In the industry’s big picture, the collapse of a $250 million company barely rates a ripple. There is disaster for those directly involved, of course – owners, executives, suppliers, local communities and, perhaps most of all, hourly workers, who usually have no economic cushion to absorb the sudden loss of a job. But on a scale where $250 million in annual sales puts a company somewhere around 40th on the list of largest U.S. meat and poultry firms, the industry little notes a newly missing mid-size operation.
Except that Agriprocessors, the Iowa meat and poultry company that foundered earlier this year after a historicallyhuge raid by agents of the Department of Homeland Security’s Immigration and Customs Enforcement agency and the subsequent fallout from a spectacular labor scandal, was no run-of-the-mill, mid-size meat company. As the largest U.S. processor of certified glatt kosher beef, Agriprocessors was a vital supplier of meat to Jewish consumers in North America. The loss of the company’s production put a hole in kosher meat supplies that other companies are still trying to fill. Moreover, the nature of the charges against the owners of Agriprocessors, as well as the unprecedented force of the ICE raid on the company’s Postville, Iowa, plant, followed by what some observers say has been a corruption of justice for Agriprocessors workers innocently caught up in the politics of immigration reform, has caused a deep discussion among Jewish and kosher authorities.
"There’s no question that the plant going offline creates a real supply issue for kosher meat," says Rabbi Menachem Genack, CEO and rabbinic administrator of Orthodox Union, the kosher certification organization that certified Agriprocessors meat. "This was a very important plant. It was a mid-size plant, which is the right size for kosher production, but most of these kinds of plants went out of business in the 1980s and ‘90s. There aren’t many left, so it’s a big loss."
Alle Processing in Queens, N.Y., is now the largest producer of glatt kosher beef, and it increased production beginning last fall when it was apparent that Agriprocessors was not likely to survive. Empire Kosher Poultry increased production 50 percent back in May and has maintained that level through the year; the company is investigating expanding into kosher beef. "There’s certainly a need," says company spokesman Elie Rosenfeld. "We’re looking for the right product mix."
As it happens, the Agriprocessors debacle occurred in a time of market expansion for kosher products, including meat. The pool of kosher consumers is growing from within, says Rosenfeld, who notes that the average Orthodox family has 4.5 children, far more than the average non-Orthodox American family. What is more, children who grow up in kosher families have a strong tendency to keep kosher as adults – Rosenfeld says the "kosher retention rate" is 98 percent.
According to market research conducted in 2005, there were more than 45 million kosher consumers worldwide at the time of the study, yet fewer than 45 percent of these are Jewish. Kosher foods have proven attractive to Moslems and Buddhists as well as to meat-eschewing consumers such as Seventh Day Adventists, vegans and vegetarians, who use foods labeled kosher pareve (containing no meat or dairy ingredients). The same study noted a rapid increase in kosher numbers, from 8 million consumers keeping kosher in 1988 to a projected 30 million this year. Another study, also from 2005, pegged the kosher foods market at $600 billion worldwide, with an annual growth rate of 15 percent. According to CBS Marketwatch, 40 percent of all foods sold in the U.S. could qualify as kosher. Last May, the largest kosher supermarket in the U.S. opened in Queens with 20,000 square feet of retail space.
Kosher foods fall under kashrut, the Jewish dietary laws, the origins of which are found in the Torah’s (Old Testament’s) books of Leviticus and Deuteronomy. Among those laws are restrictions on kinds of meat: meat from animals that ruminate and have cloven hoofs – cattle, for instance – is permissible, while pork from hogs, which do not ruminate, is not. Thus, in a meat-inclusive kosher diet, beef is an essential element. Glatt kosher meat can come only from animals that have been ritually slaughtered according to kosher regulations (shechita) and that have had the lungs checked to ensure they are free from inflammation and scarring.
But it is more than the loss of Agriprocessors’ beef production at a time of kosher market expansion that troubles Rabbi Genack. The manner in which the raid was conducted by ICE, the spectacular nature of the accusations against the company’s owners – Aaron Rubashkin, the patriarch of the family, and his son Sholom – and the jailing of hundreds of Agriprocessors workers, most of them immigrants without good English skills, all concern him.
"The perception that some people have from the headlines that this plant was a den of inequity is not accurate. It’s such an imbalanced picture," he says. "This plant was not so different than other plants."
Perhaps. The Rubashkins, who got their start in the kosher meat business in Brooklyn and built their company "brick by brick, day by day, night by night," as 82-year-old Aaron told The Forward, the Jewish daily newspaper, have been charged by the Iowa Attorney General with more than 9,000 counts of child labor law violations (each day an underage worker is employed counts as one charge). Immediately after the charges were announced, in early September, Orthodox Union withdrew its certification of the Postville plant, and soon thereafter Agriprocessors declared bankruptcy. The collapse of the company follows a May 12 raid on the plant by hundreds of ICE agents, which resulted in the arrests of nearly 400 Agriprocessors hourly employees, most of them immigrants – the largest such single-site raid in U.S. history.
According to Jim Benzoni, an Iowa attorney who represented many of the arrested workers, the Department of Justice had been building a case against Agriprocessors for several years on suspicions the company was employing underage and/or illegal workers. "Agriprocessors was in a class by itself when it came to abusing the system and exploiting people who are here only for the chance to build a better life, like anyone would be," he told MEATPOULTRY.com earlier this year. "What ICE did was go in and stomp all over that investigation.
They trashed it. And this is all about politics, all about appealing to the nativist, racist Rush Limbaugh crowd."
