- Diversify dairy product markets to reduce risk and develop higher uses for dairy products
- Promote business development that diversifies farmer income through processing and marketing innovation
- Encourage the use of regional milk production
- Value-chain and commodity innovation and facility and process updates for dairy process
- Product development, packaging, and marketing of dairy products
- Improve animal health, well-being, and/or performance
- Enhance labor efficiency
- Reduce energy costs or environmental impact (i.e. carbon-footprint or GHG emissions)
- Increase utilization of the farm’s land base
- Improvements to existing facilities to reduce the impact of heat stress and seasonal milk production swings
- Investments in raw milk storage, cooling capacity, and/or transportation efficiency
- Modernization and improvements to milk harvest
- Improvements to feed and forage management and storage opportunities
- Improvements to animal housing and environments
- Water, waste, and manure management improvements
- Investments to improve farm business structure
Grant FAQ’s
Who is eligible for this grant?Applicants must meet all of the following criteria:
- Operates a dairy farm and/or dairy plant in Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia, or Puerto Rico.
- Has a project that meets one of the following goals and fits within either the Beginning Processor, Specialty Equipment Investment, Precision Technology and Management, or Farm Infrastructure Improvement Grant calls:
- Diversifies dairy product markets to reduce risk and develop higher value uses for dairy products
- Promotes business development that diversifies farmer income through processing and marketing innovation
- Encourages the use of regional milk production
- Increases efficiency and profitability of dairy farms in the Southeast
- Has no immediate family members, i.e. parents, siblings, spouse, or children, working with the Southeast Dairy Business Innovation Initiative, or serving on the subaward review committee.
Dairy businesses may apply for funding to modernize, specialize and/or to transition to grazing on their farms. On the processing side, this can include funding to improve or add value chain and commodity innovation, facility and process updates for dairy processors, and/or improve or add dairy product development, packaging and marketing. On the farm side, this can include funding to improve animal or farm efficiency, reduce labor costs or improve employee well-being, encourage use of best-management practices, and reduce carbon-footprint and GHG emissions. Some examples of how funds may be used include hiring an independent consultant to develop planning documents for the dairy business such as a feasibility study, business plan or marketing plan that will be useful in determining the likelihood of success or to develop a food safety plan. Funds may also be used to attend training to acquire skills needed to develop or market dairy products (for example, Western Kentucky University’s cheese-making short course or Ohio State’s Dairy 101: Introduction to Dairy Processing and Management short course). Funds for training may include registration fees, transportation (the lower of business class airfare or mileage at the IRS standard mileage rate) and lodging (at current rates in the continental United States “CONUS Rates”). On the processing side (Specialty Equipment Investment Grant), funds may be used to purchase specialty equipment such as pasteurizers, cheese presses, and labelers. Funds may also be used to get product development help and services in recipe development, sensory evaluation, packaging considerations or shelf-life studies from sources such as the University of Kentucky’s Food Systems Innovation Center. For the farm side (Farm Infrastructure and Improvement Grant and Precision Technology and Management Grants), funds may be used to purchase wearable technologies, robotic milkers or feeders, heat abatement equipment, resting area improvements (new stall loops, new stall bases), harvest or feed implements, etc. For a full list of allowable and unallowable expenses download this publication from USDA.
What would count as a new process for my operation?New processes might include adding alternative sizes of products, or adding additional product types to the line of products you currently sell. Adding a separator to your facility, or HTST instead of vat pasteurization would also count.
What projects are eligible?Eligible projects involve:
- Beginning Processor and/or Specialty Equipment Investment Grant
- Diversify dairy product markets to reduce risk and develop higher uses for dairy products
- Promote business development that diversifies farmer income through processing and marketing innovation
- Encourage the use of regional milk production
- Value-chain and commodity innovation and facility and process updates for dairy process
- Product development, packaging, and marketing of dairy products
- Improve animal health, well-being, and/or performance
- Enhance labor efficiency
- Reduce energy costs or environmental impact (i.e. carbon-footprint or GHG emissions)
- Increase utilization of the farm’s land base
- Improvements to existing facilities to reduce the impact of heat stress and seasonal milk production swings
- Investments in raw milk storage, cooling capacity, and/or transportation efficiency
- Modernization and improvements to milk harvest
- Improvements to feed and forage management and storage opportunities
- Improvements to animal housing and environments
- Water, waste, and manure management improvements
- Investments to improve farm business structure
Projects that are ineligible include:
- Real estate purchases
- Repayment of loans or mortgages
- Rent or contract payments for time periods extending beyond the 12-month period allowed for eligible projects
- Labor costs/wages
- Legal fees, or
- Lobbying, fundraising, or other political activities
The project outlined in the application must be completed within 12 months of approval. Recipients of subawards agree to provide a progress report 6 months into the grant period, a completion report within two months of the project’s end date, and a final report 12 months after the end date. The reports should include information about outcomes of feasibility studies, market analyses, business plans, increases in sales and markets reached, new products or processes developed and jobs obtained or created as a result of the project. Those applicants with a current dairy processing or marketing business will be asked to provide a baseline of sales in dollars and an initial customer count at the beginning of the project.
Will I be required to match a certain amount of the funds given to me?Yes. Precision Technology and Management Grants and Farm Infrastructure Improvement Grants require a 25% match based on eligible grant items (i.e. construction costs cannot be used as matching funds).
How will funds be given?Recipients will be reimbursed in full following a receipt of a paid invoice and approval by the SDBII Accounting Specialist.
Can I apply for something I have already purchased?No, you will only be reimbursed for purchases and monies spent after your application’s approval. However, down-payments on allowable expenses can be used as matching funds.
When are my progress reports due?The first progress report is a written report due 6 months after the project start date. A second report is required upon completion of the 12 month grant period. The final report is due by August 31, 2024.
What information should be included in my progress report?Description of the project intent, summary of the project accomplishments and outcomes, including: dollar amount of increase in sales, increase in markets reached, new products or processes developed, jobs retained or created. In addition, there should be other insights from project execution, including, wherever possible, industry-wide benefits. Side note: The University of Tennessee Extension reserves the right to modify reporting requirements during the course of the project.
What if I want to sell equipment purchased with grant funds?Equipment purchased as part of an SDBII Grant with a per unit fair-market value of $5,000 or more will be subject to an in-person audit on a yearly basis for the duration of the equipment’s useful life. Applicants wishing to dispose of equipment that is subject to audit must first contact SDBII personnel in order to properly adhere to USDA policy with regard to disposition of equipment purchased with grant funding.
