SDBII Specialty Processing Equipment Grant
Southeast Dairy Business Innovation Initiative (SDBII) — University of Tennessee Institute of Agriculture
Up to $150,000 (25% cash match required)
Up to $150,000 reimbursement (25% match required) for specialty dairy processing equipment in the Southeast and Puerto Rico.
The Specialty Processing Equipment Grant reimburses permitted dairy processors in the Southeast and Puerto Rico for equipment and related costs that expand processing capacity, improve efficiency, or support new dairy products. Maximum award is $150,000 with a minimum 25% cash match. Eligible projects include purchasing vat pasteurizers, cream separators, cheese drain tables, and other specialty processing equipment.
- Funding type
- Grant
- Level
- Federal
- Amount range
- $0 – $150,000
- Realistic amount
- $50,000-$150,000 for dairy processors with matching funds and a clear processing-expansion project
- Deadline
- September 23, 2026 at 5:00 p.m. ET
- Status
- active
- States
- AL, AR, FL, GA, KY, LA, MS, NC, SC, TN, VA, WV, PR
Who qualifies
- Operate an existing, permitted dairy processing business in an eligible Southeast state or Puerto Rico, or have a documented feasibility study outlining credible plans to establish one
- Project must focus primarily on specialty processing equipment that supports new processes or increases efficiency in producing finished dairy products
- Must provide a cash match of at least 25% of the SDBII grant amount requested
- Must process milk from cattle, sheep, goats, water buffalo, camels, or other approved dairy species
- Applicants with open Farm Infrastructure Improvement, Precision Technology and Management, or previous Specialty Processing Equipment grants are not eligible
- No immediate family members of the applicant may work as affiliated SDBII staff or faculty
Who is not eligible
- Dairy farms seeking only on-farm production equipment (milking equipment, parlor upgrades, feed, herd health)
- Applicants with open Farm Infrastructure Improvement, Precision Technology and Management, or previous Specialty Processing Equipment grants
- Entities engaged solely in raw milk or raw dairy product sales (except cheeses aged >60 days)
- Applicants lacking a 25% cash match
What it covers
Eligible expenses
- Specialty processing equipment (vat pasteurizers, cream separators, cheese drain tables, etc.)
- Equipment installation and supplies
- Related consultant services such as marketing support
- Raw milk storage only when part of a broader processing expansion
Ineligible expenses
- On-farm production equipment and farm-level expenses
- Construction, building additions, land acquisition
- General-purpose office equipment
- Labor performed by applicant or relatives
- Costs incurred before contract execution
How to apply
-
1
Confirm processor eligibility and equipment fit
Review the RFP to ensure the project is processing-focused and the business is (or will be) a permitted dairy processor in an eligible state.
~2 hrs
-
2
Secure 25% cash match and SAM.gov UEI
Document at least 25% matching funds from allowable grant expenses and obtain an active SAM.gov UEI before contract execution.
~3 hrs
-
3
Gather quotes and business plan
Collect vendor quotes for all equipment and installation costs. Applicants not yet operating a processing facility must include a robust feasibility study and updated business plan.
~8 hrs
-
4
Submit via online portal by deadline
Complete the application and budget workbook in the Foundant portal and submit by 5:00 p.m. ET on September 23, 2026.
~3 hrs
-
5
Execute contract and install equipment
If awarded, sign the UT grant agreement before purchasing equipment. Submit invoices, proof of payment, and photos for reimbursement.
~2 hrs
Raw milk storage is only eligible when it is part of a larger processing expansion or new-product project—do not request a stand-alone raw-milk tank.
Deadline & timing
Application window opened July 22, 2026. Same review timeline as the Dairy Business Planning Grant; awards announced before end of November and contracts estimated mid-January 2027.
Required documents
- Completed grant application and budget workbook
- SAM.gov Unique Entity Identifier (UEI)
- Updated business plan (within last three years)
- Feasibility study (if not yet operating a permitted processing facility)
- At least two letters of support from collaborators
- Vendor quotes for equipment and installation
- Documentation of 25% cash match funding source
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Researched and verified 2026-08-24 against the official program source. GrantCompass is an independent funding-discovery tool and is not affiliated with any government agency. Always confirm details on the official program page.