U.S. Kosher Meat Prices Likely to Soar After Raid on Iowa Plant

Arrests of 400 in biggest kosher meat processor in U.S. will affect Jews and the many Muslims who buy kosher.

American Jews may face rises in the price of kosher meat after the arrests of nearly half the work force in an immigration raid in the United States' largest kosher meat processor.

Any price increases would affect not only observant Jews, but Muslims who often buy kosher meat because it meets halal guidelines, as well as people who simply buy kosher food for health and safety reasons - and who make up the majority of the $12.5 billion market. A rise would add to the already steep climb in kosher food prices over the last year.

Immigration and Customs Enforcement agents on May 12 raided Agriprocessors Inc.'s Postville, Iowa plant, arresting nearly 400 workers on immigration, identity theft and other charges. The company produces about half the country's kosher beef and roughly 40 percent of its kosher chicken; the plant was temporarily shut by the raid, but has since reopened. The arrests were quickly followed by almost 300 plea deals by workers, most of whom were charged with using false identification.

The arrests at Agriprocessors revived questions about labor practices and kosher meat within the Jewish community. The Jewish newspaper The Forward has been investigating the company's labor practices for years, raising questions about whether meat can truly be kosher if it is produced by abused workers.

A search warrant for the raid stated that a former Agriprocessors supervisor said weapons were carried at the plant and the supervisor had discovered a methamphetamine lab there. The warrant also said a rabbi at the plant berated workers and threw meat at them, and a supervisor had taped a Guatemalan man's eyes shut with duct tape, then struck him with a meat hook.

Some Jewish groups, including the Jewish Labor Committee, have called for a boycott of the company's meat.

If the company can maintain production at the plant, its prices may still rise as it hires documented workers after the largest immigration raid in history, said Joe Regenstein, a food sciences professor at Cornell University.

"I suspect prices will rise disproportionately as the real costs of production will have to get factored in," Regenstein said. "The particular competitive advantage of Agri is likely to be lost. If they end up in further trouble, there could be a shortage of (kosher) meat sometime over the summer."

Agriprocessors said Friday it hired Jim Martin, a former U.S. Attorney for the Eastern District of Missouri, as its outside corporate compliance officer.

Even before the raid, Yehuda Shain at the Kosher Consumers Union said there was a bigger spike in kosher meat prices this year than in the past - and he expects more to come. While no separate data on kosher food inflation was available, overall meat prices increased nearly 4 percent in 2007, according to the U.S. Department of Agriculture.

"Most kosher meats have gone up between $2 and $3 a pound in the last year," said Linda Berns, a personal chef in Bethesda, Maryland, who specializes in kosher meals for people with chronic illnesses.

"The situation is impossible," said Ricardo Bosich, owner of Gordon and Alperin kosher butcher in Newton, Massachusetts. "kosher food is so expensive, middle-class people can't even afford it."

Food purchased because it's kosher is a $12.5 billion industry, according to market researcher Mintel International Group. Observant Jews make up one-fifth of kosher food shoppers, while religious Muslims comprise 15 percent, according to data from Menachem Lubinsky, a kosher industry consultant based in Brooklyn, New York.

Kosher and halal meat are nearly identical, but observant Muslims often buy kosher food because it's easier to find. According to Mintel, there are 400 kosher certification agencies in the United States, but only about a half-dozen halal certifiers.

"Everything we order, we see a rise. Not just a small rise, double. We've been forced to raise prices. We hate to do it, but we have no choice," said Mohsin Alsubai, manager of the Yemen Cafe, a halal restaurant in Brooklyn, New York.

One reason kosher meat costs more is that producing it is more labor-intensive. The laws of keeping kosher, outlined in the Bible, are extensive. A few: Animals' feed can't include animal byproducts. Animals must be killed by a trained kosher slaughterer, under rabbinical supervision, and handled in a separate plant from non-kosher meat. People who keep kosher are forbidden to eat blood, so the meat is soaked and salted to remove it. Kosher Jews from Eastern Europe don't eat the back half of the cow.

Kosher companies are also smaller than many other meat producers, so they lack economies of scale in marketing and logistics, Cornell's Regenstein said.

A handful of meat producers, including Agriprocessors, Alle Processing and Aurora Packing Company Inc., dominate the North American kosher beef industry - giving the few players pricing power. The poultry market is similar. Empire Kosher Inc. and Marvid Poultry Canada, are the top chicken sellers.