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SDBII Grant Information


As part of a USDA AMS grant focused on Value-Added Dairy Businesses in Tennessee, Kentucky, and North Carolina, we provide subawards to current and prospective value-added dairy businesses across the three states. The most recent grant application period closed October 1, 2021. More opportunities for grant funding through the SDBII program will be announced in the near future. The information below provides details on who is eligible to apply for funding through the SDBII and what projects can receive funding.

In the most recent round of subaward funding, applicants in the three states had the opportunity to submit project proposals for up to $500,000. The program supports projects of many sizes, see below for information on some of the projects that have been funded so far by the SDBII. If you have any questions, please contact one of the state coordinators listed below.

Grant Information


The following conditions MUST be met to be eligible to apply for funding through the Southeast Dairy Business Innovation Initiatives program. Initiatives must meet the following three goals:

  • 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.

  • Modernization, specialization, and grazing transition on dairy farms
  • Value chain and commodity innovation and facility and process updates for dairy processors
  • Dairy product development, packaging, and marketing

Grant FAQ’s


Applicants must meet all of the following criteria:

  1. Operates or endeavors to operate a dairy farm or dairy plant in Tennessee, Kentucky, or North Carolina
  2. Has a project that meets the following goals:
    • 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
  3. 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. This can include funding to improve or add value chain and commodity innovation and/or facility and process updates for dairy processors and to improve or add dairy product development, packaging and marketing. 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”). 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 a full list of allowable and unallowable expenses, see the above list under grant application or 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 or in-line pasteurizer to your facility, or HTST or UHT instead of vat pasteurization would also count.

Eligible projects involve:

  • Modernization, specialization, and grazing transitions on dairy farms
  • Value chain and commodity innovation and facility and process updates for dairy processors, or
  • Dairy product development, packaging, and marketing.

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
  • legal fees, or
  • lobbying, fundraising, or other political activities

The Southeast Dairy Business Innovation Initiatives Subaward Application may be found on this page, or it may be requested directly from Shep Stearns at sstearn@utk.edu or at (865) 974-0991.

The project outlined in the application must be completed within 12 months of approval. Recipients of subawards agree to provide a progress report 12 months after the project is completed, and a final report by August 31, 2023. 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.

No, you will not be required to do so.

Recipients will be reimbursed in full following a receipt of a paid invoice and approval by their State Department of Agriculture (if applicable).

No, you will only be reimbursed for approved items bought after your application’s approval.

The first progress report is a written report due 12 months after the project is completed. The final report is due by August 31, 2023.

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.

Southeast DBII Grant


The SDBII subaward application period is currently CLOSED. See below for grant application documents from previous funding rounds. Check back for information on future funding opportunities.

State Program Contacts


Tennessee
Shep Stearns (865) 974-0991
Liz Eckelkamp (865) 974-8167

Kentucky
Jennifer Hickerson (859) 516-2458

North Carolina
Brittany Whitmire (828) 577-8598
Stephanie Ward (919) 515-4015