Kosher Meat Shortage?

Great

Agriprocessors' troubles, fire spell more shopper concern.

Photo by Ben Ha rris

Ben Harris

Jewish Telegraphic Agency

New York

W

ith the kosher meat pro-
ducer Agriprocessors fac-
ing mounting financial
problems, and a fire-related shutdown
at another major kosher producer,
industry insiders say major supply
disruptions are inevitable and kosher
consumers should brace themselves for
some rough times.
Agriprocessors in the past week or so
has endured a cascade of awful news.
First, Iowa's labor commissioner hit
the company with nearly $10 million
in fines for alleged wage violations.
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.
Kosher industry insiders are pre-
dicting that the company will not pull
through. Company officials did not
respond to multiple requests for com-
ment. But on Nov. 5, the company filed
for Chapter XI bankruptcy protection.

North Star Fire
Meanwhile, production at the nation's
third-largest slaughterhouse, North
Star Beef in Minnesota, has ground to
a halt after a fire, the Forward reported
last week. Also according to the news-
paper, a smaller Agriprocessors plant
in Gordon, Neb., stopped operating in
October.
Short-term disruptions in the sup-
ply of kosher meat, particularly kosher
and glatt kosher beef, are now virtually
guaranteed. Rabbi Menachem Genack,
the head of kosher supervision for the
Orthodox Union, has heard from com-
munities that have no supply.
"There is going to be a sharp decline
in availability immediately:' said
Genack, adding that the company is try-
ing to survive but the situation is grim.
Agriprocessors representatives have
had virtually nothing to say publicly
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

Flavors!

Agriprocessors and local energy officials are working on a plan to maintain the
electricity at the firm's plant in Postville, Iowa.

executive officer, offered one stark pre-
diction 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 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
week and several industry observers
said they believe the company cannot
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 labor at the Postville plant
suspended its contract. Beef production
was shut down for several days. And
reports out of Postville suggest that the
company lacks the resources to slaugh-
ter and process the chickens in its pos-
session, though some chicken slaughter-
ing reportedly is taking place.

Receivership
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 col-
lateral — a category that includes "vir-

tually all" of the owners' personal prop-
erty 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 elec-
tric utility, Alliant Energy, reportedly is
working with the company on a pay-
ment 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 produc-
tion 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 major 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 opportuni-
ties to begin producing kosher beef. ❑

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