April 12, 2010

KosherToday Exclusive: Resurgent Kosher Meat Market Faces New Market Challenges

New York…The stage is set for the return of glatt kosher beef from Agri Star Meat and Poultry to many supermarket shelves, but the circumstances are far different than those that the company’s predecessors Agriprocessor left behind nearly two years ago. Industry sources say that there is no shortage of either glatt kosher poultry or beef in the marketplace, with the exception of several small markets that the former Agri served but other producers do not consider cost effective. In fact, the industry has experienced significant change since the ill-fated federal raid and subsequent bankruptcy of Agriprocessor, most notably the emergence of several new players in the industry, particularly in poultry. Agri Star, under the management of Jewish businessman and philanthropist Hershey Friedman, had been producing as many as 20,000 chickens a day contributing to what industry sources say is a “major glut of poultry products” and what has emerged in many markets as an unprecedented price war. The anticipated return of the beef from the Postville, Iowa plant was praised by local cattle farmers that have suffered as a result of the Agri shutdown of its beef production. The company itself is touting the resumed production as offering “extremely high quality” meat products. It also speaks of supporting the local Jewish community, which was developed and nurtured by the Rubashkin family.

Agri Star is also embroiled in controversy in the aftermath of the resignation of Rabbi Menachem M. Weissmandl of Monsey, who sources say, dropped his kosher certification of Agri products because of a poor working relationship with Mr. Friedman and his team. Said one source: “Mr. Friedman’s inexperience in the business did not augur well for his relationship with the supervising rabbis.” Rabbi Weissmandl has been replaced by the Tartakov Beis Din. It is uncertain what effect the change will have in the marketplace. Agri Star products, like those of the predecessor company, are also certified by the Orthodox Union (OU). The source wondered about the fate of the shochtim (kosher slaughterers), many brought here from Israel by Rabbi Weissmandl, which only added to the many questions about the future of Agri Star in the marketplace.

The shortages in the marketplace just after the demise of Agriprocessor have long been replaced by existing giants like Alle Processing and many newcomers, including imported beef products from South America, primarily Uruguay. Some caterers are still smarting over the loss of “real quality glatt kosher beef” that the market had become accustomed to, but one caterer told KosherToday “there are some really good cuts out there.” The kosher meat and poultry market in the US in 2009 was estimated at approximately $550 million, with less than half labeled as mehadrin or glatt. Even Hebrew National which produces kosher but not the higher standard glatt is said to have upgraded its kosher standard in recent years. According to rabbinic sources, under Rabbi Aryeh Ralbag of the Triangle K, “the kosher meat now meets the standard of being kosher.” The recast kosher poultry market includes more than a dozen brands, with one supermarket showcasing seven. This has cut into the sales of some of the established poultry producers. An industry source says “that the pie got only slightly larger but the number of chickens significantly greater and you can figure out the rest.” His reference appeared to be the effect on the long-time large producers.