"Since Congress has not yet acted to ban horse slaughter inspection, [the USDA's inspection office] is legally required to issue a grant of inspection today to Responsible Transportation in Sigourney, Iowa, for equine slaughter," a department spokesperson said in a statement.
From 2006 through 2011, language in the annual appropriations bill had prohibited money to be used on inspections for horse slaughter facilities, effectively outlawing the practice.
No such prohibition was passed last year, however, forcing the USDA to approve applications that had met federal requirements, as the Iowa and New Mexico facilities have done.
Legislators and animal rights groups criticized last week's decision and hoped for a permanent ban on horse slaughterhouses to be passed quickly.
Current appropriations bills in both the House and Senate renew the prohibition on using federal funds to inspect horse slaughterhouses, and additional legislation has also been introduced in both chambers to permanently ban horse slaughter.
Earlier this year, alarm bells went off in Europe when consumers found horse meat labeled and sold as other products.
Federal officials in the U.S. maintain that regulations are stringent enough to prevent that type of scandal, however. Horses are prevented from being slaughtered at the same facility as other species, and horse meat is not allowed to be processed alongside other animals.
The USDA is still weighing the application from a third plant that wants to slaughter horses, in Missouri, and could approve it in the coming days.