Iowa egg processor to expand 50% with federal help

A central Iowa egg processor will expand its output by 50% with help from a new federal program that backs loans for those expansions.

Nutriom, of Panora, turns the equivalent of about 24 million eggs each year into a powder that can later be combined with water and heated to create food akin to scrambled eggs, among other products. The U.S. military is one of its biggest customers.

Iowa is the leading egg-producing state in the nation with an annual output of about 16 billion eggs, according to the Iowa Egg Council.

Nutriom is among 14 companies approved to get federally backed loans to expand their processing capacities under the Food Supply Chain Guaranteed Loan Program, U.S. Secretary of Agriculture Tom Vilsack announced Friday.

“There’s a wide supply chain in the middle that needs to be strengthened, and this company represents a good example of that,” Vilsack said.

The program was created by the American Rescue Plan Act with the goal of expanding food markets and supporting smaller processors. Vilsack has said the coronavirus pandemic exposed pitfalls in the nation’s food supply chain from having a small number of very large processors dominating food markets.

That was most evident for livestock, when the temporary closures of meat-processing facilities led to a sudden decrease in demand for animals and their subsequent mass euthanasia by producers who had nowhere to sell them.

The new U.S. Department of Agriculture program does not directly provide loans but assumes a certain measure of liability if the loans fail. In the case of Nutriom, the $11.1 million loan was facilitated by a local bank.

Leonardo Etcheto, the chief executive of Nutriom, said the loan guarantee from the USDA enabled his company to get a lower interest rate and to spend less money up front on fees associated with the loan.

Without USDA help, “it would have been much more difficult,” he said.

The expansion project is expected to be complete in about two years. As a result, Nutriom expects to add about seven employees. It currently employs about 30.

The Nutriom loan guarantee is the first to be announced by the USDA under the new program. Vilsack said 14 loans have been approved and that another 31 are pending, for a total of about $724 million. A USDA spokesperson declined to reveal the other projects because they “aren’t ready for public announcement yet.”

“Every one of those dollars creates jobs,” Vilsack said Friday. “Every one of those dollars is going to improve and strengthen the supply chain and provide opportunities like we’re providing to this company to purchase equipment to expand capacity to hire new people.”

USDA evaluates biosecurity to mitigate bird flu

On an egg-related note: Vilsack said the USDA continues to evaluate biosecurity measures that producers can implement to reduce the infections of commercial bird flocks by deadly and highly transmissible avian influenza. Two such outbreaks this year at Iowa facilities led to the culling of about 10 million egg-laying hens.

Unlike the last series of bird flu outbreaks in Iowa in 2015, the virus is being transmitted to domestic flocks by wild birds this year during the fall migration, not just the spring. State officials confirmed an infected backyard flock of birds in Dallas County this week — the first such confirmation since May.

All of the state’s 20 outbreaks this year — 15 at commercial sites and five backyard flocks — are believed to be the result of virus transmission from wild, migratory birds. Flock-to-flock transmissions were a major contributor to the spread of deadly bird flu in 2015. Nationally, Vilsack said about 15% of this year’s outbreaks were the result of those flock-to-flock infections.

“And we’ll continue to focus on the development of vaccines and things of that nature that will make it easier for us to constrain this,” he said.

The resurgence of highly pathogenic avian influenza this fall in the United States has led some to worry that it might infect flocks again during the next spring migration. Vilsack declined to speculate about that likelihood because it depends upon how long wild birds are closely congregated over the winter.

“I don’t think anybody can predict whether it comes back from year to year because it’s so much dependent on how long particular flocks are able to stay in a particular location, depending upon the weather,” he said. “And so if you can tell me what the weather’s going to be like tomorrow, much less next year, then I’ll be able to answer your question.”

Iowa Capital Dispatch is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Iowa Capital Dispatch maintains editorial independence. Contact Editor Kathie Obradovich for questions: info@iowacapitaldispatch.com. Follow Iowa Capital Dispatch on Facebook and Twitter.