Troubles at meat plants prompt increased fear of kosher beef shortages


NEW YORK (JTA) — 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 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 false 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 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 slaughterhouse, North Star Beef in Minnesota, has ground to a halt after a fire, the Forward reported Monday. 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, 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,” said Genack, adding that the company is trying to survive but that the situation is grim.

Some kosher markets have not felt the crunch, among them Daryl Schwarz, owner of Kosher Club on Pico Boulevard in Los Angeles, a full-service kosher supermarket under RCC supervision. “I’m not having any problems yet,” Schwarz said. “It’s a little early to see what happens. I have plenty of product.”

Farzad Kohanzadeh, co-owner of Livonia Glatt Mart, has so far experienced a steady flow of meat, in part because he deals with a variety of suppliers who meet the approval of their kashrut supervising body, the Rabbinical Council of California (RCC). “Eventually it will affect us, but right now it has not.”

Those who have stricter kosher supervision have been more hard hit. Albert Zadeh, one of three owners at Pico Glatt Mart on Pico Boulevard in Los Angeles, has experienced some shortages, particularly with special cuts of beef. “We’ve been in business for 17 years, but it has never been like this. The cases were always full of meat.

“Because we are under Kehilla [kashrut] supervision, we can’t get a different brand of meat,” he said, adding that Agriprocessors has raised the prices three to four times in the last five months. Last week, to keep up, Pico Glatt raised the price of every meat and chicken item by 29 cents per pound.

Avraham Shamoil, owner of Little Jerusalem on Pico Boulevard and La Peer Drive for 30 years, has also experienced a shortage. His meat falls under Crown Heights kashrut supervision, which he says is even stricter than Kehilla. Quantities don’t reach Los Angeles as they used to.

“Basically we cannot get enough meat, chicken, turkey,” Shamoil told The Journal. “It’s been very difficult for us. We’ve been dealing with [Rubashkin] for years, and now we cannot get.”

Agriprocessors representatives have had virtually nothing to say publicly over the past 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 in Monday’s 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.

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 has been shut down for several days. 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. “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.

Harris reported from New York for Jewish Telegraphic Agency. Jewish Journal contributor Orit Arfa contributed to this article.

Rubashkin son arrested, Agriprocessors fined $10 million in kosher slaughterhouse probe


POSTVILLE, IOWA (JTA) — The former manager of Agriprocessors was arrested today on charges related to the hiring of illegal workers.

Sholom Rubashkin, 49, was arrested by immigration officials and was due to appear in federal court later today.

Documents filed with the court allege that Rubashkin conspired to harbor illegal immigrants at the Agriprocessors meatpacking plant in Postville, Iowa. They further charge that he aided and abetted in the use of fake identification documents and identity theft.

Rubashkin is the highest-ranking Agriprocessors official to face criminal charges stemming from the May 12 federal immigration raid at the company’s Postville meatpacking plant. More than one-third of the company’s workforce was arrested.

According to the criminal complaint filed Thursday, Rubashkin provided funds that were used to purchase new identification for workers at Agriprocessors who were found to have bad papers. The complaint further alleges that Rubashkin asked a human resources officer to come in on a Sunday to process the new employment applications of several such workers.

Company representatives did not immediately respond to requests for comment. But Nathan Lewin, an attorney who represents Rubashkin’s father and the company owner Aaron Rubashkin, dismissed the arrest as unnecessary and motivated by federal law enforcement’s desire for good publicity.

“The arrest of Mr. Sholom Rubashkin today was a wholly unnecessary and gratuitous act by federal prosecutors apparently engaged in an unseemly competition with State of Iowa officials to capture headlines in a vendetta against Agriprocessors,” Lewin said.

Rubashkin’s arrest comes a day after Iowa Workforce Development announced it would levy nearly $10 million in fines against the company for alleged labor infractions.

In response to the action by the state labor agency, Agriprocessors CEO Bernard Feldman told The New York Times that he had “grave doubts as to the appropriateness of the claimed violations, and we also take issue with the intended sanction imposed per claim.”

Iowa Workforce Development, the state’s labor regulation agency, levied $9,988,200 in civil penalties against the kosher meat producer in Postville for four categories of infraction. The largest is for charging employees for frocks — the regulation agency claims the company is guilty of more than 90,000 such incidents, assessed at $100 per infraction.

“Once again, Agriprocessors has demonstrated a complete disregard for Iowa law,” said Dave Neil, the state’s labor commissioner. “This continued course of violations is a black mark on Iowa’s business community.”

According to Iowa Workforce Development, the company has 30 days to contest the penalties in writing before they become finalized. The department has an additional wage investigation under way that could lead to further penalties.
The fines are the latest challenge to Agriprocessors, once the nation’s largest producer of kosher meat before a massive federal immigration raid on May 12 resulted in the arrest of more than one-third of its workforce.

With its reputation taking a drubbing and concerns mounting that the company could lose its kosher certification, Agriprocessors hired a compliance officer and installed a new chief executive.

Company representatives did not immediately respond to JTA’s request for comment.

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