JBS May Have Bought DOJ Probe With Lamb Plant

Jorgensen Ranch sheep ( Carson Jorgensen )

One-fifth of the American lamb industry has been shuttered with the bankruptcy of Mountain States Rosen (MSR), a Greeley, Colo., lamb processor primarily owned by a cooperative of 150 ranchers. The Mountain States Lamb Cooperative (MSLC) announced its bankruptcy in June and notified the 200-plus plant employees their jobs would end August 1.

The MSR bankruptcy brings the lamb industry back to the same crisis it faced five years ago when the previous owner, JBS USA, wanted out of the lamb business and sold the plant to MSLC. Last month, however, JBS reacquired MSR at the bankruptcy sale – the plant literally sits across the road from JBS’ 5,400-head per day beef plant in Greeley – and says it plans to convert the plant to processing hamburger and cutting steaks.

Western lamb producers are more than just concerned about the closure of the industry’s second largest lamb processor. They believe JBS – which imports lamb for sale in the U.S. – seeks to reduce its competition with the closure of the Greeley facility. In what many see as a last-ditch effort, lamb producers have sought help from elected officials.

Utah Senator Mike Lee, joined by five other Senators and six members of the U.S. House of Representatives, wrote a letter to Assistant Attorney General Makan Delrahim, Department of Justice Antitrust Division, requesting an investigation into the JBS re-acquisition of the MSR facility.

In the letter lawmakers said the transaction “…may irreversibly harm competition in the domestic lamb market.”

“In addition to eliminating hundreds of jobs, MSR’s Greeley facility is one of the largest lamb processing facilities in the region, and serves sheep ranchers from 15 states, including Utah, Montana, South Dakota, Wyoming, and California,” the lawmakers said. “This facility competes head-to-head with JBS, which imports all of its lamb products.

“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.”

Besides Lee, signers of the letter included Republican Sens. John Barrasso of Wyoming, Steve Daines of Montana, Mitt Romney of Utah, and Michael Rounds and John Thune of South Dakota.

House members who signed the letter included Republicans Rob Bishop of Utah, Liz Cheney of Wyoming, Greg Gianforte of Montana, Dusty Johnson of South Dakota, Devin Nunes of California and Chris Stewart of Utah.

In a letter to Vice President Mike Pence, Carson Jorgensen, a Utah sheep rancher wrote, “Our industry and others need time to assess the damage, understand the short- and long-term impacts and determine a path forward. The abrupt closure of this plant, before the ranchers can make arrangements to replace it, will force sheep ranchers across several western states into financial ruin and extinction.”

Lamb producers say thousands of lambs are finished and ready for slaughter now, and lambs will soon be coming off summer ranges. By one estimate, the closure of the MSR facility would mean approximately 350,000 lambs may be misplaced with processing disruptions creating an oversupply of lamb which would have significant ramifications for the feeder lamb market.