Halt issued: JBS and DOJ agree to temporary standstill
Lamb producers across the West can breathe easier with the news JBS and the Department of Justice (DOJ) have agreed to a 30-day standstill prohibiting JBS from making changes to the newly acquired Mountain States Rosen (MSR) lamb processing facility.
While the sale of the facility is final, time is in favor for the DOJ to complete an investigation and for the lamb industry to start making arrangements for fat lambs ready for processing.
The bankruptcy acquisition closed on Friday, July 31 leaving the U.S. sheep industry wondering what kind of devastation would come following the loss of the MSR processing facility.
The plant, located in Greeley, Colo., processed between 15 and 20 percent of the U.S. lamb market. Brazilian-owned JBS announced its plans to utilize the facility to grind hamburger and cut steaks, eliminating a fifth of the U.S. lamb processing capacity.
Mountain States Lamb Cooperative (MSLC) President Brad Boner, says the DOJ involvement is muddy. It is not well understood whether the DOJ ordered the standstill or if a conversation between the DOJ and JBS resulted in the agreement.
“We cannot have any direct contact with the DOJ since they have started looking into the issue,” says Brad. “However, we have heard through third-party sources there will be a 30-day standstill at the plant to restrict JBS from making changes.”
“We are doing everything we can do to keep it a lamb plant at the end of the day,” Brad continues.
JBS reportedly volunteered the 30-day standstill, welcoming review by the DOJ.
Concerns with JBS acquiring the MSR facility revolve around losing lamb processing capacity in the western U.S. and keeping American-produced lamb in the market. Many producers believe JBS will utilize the disruption of lamb processing due to the loss of MSR to fill the market with imported lamb.
The standstill agreement comes after a number of lawmakers urged the DOJ to open an investigation into the purchase.
Several senators signed a letter urging the DOJ to look into the matter, including Sens. Mike Lee (R-UT), John Barrasso (R-WY), Steve Daines (R-MT), Mitt Romney (R-UT), Michael Rounds (R-SD) and John Thune (R-SD). Members of the House who endorsed the letter were Reps. Chris Stewart (R-UT), Greg Gianforte (R-MT), Rob Bishop (R-UT), Devin Nunes (R-CA), Dusty Johnson (R-SD) and Liz Cheney (R-WY).
“Through this acquisition, JBS will eliminate a major domestic competitor in the region and could replace significant quantities of the American-raised lamb with imported products,” the letter reads. “We are told many of these family-operated sheep ranches in the western states may go out of business after this deal, costing the lamb industry potentially hundreds of millions of dollars per year.”
“At a time when JBS and other major multinational packing companies are under Congressional review and public scrutiny for their predatory business practices and market manipulation, it is appalling JBS finds itself in a position to severely undermine the American sheep industry with the forced acquisition of this plant,” says Wyoming Sen. Brian Boner in another letter to the DOJ regarding the issue.
“Should this acquisition go through, JBS will cause serious, irreversible damage to American producers by importing cheap lamb and mutton from its processing locations in Australia, New Zealand and other parts of the globe,” Brian continues.
Lamb producers’ future hazy
Production at MSR ended July 31. Without the facility to process lambs, there is said to be approximately 350,000 fat lambs misplaced by processing disruptions.
“There is no solution at the moment for lamb producers,” says Brad. “It’s not for a lack of people trying to figure it out, though.”
Smaller processing facilities may be able to make a dent in the oversupply of lamb, but will not be able to handle all of the animals ready for processing.
Colorado Lamb Processors, a new lamb processing facility in Brush, Colo., is set to open soon. The family-owned facility will work to harvest lambs, but will have to ship carcasses for fabrication and packing.
Averi Hales is the editor for the Wyoming Livestock Roundup. Send comments on this article to firstname.lastname@example.org.