Raid on kosher meat plant may spike prices

updated 4:22 p.m. ET June 10, 2008

NEW YORK - Kosher meat, always more expensive than regular beef and poultry, may grow even pricier this summer, following the arrests of nearly half the work force in an immigration raid at the nation's 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

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.

"Agriprocessors' 800 jobs are important to Postville and northern Iowa, along with the observant Jewish community across the country that relies on them for their kosher meat and poultry," Martin said. "Agriprocessors can meet the needs of those who depend on the company and operate in compliance with all laws, and I intend to see that happen."

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, Md. 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, Mass. "Kosher food is so expensive, middle-class people can't even afford it."

Rising feed and fuel prices, the same factors pushing overall food prices higher, are adding to kosher inflation — but there are also challenges specific to kosher food.

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, N.Y.

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, N.Y.

Fatmeh Bakri of Dearborn, Mich., said she has cut back on the amount of meat dishes she makes. A family favorite, laham mishwe, or shish kabob, might make the grill once a week as opposed to two or three times.

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