Kosher meat shortage feared

NEW YORK — With the kosher meat producer Agriprocessors facing mounting financial problems and a fire-related shutdown at another major kosher producer, industry insiders say major supply disruptions in the United States are inevitable and that kosher consumers should brace themselves for rough times.

In the past two weeks, Agriprocessors, the nation’s largest kosher meat supplier, has endured a cascade of awful news. First, Iowa’s labour commissioner hit the company with nearly $10 million (US) in fines for alleged wage violations at its massive Postville, Iowa, plant. Then, the son of the company’s founder was arrested on charges that he helped purchase fake identification for the company’s illegal workers. And on Oct. 31, news broke that a St. Louis bank had initiated foreclosure proceedings after Agriprocessors and its owners defaulted on a $35 million loan.

Last week, the firm filed for bankruptcy protection in a move that appeared to be an effort to pre-empt foreclosure by the bank, which had sued Agriprocessors for defaulting on the loan.

Kosher industry insiders are predicting that the company won’t pull through. Company officials didn’t respond to multiple requests for comment.

Meanwhile, production at the United States’ third-largest slaughterhouse, North Star Beef in Minnesota, ground to a halt after a fire, the Forward reported last week. Also according to the newspaper, a smaller Agriprocessors plant in Gordon, Neb., stopped operating in October.

Short-term disruptions in the supply of kosher meat, particularly kosher and glatt kosher beef, are now virtually guaranteed. Rabbi Menachem Genack, 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,” said Genack, adding that Agriprocessors is trying to survive, but that the situation is grim.

Agriprocessors representatives had virtually nothing to say publicly last week as they faced a succession of ominous developments. But 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.

Agriprocessors has been reeling since May 12, when federal authorities conducted what at the time was the largest immigration raid in U.S. history in Postville, arresting nearly half the company’s workforce. The company’s troubles have only intensified in the last few weeks, and several industry observers said they believe the company can’t possibly recover.

In addition to the foreclosure by First Bank of St. Louis and the arrest of Sholom Rubashkin, the staffing company responsible for approximately half of the labour at the Postville plant suspended its contract. Beef production had been shut down for several days. And reports out of Postville suggested the company lacks the resources to slaughter and process the chickens in its possession, although 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 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. “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.