SALEM — Oregon meat processors could vie for $10 million in grants under a bill that seeks to build on a state inspection program authorized last year.

House Bill 2785 would create a grant program overseen by the state’s Department of Agriculture to invest in constructing, expanding and upgrading meat processing facilities.

The proposal aims to help meat processors who’d operate under the ODA’s state inspection program, which would regulate these facilities for in-state commercial meat sales.

Once the state inspection program is fully functional and approved by the federal government, meat from these facilities could also be sold in interstate commerce.

The proposed grant program would also invest in meat processors who want to be directly inspected by USDA, which would permit their products to cross state lines regardless of the state inspection program’s status.

An amended version of HB 2785 being considered by the House Agriculture and Natural Resources Committee would carve out $300,000 for upgrades to Oregon State University’s meat science lab and make $9.7 million available for grants.

Lawmakers revived the state inspection program last year after the coronavirus outbreak disrupted the operations of major meat packing facilities and increased demand for local slaughter and processing options.

“The COVID-19 pandemic revealed a break in the marketing chain for all livestock producers, as there has been an overall lack of capacity to process livestock into meat in Oregon,” said Carol Lorenzen, head of OSU’s Department of Animal and Rangeland Sciences.

The ODA’s previous state inspection program was eliminated for budgetary reasons five decades ago, and the agency expects time and money will be needed to get the program up and running again.

The agency was allocated more than $900,000 and three full-time positions to restart the program last year but expects to require another $600,000-$800,000 to make it fully operational.

Aside from the $10 million grant proposal, lawmakers are also considering bills that would require state regulators to study “barriers to family-scale meat production” and the possibility of permitting animal rendering facilities in Oregon.

Currently, Oregon has 13 processing facilities overseen by USDA whose products qualify for interstate retail sales, and another 16-non federal custom processors that slaughter livestock for their owners or process game animals.

When demand for meat processing surged in 2020, PK Pastures near Sweet Home was bumped from its processing slot and couldn’t sell that pastured pork and poultry at farmers markets or to commercial wholesalers, said Kait Crowley, its co-owner.

“When there is a squeeze, small producers like us are most likely to get the boot from large facilities,” Crowley said during a recent legislative hearing on HB 2785.

Wendy Bingham, a beef producer near North Powder, said her company currently uses a USDA facility in Idaho that’s 2.5 hours away in one direction, adding costs and reducing productivity.

Though there are meat facilities closer in proximity that do a great job, they’re not federally inspected and thus cannot process meat for commercial sale, she said.

If these facilities became USDA inspected, it would greatly benefit the local economy, Bingham said. “People are looking to find protein sources that they know, trust, and have a personal connection to, who treat their animals humanely.”