Agriprocessors closed — now where’s the beef?

NEW YORK (JTA)–A supermarket in New Jersey with a large kosher section has shelves nearly empty of kosher beef. In New York, a kosher steakhouse says its customers are canceling reservations because choice cuts aren’t always available. And the nation’s largest kosher meat producer, reportedly besieged by new orders, is turning away new customers.

The kosher meat market is in a tailspin as production at the Agriprocessors’ meatpacking plant in Postville, Iowa, which had been operating at a fraction of its normal capacity since May, finally ground to a halt this week. The company, whose meat was sold under the labels Rubashkin’s and Aaron’s Best, among others, filed for bankruptcy Nov. 4.

“What I’m hearing all over the country is that one day you can get poultry in some places, one day you can get brisket, the next day you can’t get pastrami,” said Menachem Lubinsky, the publisher of Kosher Today and a former consultant to Agriprocessors. “People are being very innovative in how they’re getting their products.”

Though Agriprocessors officials say they hope to reopen the plant later this week, trouble has long been brewing in Postville and savvy industry folks began looking for alternatives months ago.

In the wake of a federal immigration raid in Postville on May 12, meat buyers began shifting their purchases to other companies, which have struggled to meet the increased demand. Alle Processing, a New York City kosher meat supplier that has become the largest in the United States with the collapse of Agriprocessors, has had to place a moratorium on new customers, according to several industry insiders.

Retailers and restaurants who already had relationships with other suppliers have fared the best, though many report only a portion of their orders are being filled. Those who were more dependent on Agriprocessors are finding themselves in real trouble.

At Heinin’s, a specialty foods supermarket in the greater Cleveland area, the shelves have been without kosher meat for months. A buyer for the company told JTA his efforts to locate an alternative are not going well. An Albertson’s supermarket in the Dallas area also was bereft of beef on Monday.

“I just got back from the supermarket and there was absolutely none,” said kosher consumer Shalom Abrams. “Normally they have an 8-foot section of kosher meat.”

At the ShopRite in Livingston, N.J., on Sunday, the shelves were teeming with glatt kosher beef and lamb from Solomon’s and chicken from Empire Kosher Poultry, which announced this week it would be increasing production by 50 percent beginning Nov. 24. One town over, in West Orange, the situation was vastly different: The most plentiful item in the kosher beef display was the Rubashkin’s signage.

“Overall, it’s a lot less selection,” said Michelle Amin, shopping at the West Orange ShopRite. “For the community who’s here to have this kind of empty shelf, it’s crazy.”

Even large retailers with multiple supply options say their orders are not being fully filled.

Yakov Yarmove, who purchases kosher meat for the Supervalu chain, which operates more than 2,400 stores across the country, estimates he’s getting about 90 percent of what he needs. Several other large supermarket chains with reported supply disruptions did not respond to requests for comment.

Michael Schreiber, the owner of East Side Kosher Deli in Denver and a supplier of kosher meat to customers in seven Rocky Mountain states, told JTA he would have been “in deep trouble” if he had relied solely on Agriprocessors. As it is, he is struggling to keep up his stocks.

“I may order 500 pounds of a certain primal cut for my guys to then break and I may only get 300 pounds, but I am getting the product,” Schreiber said. “Are my stocks as deep as normal? No, not hardly. But I can keep customers in product.”

The decline of Agriprocessors placed fish and poultry center stage last week at Kosherfest, the annual kosher food trade show held Nov. 11-12 at the Meadowlands Exposition Center in New Jersey. While purveyors of kosher poultry and fish were abundant, including many first-time exhibitors from North America and abroad, there were only a handful of meat producers, and those few were besieged by buyers desperate for supplies. None of the major kosher meat producers were there: no Agriprocessors, no International Glatt, no Alle.

With their finances in ruins, Agriprocessors has been courting outside investors and rumors were rife at the show as to who might buy the company’s facility in Postville. Names floated most often were Empire and Alle, as well as the non-kosher giant ConAgra. Costco and Sam’s Club have both reportedly expressed interest.

Empire representatives say the company has investigated the possibility of entering the kosher beef market but has made no decisions. But Empire’s announcement that it plans to expand production of chicken is widely hoped to alleviate pressure on the kosher poultry supply at a crucial moment–the week of Thanksgiving.

“Empire is proud to be able to step up to the plate and be sure that consumers throughout the United States have easy access to kosher poultry at their local supermarkets and butcher shops,” Greg Rosenbaum, Empire’s chairman and CEO, said in a news release. “We are extremely grateful for the cooperation of our kosher certifying agencies, the OU, KAJ and Star-K, as well as the United Food and Commercial Workers Union, to make this rapid expansion possible.”

On Monday, Agriprocessors executives appeared in bankruptcy court in New York where they met their lender, First Bank Business Capital of St. Louis. First Bank initiated foreclosure proceedings against the company for defaulting on a $35 million loan.

According to a report in the Des Moines Register, First Bank had sought a total freeze on spending until Agriprocessors cleared up its debts. The company responded that a freeze would force it to cease all operations. A judge appointed a trustee to oversee the case, and a company spokesperson told the Register that the details would be worked out this week. The company hopes to resume poultry production on Thursday.

In an unrelated legal setback for Agriprocessors, the U.S. Supreme Court declined to hear its case against the National Labor Relations Board, according to a report in the industry publication Meatingplace. A lower court had rejected the company’s argument that a union vote at its Brooklyn warehouse was invalid because its workers were illegal immigrants and therefore not entitled to organize.

Agriprocessors did not respond to requests for comment.

For kosher beef, problems are likely to remain–a fact that has sparked interest from companies as far afield as Australia. Ephraim Nagar, the owner of Talia’s Steakhouse on Manhattan’s Upper West Side, told JTA he had received an e-mail from a company gauging interest in kosher meat exports from Down Under.

For Nagar, who used to get all his supply from Agriprocessors, any new product would be an enormous relief. Other suppliers have declined to deal with him because he was not a regular customer. To acquire beef, he has had to send drivers to outer borough warehouses, driving up his costs. Some customers are calling in advance to find out if the restaurant has the specialty items for which it is known.

“Assuming they made a reservation of, let’s say a table of 10,” Nagar said, “two or three people are eager to eat these bison buffalo or the baby lamb rack, and if we do not have that, they cancel the reservation.”

(JTA correspondent Sue Fishkoff contributed to this report.)