He said more than 300 of the cases were decided in court in less than five days. "It was railroading. They just hammered these cases through, and the sentence was exactly the same for every single person – five months in jail and then a warning to get out of here. They decided to mass produce criminal justice," Benzoni fumed. "Well, that’s not justice. In fact, it’s the opposite of what American law is supposed to be all about."
But Rabbi Genack knows a different Agriprocessors, he says. Aaron Rubashkin has contributed so much to Jewish charities that he became "almost a saintly figure," according to The Forward, within the ultra-Orthodox Chaban-Lubavitch sect to which the Rubashkin family belongs. An immigrant himself, from Russia, Aaron employed several members of his family in his business, which stretched from the original butcher shop in Brooklyn to Florida to the Midwest.
Transforming the kosher industry
In 1987, Aaron bought an empty meat plant in Postville that had been previously occupied by Hygrade Foods. The arrival of the Rubashkins was good economic news for the small Iowa town, though the Rubashkin family, by some accounts, rubbed some locals the wrong way with accusations of anti-Semitism and their insistence that they weren’t about to be persecuted in Iowa like so many Jews had been persecuted elsewhere. But in time, and through paid-for junkets to Europe for Postville city council members as well as sizable donations to a local child-care facility, the Rubashkins gradually won over the town.
The Postville plant occupied center stage in a transformation of the kosher meat industry. Until the Rubashkins came along, most kosher meat in the U.S. was sold through small neighborhood butcher shops. Only Hebrew National, the brand now owned by ConAgra Foods Inc., and Empire Kosher Poultry had much reach beyond traditional Jewish communities.
But in Postville the Rubashkins created a vertically-integrated business, owning the real estate the plant was built on as well as the distributor of the products the plant produced. Beef from Agriprocessors – the Rubashkins vacuum-packaged it, which was a huge change from traditionally presented kosher meat – could be found in supermarkets across much of the U.S., including in communities that had few Jewish residents. Even though the Postville plant was mid-sized by U.S. beef industry standards, in the kosher world it was a giant, and the Rubashkins used the economies of scale they gained from the operation to undercut the prices of other kosher meat distributors as well as the old neighborhood butcher shops.
As Agriprocessors’ business grew – from a reported $80 million in sales in 1997 to $180 million in 2002 to an estimated $250 million in 2007 – the company expanded into South America, into poultry, into warehousing in Florida, and the Rubashkins eventually bought a second slaughterhouse in Gordon, Neb., for kosher processing of lamb, bison and cattle.
The fact that the Postville plant was non-union attracted the attention of the United Food and Commercial Workers, which began working with Agriprocessors workers in 2004. Allegations of cruelty in the operation’s kosher kill brought protests, and a secretly-made videotape, from the People for the Ethical Treatment of Animals in 2005. In 2006, The Forward began publishing articles describing alleged labor abuses at the plant.
Rabbi Genack says that while he can’t say for certain who originally tipped off ICE, he thinks the union and PETA activities at least brought an unwelcome spotlight to the Rubashkins, who typically worked behind a cloak of privacy. "Why would ICE be interested in this particular plant? There are other plants, much larger and with many more workers, for them to be concerned about. Some things don’t add up here, and I’d like to see a real investigation into what really went on."
He adds: "I don’t think the government handled it well at all. To ratchet up the pressure like they did, it makes no sense. Sholom Rubashkin could not even get bail – Bernard Madoff got bail, but not Sholom Rubashkin." But the rabbi doesn’t believe the Rubashkins were singled out because they are Jews. "No, no. There was none of that," he tells MEAT& POULTRY. "It was other things." He also doesn’t believe the charges of child-labor violations will stick.
But he agrees that Aaron Rubashkin, who left Russia with his wife as the Nazis invaded during World War II and who learned the butcher trade in Vienna and Paris prior to arriving in America, may have not fully understood the vast differences separating a neighborhood kosher meat company in Brooklyn from a beef-packing plant in rural Iowa. "It’s not the same thing, not the same business. I think that may be part of their problems, actually."
A murky future
At this point, the future of Agriprocessors is murky at best. At the beginning of December, a New York bankruptcy court approved a $2.5 million advance to get the Iowa plant up and running again, at least into January. Meanwhile, a federal grand jury in Iowa returned a 12-count indictment against Sholom Rubashkin, the former Agriprocessors chief executive; Brent Beebe, plant operations manager; Hosam Amara, former plant poultry manager; Zeev Levi, former plant poultry manager; and Karina Freund, former plant human resources employee. Sholom Rubashkin was also arrested in November for bank fraud. Later in December, Freund pleaded guilty to the charge that she had helped hire illegal immigrants at the Postville plant. Trial on the thousands of alleged child-labor violations is scheduled to begin in April.
With or without Agriprocessors, however, the future of kosher meat in the U.S. isn’t murky at all. "We find more and more people keeping kosher for food-safety reasons," says Empire Kosher Poultry’s Elie Rosenfeld. "Overall, we’re seeing an increased interest in our product and our brand."
"[T]here is much more going on in the kashrus world – and at [Orthodox Union] kashrus – than Agriprocessors," responded Rabbi Genack in a recent interview with Rabbi Yitzchok Hisiger of Yated Ne’eman, an Israeli newspaper. "That is why we are working so closely with the company to get it on the right track, so that we can devote full attention to our basic mission – to bring the highest level of kashrus to the Jewish people all over the world."
This article can also be found in the digital edition of MEAT&POULTRY, January 2009, starting on Page 58. Click