Nine federal lawmakers wrote a letter to United States Department of Agriculture (USDA) officials, seeking explanations about an apparent lack of oversight concerning the demise of Pure Prairie Poultry (PPP), a company for which the agency provided funding.
PPP filed for bankruptcy in September, then went on to cease operations at its plant in Charles City, Iowa. Ultimately, the company stated that it no longer had the resources to feed the more than 2 million chickens that about 50 contract growers in Iowa, Minnesota and Wisconsin were raising for PPP.
About 1.3 million of those chickens were being raised in Iowa, and the Iowa Department of Agriculture and Land Stewardship (IDALS) issued a press release on October 25 that stated those birds had to be depopulated, despite efforts on behalf of the state agency to find buyers for the chickens or a facility to process the birds.
The letter, dated October 25, was sent to U.S. Secretary of Agriculture Tom Vilsack and USDA Inspector General Phyllis Fong. Those signing the letter were all Republicans, and all either had constituents in the states where the chickens were grown or held leadership positions on congressional agriculture committees. Those included Iowa’s Sen. Chuck Grassley, Sen. Joni Ernst, Rep. Ashley Hinson and Rep. Randy Feenstra; Minnesota’s Rep. Brad Finstad and Rep. Michelle Fischbach; Wisconsin’s Rep. Derrick Van Orden; House Agriculture Committee Chairman Glenn “GT” Thompson and Senate Agriculture Committee Ranking Member John Boozman.
“In 2022, Pure Prairie Poultry was awarded a guaranteed loan of $38.7 million from USDA Rural Development’s Food Supply Chain Guaranteed Loan Program (FSCGLP) and a grant of $6.9 million from USDA Rural Development’s Meat and Poultry Processing Expansion Program (MPPEP). According to Pure Prairie Poultry’s bankruptcy court filings from the week of September 22, the company reported liabilities between $100 million and $500 million, with $50 million to $100 million in assets. Additionally, the company projected a negative cash flow of $1.8 million per week over the following six weeks. Further, it is our understanding that growers and feed mills affiliated with Pure Prairie Poultry have not been paid for months. Given this fact pattern, we remain deeply concerned about the lack of oversight USDA has provided in this case,” the lawmakers wrote.
“Over the past two years, USDA has provided $223 million in loan guarantees and grants to 30 meat and poultry processing companies. A press release from the USDA celebrated this funding as part of the Biden-Harris Administration’s “commitment to strengthen critical food supply chain infrastructure to create more thriving communities for the American people.” Unfortunately, the investment in this case instead ended in the loss of income, jobs, and poultry across three states.”
The letter included ten specific questions related to the agency’s oversight or lack of oversight concerning the Pure Prairie Poultry situation.
Elected officials comment
Several of those to sign the letter offered comments on the situation. Those include:
“Many of our poultry farmers in Wisconsin, Minnesota, and Iowa were left in the lurch by the USDA’s absence of oversight and accountability of Pure Prairie Poultry,” said Van Orden. “The USDA will answer for the $45.6 million in loans and grants given to Pure Prairie Poultry, and PPP will answer for what they did with that money before they stiffed our farmers.”
“USDA is responsible for keeping tabs on the taxpayer-funded grants it administers, but it clearly dropped the ball with Pure Prairie. Iowans and others across America’s Heartland have lost their jobs and their poultry market as a result of Pure Prairie’s closure. USDA must explain to Congress and the public what went wrong to help prevent a repeat scenario,” Grassley said.
“USDA has provided millions of dollars in taxpayer-funded loans and grants to meat and poultry processors across the country, which is why my colleagues and I are calling on USDA to provide answers,” said Finstad. “While expanding livestock markets and processing capacity is critical for farm country, the lack of oversight of these dollars by USDA harmed producers and caused a significant disruption to our nation’s food supply chain.”
“Iowa taxpayers deserve to know the full story behind the Pure Prairie Poultry bankruptcy and how the USDA approved nearly $46 million in taxpayer dollars for a company that left millions of chickens uncared for. This serious lack of oversight is extremely concerning and has caused massive uncertainty for our growers who are already facing a harsh farm economy,” said Feenstra. “Our letter to USDA will help us get answers for our growers and address the federal government’s carelessness with taxpayer dollars. I commend Secretary Naig for responding quickly and professionally to this crisis.”
