. Between 1998 and 2023, Big Ag spent $3.25 billion on lobbying, and its spending has steadily increased. During the 1992 election cycle, the food industry spent $29 million. In 2000, Big Ag spent $62 million. In 2020, the industry spent a whopping $175 million. That’s a sixfold increase in less than three decades. Every year Big Ag spends even more than fossil fuel producers or the defense industry to keep regulations favorable for itself. Meanwhile, the retail landscape is so concentrated now that only four companies control 65% of the retail market: Walmart, Costco, Kroger, and Ahold Delhaize (until the 1990s, most people shopped locally or regionally).

Takeaways

Subsidies claim to be about protecting the little guy and encouraging competition, but because of a vicious cycle created by the interplay between grants and political influence, the exact opposite tends to be true. Heavily subsidized companies like Riverbend Meats, Cattlemen’s Heritage Beef Company, Prestage Farms, and Greater Omaha Packing Company — and their politically connected leadership — can pay off politicians to make sure the rules remain in their favor. This concentration of power stifles competition, harms consumers with higher prices and lower quality, and undermines the livelihood of smaller farmers.

Small farmers aren’t the only losers in this system either: animals lose when workers have no say over how the animals are raised because of the tight grip of giant companies over the meatpacking industry; the environment loses when small farmers are forced to monocrop and only plant subsidized crops, rather than crops most suited to their environment or most needed in the market; taxpayers lose when we ultimately have to foot the bill twice — first through the subsidies that disproportionately favor large agribusinesses and second through the higher prices the large agribusinesses ultimately create.

Not only do USDA grants fail to promote competition like they claim, they go a step further in that they actively shape the industry so those at the top stay at the top and those at the bottom can’t compete on a level playing field. Understanding this dynamic is crucial for advocating for policies that genuinely support animal welfare, sustainable agriculture, and fairness — both in the competitive landscape and in keeping prices down for consumers.

What’s Changed In 2025?

A leader’s job should be to fix problems and provide guidance and direction. As the U.S. faces a new presidential administration, the world is watching which direction Donald Trump will take the country. Unfortunately, not only has the current administration not helped any of the issues mentioned above, it is arguably making matters worse.

Egg prices have been soaring because of the recent bird flu outbreaks that have resulted in the deaths of about 10% of the egg-laying hens in the United States. In February 2025, egg prices hit a record high of $5.90, almost $3 more expensive than just a year earlier. It’s not surprising that the administration isn’t interested in helping the chickens suffering from the highly contagious disease, but it isn’t doing anything to help struggling consumers either. Rather than lowering trade barriers created by tariffs, they are more likely to provide financial aid for farmers and lower regulatory burdens. While there’s nothing wrong with assisting struggling farmers, the people actually working the farms often rely on government programs because they are underpaid in a system working against them to begin with.

Agriculture Secretary Brooke Rollins has announced a $1 billion plan to help farms recover from the bird flu outbreaks, but this money will go to making sure the farms can continue operating by indemnifying producers who cull their flocks and exploring methods to accelerate the repopulation of the flocks who were killed — not to the farmworkers who can’t afford their own products (and whose lives are made harder because the tariffs make equipment more expensive and the on and off nature fuels uncertainty), nor to the consumers struggling under inflated prices that are likely to be worsened even further by tariffs. The gap between worker wages and corporate profits has gotten so large that some lawmakers have even written to the Trump administration to scrutinize suppliers like Cal-Maine — which controls 20% of the U.S. egg market and reported a 718% increase in profit in the third quarter of 2023. Just like in the rest of the agriculture industry, market power in the egg supply chain is being increasingly consolidated, leading to the chance for companies like Cal-Maine to engage in price gouging and other unfair pricing practices.

Given how much money is in politics, and how much of that money comes from agricultural interests, it’s no surprise that the Trump administration would choose to take lobbying money and keep farms open and funded, rather than protect the animals or the workers on that farm. In 2025, we’re seeing the exact same issues in farming that Big Ag has perpetuated for decades with no signs of progress. On the bright side, the price of wholesale eggs has actually begun to drop, even as consumer prices continue to rise, in part due to decreased demand. As eggs become and likely remain unaffordable for the average consumer, less demand —  if it sticks — could ultimately mean less suffering for hens in the U.S.