Bear Paw setting up loan program for local meat processing

Bear Paw Development Corp. just received the largest grant in its history, $10 million, from U.S. Department of Agriculture Rural Development to set up a revolving loan fund for beef and poultry processing startups and business expansions.

Bear Paw Development Executive Director Paul Tuss, who is also represents Havre in the Montana Legislature, said this investment is a huge deal for Bear Paw and for the future of local meat processing, not just in their five-county area, but the whole state of Montana.

Tuss said Bear Paw is working in conjunction with five other economic development agencies across the state, meaning they can support local processors in nearly half of Montana.

“We’re very excited about it and we think it’s going to move the needle in terms of value-added agriculture in Montana,” he said.

He said Bear Paw Development is still working out the details of what the loan program will look like, as they only just received the funds, but they already have people contacting them who are interested in using it, and they were poised to make a decision on their first investment this week.

Local meat processing has been a subject of discussion around Montana for some time, including in Havre, with many legislators and industry figures advocating for more local processing capacity in the wake of the COVID-19 pandemic and mounting frustration with an increasingly consolidated industry.

Tuss said four corporations control the vast majority of the meat packing industry and that consolidation has made local processing difficult. As a result of this, he said, when the COVID-19 pandemic came and forced many facilities to shut down the supply chain was thrown into disarray and there were no local institutions able to fill the void, or at least help mitigate the effects of the crisis.

In addition to creating a more robust and resilient local system, he said, he hopes giving “the big four” some competition will lead to better prices for consumers, who will have a better idea of where their food is coming from, and let first-time entrepreneurs get a foot in the door.

In addition to that, he said, he thinks the prospect of more local processing is a boon to workers as well.

“If you’re working for somebody that you know, and might be your neighbor,” Tuss said. “It’s a heck of a lot more inviting than working for a large international conglomerate that is fairly faceless.”

He said the loan could allow starting businesses as well as existing ones to get their USDA certification as well, which can be a long process, but would allow them to sell product to other states.

He said this potential to expand markets represents a potential boost for the local economies Bear Paw and its fellow economic development agencies work in.

As for how the program will work, Tuss said, the exact details of what loans will look like is not nailed down just yet, but they are hoping to provide affordable interest rates so that both established operations and entrepreneurs just starting out can both take advantage of them.

He said they are committed to working closely with relevant local organizations when making decisions as to what projects to support and invest in. If someone is looking to get a loan to start an operation in Helena, he said, Bear Paw and its partners will work with local institutions to get an idea of the area’s needs and use that to determine how or if they should support it.

He said the fact that they can support new and existing operations in such a large swath of Montana is great, since it’s so rare to find an area that isn’t in need.

“I have yet to hear anybody that says, ‘We have enough local processing,’” he said.

He also said they are working with local banks so that they can potentially arrange partnerships where one of their loans can be part of a large financial structure entrepreneurs can use, with funds being loaned by both Bear Paw and a bank.

Tuss said one thing that’s important to note about this is that it is a revolving loan program, meaning all the money they are repaid goes right back into the program to be lent out again, meaning that $10 million represents a permanent injection of funds into local economies.

As for what this means for Bear Paw Development, he said, this massive grant is a vote of confidence from USDA that they can really help their region and an indication that their organization is still going very strong after more than half a decade in business.

He said this grant is a great opportunity for a local industry whose prospects are looking up in the near future.

“Right now, this is a very exciting industry in Montana,” he said. “For the last few years, there’s been a lot of conversation about, ‘How do we expand, how do we do better?’ And the federal government just gave us 10 million reasons why we can do that … we’re excited about getting these dollars into main street Montana.”