Meat Processors Put ISDA Grants to Good Use
Published: Friday, April 30, 2021
The owners of Integrity Meats on U.S. 33 in Churubusco had run smack dab into a road block.
Nine of them, to be exact.
Terry Yarde and Roger and Whitney Stahlhut wanted to continue to upgrade and expand the local processing operation they started in a former hardware store three years ago, but it turns out lenders are reluctant to issue loans on single-purpose equipment like high-speed bacon slicers.
The ownership team knew that all too well because they were turned down by nine different banks, Yarde explained last Friday during the Northern Indiana Meat Processing Tour conducted by Indiana State Department of Agriculture officials.
Then, just over a year ago, the COVID-19 pandemic began to tighten its grip on America. Grocery meat counters were depleted, restrictions were placed on how much meat a consumer could buy and the supply chain was disrupted by the closure of major packing plants in Indiana and across the country.
Eventually, a solution in search of several problems came to Integrity Meats and similar operations around the state by way of the federal Coronavirus Aid, Relief and Economic Security Act.
Armed with nearly $4 million in CARES funding, ISDA implemented the Indiana Meat Processing Expansion and Development Program with the intention of getting much-needed cash, in the form of grants, into the hands of locally owned and operated meat processors.
Integrity Meats received an $86,500 grant, which it was required to match dollar for dollar. Yarde and the Stahlhuts used the money to make significant improvements to what was already a well-designed and innovative facility and buy new equipment, like that $40,000 bacon slicer.
They were able to keep their tax-paying employees on the job while creating a safer and more efficient work environment; keep beef, pork and related products available for their existing clientele; and expand their customer base to new buyers who had never thought of setting foot in a butcher shop.
The other stops on the ISDA meat tour—Heritage Meat Haus in Laotto, and Monon Meat Packing and Catering Inc. in Monon—reported similar enhancements and advancements thanks to CARES grants.
About 95 percent of Integrity Meats' business revolves around custom orders from producers requiring processing of the cattle and pigs they raise. Integrity Meats' also has a sparkling new storefront with refrigerated fresh cuts and freezers stocked with selections from livestock Yarde and the Stahlhuts raise on their own farms.
"We were able to get more equipment so we could move things through faster and help get more of the custom people in," Yarde said. "We almost doubled capacity. COVID raised the number of people we had coming through, and with the grant money we were able to speed up the process.
"When other places were running out of meat, we were able to have meat available (for walk-in customers), and once you get them to come in and try it, and see that it's locally raised so they know where it comes from, it means a lot to them. The people we helped get through the pandemic and came here for the first time are staying, and now we can handle that influx of business."
Roger Stahlhut recalled one day, after pandemic panic buying all but cleaned out the shelves at area supermarkets, when more than 600 shoppers came through Integrity Meats' doors. Customers were taking wrapped ground beef off the cart before workers could put it in the freezers.
The company seamlessly was able to shift the emphasis from the custom orders to ramp up production for walk-ins.
"With the grant, we had ergonomics, safety of our employees and speed-to-market in our head," said Whitney Stahlhut. "Our whole goal was to make it faster so we could get more through our building, and we've been able to do that."
Integrity Meats wasn't looking for a handout, Yarde said, but would have been foolish to pass up the opportunity to buy equipment essentially at half price.
"Without the grant, we wouldn't be where we are now," said Roger Stahlhut. "We paid the $173,000 for equipment up front, and then we had to show the state receipts for everything we paid, and then they reimbursed 50 percent of it."
The company is booked at 150 percent capacity, including those on a waiting list, for the remainder of 2021 and is already at 75 percent for 2022.
"We're talking about animals that aren't even born yet," Yarde said.
Of 60 CARES grant applications received by ISDA, 40 were completed throughout the state. In Michiana, processors in Lake, LaPorte, Marshall, Elkhart, Noble, DeKalb, Whitley and Allen counties received funds.
The grants supported 660 full-time jobs and created 135 more (a 20-percent increase); supported 267 part-time jobs and created 72 (27 percent); and supported 35 contract jobs and created 30 (85 percent). The average processing capacity increased 97 percent per facility and the median increase was 58 percent.
While the businesses benefitted directly from the grants, ISDA Director and meat tour leader Bruce Kettler said taxpayers should feel good about their investment.
"It will allow (the processors) to do more, and for a lot of our folks, they were able to add capacity so there were jobs that were affected," he said. "And, if you've got a local source of food for people, it might be better quality because it typically would be coming from a local butcher.
"You've probably heard the term 'food deserts,' so some people don't have a good, close source of protein. In a lot of cases, these folks were able to be close (to customers), provide local jobs and the tax base that comes with that because they pay taxes locally. I think there are downstream benefits from doing something like this."
Heritage Meat Haus owner Jeremy Lutter received $112,700 in grant money, to which he added $298,000, to modernize the former Laotto Meats, which he purchased a little more than a year ago. He used $6,000 from the grant to help replace an old four-door freezer with a 12-door model for the retail operation.
"As everyone knows, when COVID first hit, the retail shelves were empty, so this (grant) allowed us to have a place where we can have frozen stuff where people can see it," Lutter said. "Hopefully, this never happens again, but if there is another rush like that, at least we can have (the freezers) filled up."
Grant money helped expand the size of the operation and purchase a new refrigerated display case for fresh meats, new scales, processing and smoking equipment and an impervious epoxy covering on floors throughout the facility. The grant also allowed Lutter to hire three more full-time and two more part-time workers just to keep up with demand.
"Things have changed so much since last March (2020), it's crazy," he said. "This has brought a lot of younger people back to custom processing where they share a whole animal with their relatives or three of their friends. I would have never thought in a million years that someone under the age of 35 would have brought a hog in here to have processed.
"I think some will stay with it because they know the quality and they know it came from here and not someplace overseas or who knows where?"
Since the improvements, Heritage is processing 13-14 beef cattle a day, up from eight to 10. About half of the business is custom processing and half is retail with livestock coming from nearby producers, including a husband and wife who work in Heritage's processing plant.
"Without the grant, we'd be having a completely different conversation for sure because I just wasn't sure how I was going to pay for a lot of the things we needed to have done," Lutter said. "It wasn't just for production, but more for worker safety, spreading people out and making it a more enjoyable place to work. And, while we didn't double production, we are up 80 percent."
The ISDA program has achieved its immediate goals, while improving the local meat processing infrastructure in a way that will serve as an insurance policy in the event another pandemic-like crisis impacts the statewide economy.
"The impetus from this program was a direct-need look at our local industry," said Andrew Carty, director of the ISDA's Economic Development Division. "Hearing from local processors as well as consumers, we identified a need to access this kind of fresh food, to know where it's coming from and how it's prepared right in their own community.
"They're getting customers who came in maybe because of the pandemic but now they're not leaving. This solves that grassroots need and keeps that momentum going, but, forbid that something like this ever happens again, we've got a more resilient and more robust supply chain already in place that can better handle those kinds of bottlenecks."
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