by Anne Delaney
Source: The Greeley Tribune
When the Mountain States Rosen lamb plant in Greeley announced its closure last month, the transaction was projected to have a major effect on the lamb industry nationwide.
The implications of the plant shutdown are already being felt in Weld County where as many as 300,000 lambs per year are kept on feedlots. Feedlots are where the lambs are fattened up before moving to slaughter at Mountain States Rosen, which was the largest harvesting and fabrication facility in the U.S.
The Mountain States cooperative of 145 members in 15 states including Colorado filed for bankruptcy in June.
In Weld County, there are four major feedlots each hosting at least 30,000 lambs annually. One of those lots is Double J Feeders belonging to Ault-area resident Jeff Hasbrouck. At this time of year, in summer when lambs are growing, Hasbrouck’s pens might be near or at that 30,000 mark with 75% capacity. This year, Hasbrouck has about 8,000 lambs and multiple empty pens.
“My customers are asking where are they going to go,” said Hasbrouck, a cooperative member whose feedlot would see 150,000 to 175,000 lambs per year. “Everyone is in a panic mode. Our options are not good. Those guys have no idea where to harvest at the moment. Everyone is trying to figure out what to do.”
Harvesting is the process of killing the lambs, and fabrication is cutting down the carcass to produce a cut a consumer sees in a store, according to former Mountain States Rosen Vice President of Procurement Brad Anderson.
Without Mountain States, Hasbrouck and others in the Western-based lamb industry are losing their hold on the domestic market. Before filing for bankruptcy, Mountain States handled 8,000 head of lamb each week, at least 350,000 heads per year and had capacity for up to 800,000 lambs annually, giving it an estimated one-fifth of the total U.S. lamb market
Mountain States supported a strong infrastructure of the U.S. industry, that overall accounted for “a couple million lambs a year,” said Mountain States Rosen Chairman of the Board of Directors Frank Moore. And there will be a trickle-down effect in northern Colorado.
“The vast majority, 70 to 80% percent of lambs in the U.S., are fed within 100 miles of Greeley, Colorado,” said Moore, of Douglas, Wyoming. “It’s a big part and it’s a center of the lamb feeding industry. As imports come in and take over and producers are going out of business, a supply of lambs will go down until it stabilizes again.”
JBS USA, whose Greeley beef processing plant is adjacent to the Mountain States facility, bought the building and certain assets to expand its local beef operations.
On July 31, a Lincoln, Nebraska-based advocacy organization for fair, transparent and competitive agricultural and food markets sent a letter to the Department of Justice requesting it look into the JBS purchase of the Mountain States Rosen assets. The Organization for Competitive Markets joins with congressional representatives in making the request of DOJ out of concern the acquisition violates antitrust regulations.
An OCM spokesman wrote in an email the organization’s letter to the Department of Justice points out JBS’s own lamb imports constitute nearly 50% of all lamb imports in North America and the purchase and closure of a significant competitor “would further increase consolidation in the lamb market, to potentially harmful levels.”
Cameron Bruett, head of corporate affairs for JBS USA and Pilgrim’s, said the company officially acquired the Mountain States Rosen facility in late July. Bruett wrote in an email Tuesday afternoon the company agreed not make any material changes to the facility as a sign of good faith, given the interest in the purchase.
“During that time, the Department of Justice will have the opportunity to review any concerns raised,” Bruett wrote. “We welcome their review.”
Bruett added JBS offered to lease back the facility to the former owners for 90 days “to ensure continuity for local producers, but they respectfully declined.” Bruett said this was the company’s fourth offer to continue operating as a lamb plant on behalf of the producers.
With Mountain States no longer running, Anderson said it will open the way for imported lamb to take charge in the U.S. market. Anderson said JBS is the largest importer of Australian lamb in the U.S., and Australia and New Zealand are responsible for 65-80% of lamb in the U.S., “giving imports a stronghold in the market.”
“The lamb processing industry is going to take a hit, potentially it could,” Anderson said of the domestic product. “I’m not sure what the ramifications will be. History suggests it will be a significant hit to the American lamb industry with the closure.”
Mountain States Rosen Chairman of the Board of Directors Frank Moore of Douglas, Wyoming said the cooperative closure leaves “a lot of lamb with no place for processing.” Superior Farms with locations near Denver and in California might process approximately 800,000 head of lamb a year, Moore said.
The pending Colorado Lamb Processors facility in Brush will focus on harvesting but not fabrications when it opens later this year as expected, Anderson and Hasbrouck said. The plant’s opening was delayed earlier this year by a COVID-19 outbreak.
The pandemic also played a part in adding to Mountain States Rosen’s financial struggles as a result of a purchase of a New York state operation in 2008. The cooperative was beginning to get out from under its financial challenges earlier this year, only to be shut down again by coronavirus.
Moore said it’s important to remember that more than 200 people at Mountain States lost their jobs as result of the bankruptcy and closure. That’s significant and devastating, but the health of the U.S. lamb industry overall is also in jeopardy.
“Twelve to 20% of the country won’t have a place to go through to process, and that impacts the value of every lamb,” Moore said. “Anytime you have oversupply, it impacts value. It’s bad enough to lose a business, but if it impacts an entire industry as heavily as this is going to, this is an industry gone bankrupt.”
