JBS acquires assets
Lamb producers call for stay
Mountain States Rosen, the second largest lamb processing facility in the U.S., was recently acquired by JBS USA, whose Greeley, Colo. beef processing plant sits just across North Sixth Avenue from the Mountain States plant.
The processing facility is reported to hold a fifth of the U.S. lamb market and slaughter capacity. Mountain States Rosen was purchased in 2015 from JBS when JBS announced the intent to discontinue processing lamb.
JBS successfully bid on the lamb processing facility during a bankruptcy auction and was awarded the sale on July 16. The company has announced plans to utilize the newly acquired processing plant to grind hamburger and cut steaks, eliminating 20 percent of the nation’s sheep processing capacity. The closure of the sale is set for July 31.
Producers call for action
Lamb producers believe JBS may be violating anti-trust laws with the purchase of the facility and decision to end lamb processing at the plant. Not only is JBS currently under investigation for price-fixing and market manipulation, the company is also one of the largest foreign lamb importers.
“Our industry and others need time to assess the damage, understand the short- and long-term impacts and determine a path forward,” says Carson Jorgenson, a Utah sheep rancher, in a letter to Vice President Mike Pence. “The abrupt closure of this plant, before the ranchers can make arrangements to replace it, will force sheep ranchers across several western states into financial ruin and extinction.”
Brad Boner, president of the Mountain States Lamb Cooperative (MSLC), says a letter to the Department of Justice has been signed by six senators and six representatives asking JBS to be required to leave the facility as is, at least until a new lamb processing facility can begin production.
“It is a last-ditch effort, but sheep producers desperately need processing facilities for American produced lamb,” says Boner.
MSLC owns 87 percent of Mountain States Rosen and is made up by over 140 sheep ranching families in 11 western states. Each of those co-op shareholders were required to deliver at least one lamb per year for each share owned, a loss that is now unrecoverable but does not compare to the loss of the slaughter and processing facility.
Lamb market mistrust
Before the bankruptcy, Mountain States Rosen tried to sell the facility to another company that would maintain lamb processing. However, JBS blocked the sale by refusing to continue the contract that provides the plant wastewater and steam services with the new owner, forcing the bankruptcy.
In the July 16 bankruptcy court, another competitive bid for the processing facility came from Greeley Fab, a newly established company committed to maintain lamb processing, but the bid fell short to JBS.
“The negotiating parties and the judge did not consider the impact of market loss and the impact to the sheep industry,” Boner comments.
Another issue sheep producers are worried about is JBS securing an increased market share by filling the loss of American lamb in the market with imported lamb. JBS is known as one of the largest, if not the largest, importer of Australian lamb.
Processing facility woes
“There are tens of thousands of lambs in feedlots, finished and ready for slaughter,” says Jorgensen. “In a few short months, hundreds of lambs will be coming off the summer ranges.”
“The oversupply of lamb has huge ramifications for the feeder lamb market,” explains Boner. Approximately 350,000 lambs may be misplaced with processing disruptions due to the loss of Mountain States Rosen.
“Lamb feeders with lambs ready to slaughter could struggle to find an outlet for them,” says Jorgenson. Small plants will be able to pick up some of the fat lamb supply, but not all of it, according to Boner.
While a new lamb slaughter facility in Brush, Colo. is expected to open in August, the plant will not have the capabilities for fabrication or packing, only to ship whole carcasses.
Averi Hales is the editor for the Wyoming Livestock Roundup. Send comments on this article to email@example.com.