Latest Agriprocessors news stokes fears of kosher meat shortage

With kosher meat producer Agri-processors facing mounting legal financial problems, and a fire-related shutdown at another major kosher producer, industry insiders say major supply disruptions are inevitable and that kosher consumers should brace themselves for some rough times.

Agriprocessors has endured a cascade of awful news recently. First Iowa’s labor commissioner hit the company with nearly $10 million in fines for alleged wage violations. Then, on Oct. 30, the son of the company’s founder was arrested on charges that he helped purchase fake identification for the company’s illegal workers. The following day, news broke that a St. Louis bank had initiated foreclosure proceedings after Agriprocessors and its owners defaulted on a $35 million loan.

Kosher industry insiders are predicting that the company will not pull through. Company officials did not respond to multiple requests for comment.

Meanwhile, production at the nation’s third-largest kosher slaughterhouse, North Star Beef in Minnesota, has been halted after a fire, the Jewish Daily Forward reported Nov. 3. Also, according to the newspaper, an Agriprocessors plant in Gordon, Neb., which is smaller than the main facility in Postville, Iowa, stopped operating in October.

Short-term disruptions in the supply of kosher and glatt kosher meat, particularly beef, are now all but certain.

Rabbi Menachem Genack, the head of kosher supervision for the Orthodox Union, said he already has heard from communities that have no supply.

“There is going to be a sharp decline in availability immediately,” Genack said, adding that the company is trying to survive, but that the situation is grim.

Agriprocessors representatives have had virtually nothing to say publicly over the past two weeks, as they faced a succession of ominous developments.

Bernard Feldman, the New York tax attorney hired in September as the company’s new chief executive officer, offered one stark prediction to the Des Moines Register.

“I don’t believe we’re going to have substantial production of any kind in the near future,” Feldman said in the Nov. 3 edition.

Agriprocessors has been reeling since May 12, when federal authorities conducted at the Postville plant what at the time was the largest immigration raid in U.S. history, arresting nearly half the company’s workforce.

The company’s troubles have only intensified since the raid, and several industry observers say they believe the company cannot possibly recover.

In addition to the foreclosure by First Bank of St. Louis and the arrest of Sholom Rubashkin, son of Agriprocessors founder Aaron Rubashkin, the staffing company responsible for approximately half of the labor at the Postville plant suspended its contract.

Beef production has been shut down, and reports out of Postville suggest that the company lacks the resources to slaughter and process the chickens in its possession, though some chicken slaughtering reportedly is taking place.

A federal judge placed the company in temporary receivership after First Bank filed a lawsuit alleging that Agriprocessors and its owners defaulted on a $35 million loan.

The lawsuit demands the return of the bank’s collateral — a category that includes “virtually all” of the owners’ personal property as well as the company’s accounts receivable, inventory and proceeds.

Agriprocessors also has received a power disconnect notice, the Des Moines Register reported. The company’s electric utility, Alliant Energy, reportedly is working with the company to work out a payment plan.

Meanwhile, a relative of the company’s owners has issued a call for the Jewish community to donate funds to help save the company.

Kosher industry insiders, including Agriprocessors’ competitors, uniformly believe that the company’s collapse would be a disaster for the country’s kosher meat supply.

Agriprocessors has been a pioneer in the industrial-scale production of kosher beef, and in many smaller Jewish communities its products are the only kosher ones available.

“For the kosher marketplace, there’s no question there’s going to be short-term shortages of kosher and glatt kosher meat and poultry,” said Elie Rosenfeld, a spokesman for Empire Kosher, a poultry producer in Pennsylvania.

“The industry overnight cannot pick up the decreased level of volume that Agriprocessors has been doing over the last couple of months.”

Rosenfeld said his client continues to see growing demand for its product, but he would not comment on reports that Empire has been exploring opportunities to begin producing kosher beef.

Ben Harris

Ben Harris is a JTA correspondent.