In this file:
· R-CALF USA Supports Request for Immediate Moratorium on JBS Acquisition of Lamb Processing Facility
· Ranchers say JBS purchase of lamb plant could violate anti-trust laws
R-CALF USA Supports Request for Immediate Moratorium on JBS Acquisition of Lamb Processing Facility
Source: R-CALF USA
via Tri-State Livestock News - Jul 30, 2020
Woodrow, Colo. – R-CALF USA is extremely concerned to learn of the impending purchase by JBS USA Holdings, Inc. a subsidiary of Brazilian JBS S.A. of Mountain States Rosen (MSR) a lamb processing facility in Greeley, CO. In a letter sent yesterday to the Assistant Attorney General, Makan Delrahim, 15 U.S. Senators have signed on to request an investigation by the Department of Justice (DOJ) into the acquisition. R-CALF’s board and committee chairs welcome the Senators’ letter and hope the DOJ will enforce U.S. antitrust laws and block the proposed acquisition.
R-CALF USA has always been active as a producer group in working to create more competition in the meat protein marketplace. As noted by the Senators, the MSR “facility is the second largest lamb packaging plant in the United States, processing approximately 350,000 lambs annually, over 6,000 per week, with an annual capacity of nearly 800,000.” The MSR plant accounts for approximately one-fifth of the U.S.’s lamb processing capacity. Past efforts to consolidate processing capacity in other protein markets suggests JBS’s acquisition of this independent lamb processing facility would risk economic ruin for many domestic producers by eliminating marketing opportunities and enabling JBS to congest the processing pipeline.
Furthermore, the U.S. currently imports between 76% to 82% of the lamb sold in the United States. This acquisition would further exacerbate this national food security problem by placing significant control of U.S. lamb processing capacity within the hands of a foreign company whose interests are served by imports of foreign protein into the U.S...
Ranchers say JBS purchase of lamb plant could violate anti-trust laws
Carrie Stadheim, Tri-State Livestock News (SD)
Jul 30, 2020
The impending purchase and transformation of the nation’s second largest lamb processing facility has sheep producers nationwide wondering whether they will get their lambs sold this fall.
Brazilian beef packing giant JBS recently acquired Mountain States Rosen, a bankrupt lamb packing plant across the road from a JBS beef processing plant in Greeley, Colorado. JBS has said it plans to use the processing plant to grind hamburger and cut steaks, which leaves the current industry with about 350,000 more lambs than available processing facility.
With about 3,500 of their own lamb carcasses sitting in limbo right now, the Jorgensen family of Mt. Pleasant, Utah said their 2020 lamb crop – their sole source of income – could soon become a liability. About half of U.S. lamb is marketed through food service and because of the economic shutdown, that market has fallen apart, leaving Jorgensen and many others unable to sell as much lamb as usual.
Carson Jorgensen raises sheep in central Utah on private and federal land along with his grandparents, parents, brother, their wives and children. After learning of the plant’s sale on Saturday, Jorgensen has in recent days sent letters to Vice President Mike Pence, his Utah Congressional delegation, and congressional representatives from Montana and Wyoming, to help them understand the grim situation sheep producers face with the sudden disappearance of 20 percent of their sheep slaughter capacity. Jorgensen’s ranching friends across the country are also contacting their congressional delegates.
Jorgensen believes JBS is violating anti-trust laws by purchasing the plant and halting much of the country’s lamb processing.
He asked the politicians to urge the U.S. Department of Justice to demand a stay in the plant sale, which is expected to be finalized July 31, 2020.
The situation lamb producers face is dire enough to call for President Trump’s attention, Jorgensen believes.
“I believe this crisis rises to the level of the Trump Administration invoking the Defense Production Act,” he wrote. “Our industry and others need time to assess the damage, understand the short and long term impacts, and determine a path forward…Time is of the essence. Without immediate action, lamb production in the Western United States will be destroyed,” he said in a letter to Vice President Pence.
Jorgensen is holding out faith that the industry will gain the attention of decision-makers in DC. Like his 84-year-old grandfather who initiated and saw to completion a WTO tariff appeal in the 1980s, he’s dedicated to ensuring survivability for America’s sheep ranchers.
“JBS is coming after the lamb market. It is widely believed they did this to take the market share and fill it with imports,” he said. He is pleading with ag producers nationwide to join him in asking the DOJ to look into anti-trust violations.
“For JBS to do this while they were just subpoenaed in the DOJ anti-trust investigation is just blatant,” said Jorgensen. The country’s biggest four beef packers – JBS, Cargill, Marfrig/National Beef and Tyson are currently under investigation by the U.S. Department of Justice to determine if their beef pricing and cattle purchasing activities were legal during the COVID pandemic. While beef prices more than doubled, the price of fed cattle dropped by more than 20 percent at times.
“This is a wake-up call for all American farmers and ranchers, if this follows through it will decimate the sheep industry in the Western United States,” said Jorgensen.
Glenrock, Wyoming sheep rancher Brad Boner serves as the president of Mountain States Lamb Cooperative. The cooperative, which is comprised of 149 sheep ranching families in 11 western states, owns 87 percent of the now bankrupt MSR.
MSR bought the processing plant about four-and-a-half years ago from JBS when JBS stated its intent to stop processing lambs there, said Boner. With the plant being located across the road from a JBS cattle plant, the lamb plant has always utilized wastewater and steam services from JBS.
Facing recent financial struggles, MSR tried to sell the plant to another company interested in maintaining the lamb processing function. But JBS refused to provide the potential new owner with wastewater or steam services, rendering the plant essentially useless. Lacking the ability to sell the plant, MSR was forced into bankruptcy in recent months. On July 16, Wyoming’s bankruptcy court heard arguments and purchasing offers from both JBS and Greeley Fab (a newly established company consisting of the MSR chairman and another MSR board member).
JBS was awarded the right to purchase the plant for $14.25 million. Greeley Fab’s final offer of $14,050,000 fell just short.
But Boner said in the bankruptcy auction, neither the negotiating parties nor the judge placed any value on the existing employees, the families of the 149 ranching co-op shareholders, nor the rest of the industry – all of whom will obviously be significantly affected by this move.
JBS’s interest may be...