SDBII Grant Information | Value-Added Dairy

The Southeast Dairy Business Innovation Initiative (SDBII), with support from USDA AMS, offers grants to dairy businesses in Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia, and Puerto Rico. The program provides grant awards to revitalize and spur innovation in the dairy industry across the Southeast. This includes grants to support precision technology investment, farm infrastructure improvement, specialty processing equipment investment, exploration of alternative revenue, transition planning, and business management.

Below are some general FAQs to aid with grant writing and questions of what may or may not be funded.

Winter/Spring SDBII Grant Cycle – Open

Farm Infrastructure Improvement Grants

Precision Technology and Management Grants

Summer/Fall SDBII Grant Cycle – Currently Closed

Dairy Business Planning Grant (for farms and processors)

Specialty Equipment Investment Grant

Program Contacts & Resources

Tennessee, Alabama, Florida, & Louisiana
Shep Stearns & Liz Eckelkamp: sdbiigrants@utk.edu

Kentucky, Arkansas, Virginia, & West Virginia
Jennifer Hickerson: j.hickersonkddc@gmail.com

North Carolina, South Carolina, Georgia, & Mississippi
Brittany Whitmire & Stephanie Ward: ncdairyextension@ncsu.edu

Grant Writing Tutorial

View a grant writing tutorial from our sister program at University of Wisconsin’s Center for Dairy Research here

Grant Information

One of the following conditions MUST be met to be eligible to apply for funding through the Southeast Dairy Business Innovation Initiatives program:

Diversify dairy product markets to reduce risk and develop higher value uses for dairy products;
Promote business development that diversifies farmer income through processing and marketing innovation; and
Encourage the use of regional milk production.

This subaward program (direct-to-business grants) is intended for existing or prospective dairy businesses. Dairy Businesses are those that that develop, produce, market, or distribute dairy products.

Subawards will only be made to prospective or current dairy businesses. Successful applications must focus on one or more of the following areas.

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
Precision Technology and Management Grants
- 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
Farm Infrastructure Improvement Grants
- 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

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.

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.

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
Precision Technology and Management Grants
- 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
Farm Infrastructure Improvement Grants
- 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.

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).

Recipients will be reimbursed in full following a receipt of a paid invoice and approval by the SDBII Accounting Specialist.

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.

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.

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.

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.

SDBII Grant News