USDA Faces Scrutiny Over $45.6 Million Loan Guarantee After Iowa Poultry Plant Closure Leads to Mass Culling

Agriculture Secretary Tom Vilsack defended the USDA’s loan guarantee programs following the sudden shutdown of Pure Prairie Poultry, a broiler processor in Iowa.

The facility, which had received a $45.6 million USDA-backed loan, ceased operations in late September, forcing the culling of 1.3 million chickens across 13 Iowa farms.

The event has spurred Republican lawmakers to question USDA’s oversight of its loan programs, asking for an in-depth explanation on how such a substantial investment could end in failure.

Vilsack, addressing the press, highlighted that Pure Prairie Poultry’s closure is an isolated incident within an otherwise highly successful program.

“The collapse of the broiler processor was an unusual circumstance,” he stated, further noting that USDA’s overall loan portfolio boasts a success rate close to 97%.

Vilsack emphasized that “You can compare and contrast our portfolio and its performance to any commercial bank in the country — any commercial bank — the default rate is very, very low.”

Pure Prairie Poultry, based in Charles City, Iowa, had previously been among the first recipients of a USDA loan guarantee and grant package aimed at expanding meat processing capacity across the U.S. as part of the Biden administration’s broader initiative.

However, when the facility closed unexpectedly, it left farmers scrambling to manage and feed approximately 2 million chickens across multiple states.

Efforts to secure a processor willing to take the birds ultimately failed due to creditor interventions, and the state of Iowa resorted to culling the chickens.

Vilsack expressed hope that a new owner might step forward to take over the facility, which is still viewed as modern and well-equipped.

“I’m hopeful that we find somebody who’s willing to take it over and reopen it because obviously there’s a need,” he said.

He also noted that USDA is working to file claims on behalf of impacted farmers in the bankruptcy proceedings, ensuring that they have priority under the Packers and Stockyards Act.

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