The U.S. Department of Agriculture (USDA) is launching a new $500 million program aimed at helping small- and mid-size beef processors continue operating during a period of historically tight cattle supplies and record-high cattle prices.

U.S. Secretary of Agriculture Brooke Rollins announced the Strengthening Processing for U.S. Ranchers (SPUR) Program on June 30. The temporary initiative will provide financial assistance to eligible beef processing facilities to help offset rising cattle procurement costs and maintain processing capacity.

The funding, which will be distributed through USDA’s Commodity Credit Corporation, is available only to independent processors.

“Through the Strengthening Processing for U.S. Ranchers (SPUR) Program, USDA is taking targeted action to preserve the independent processing capacity that ranchers rely on, strengthen competition across the American beef supply chain, and support rural communities across the country,” U.S. Secretary of Agriculture Brooke Rollins said.

The announcement comes as the U.S. cattle inventory remains at its lowest level in decades.

Strong consumer demand, combined with limited cattle numbers, has driven cattle prices to record levels while increasing costs for processors that purchase fed cattle for slaughter. Smaller processors often have fewer options to absorb those higher costs than larger companies.

USDA said eligible processors can receive payments for maintaining or increasing processing volumes despite elevated cattle costs. Additional details, including payment calculations and application materials, will be provided directly to eligible establishments through USDA’s Food Safety and Inspection Service.

According to USDA, the program is intended to preserve independent processing capacity that many cattle producers rely on to market livestock. Maintaining those facilities also helps sustain competition in the cattle marketplace and provides additional marketing opportunities for ranchers.

The SPUR Program builds on USDA’s broader efforts to strengthen the U.S. beef industry. Earlier this month, USDA announced its Small Processors Action Plan that includes regulatory changes, customer service improvements and additional investments to support small meat and poultry processing facilities.

“This is another important step in our Plan to Fortify the American Beef Industry by strengthening domestically owned processing capacity and ensuring America’s cattle producers continue to have strong market opportunities and meet America’s historically high beef demand,” Rollins said. “As we Make America Healthy Again, we are working to ensure American families have continued access to nutritious, high-quality American beef while promoting greater competition, a more resilient food supply chain and long-term affordability at the grocery store.”

USDA has not yet announced when SPUR payments will begin, but agency officials said more information will be released as the program is implemented.

The initiative will make available up to $500 million in payments to eligible entities to support stronger and more stable market opportunities for American ranchers.

The SPUR Program targets independent and regional plants under federal inspection, as well as beef processing facilities inspected under the Talmadge-Aiken Cooperative Inspection Program and the Cooperative Interstate Shipment Program (CIS).

Payments are intended to provide financial support to eligible beef processors who have faced increased costs of acquiring cattle for processing due to the abnormally low number of cattle being raised in the U.S at this time and other conditions currently impacting the cattle market.