CSU publishes plant closure report

In response to a proposed ordinance to ban existing and future livestock harvest operations in Denver – which has already qualified for the November ballot – the Regional Economic Development Institute at Colorado State University (CSU) recently published a report on the implications of closing down operations in the Centennial State’s lamb processing hub.

With proponents arguing policy change is needed to support animal welfare and opponents arguing the ordinance will result in economic impacts while severely affecting the agriculture industry and livestock producers, CSU set out to understand the potential tradeoffs of this policy option. 

Potential impacts to Colorado’s lamb processing hub

According to the U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service, Colorado is currently home to the third largest sheep and lamb inventory in the U.S and second behind California for total slaughter-ready lamb inventory. 

In total, 21 USDA-inspected sheep and lamb slaughter plants operate in Colorado, reporting a capacity of 400,000 lambs in 2022.

If passed, the proposed ordinance would require the closure of Superior Farms, a 100 percent employee-owned facility with a workforce of more than 170 people, harvesting approximately 300,000 lambs in 2022 as one of only five lamb harvest facilities in the nation with an annual harvest capacity greater than 100,000 and accounting for 15 to 20 percent of total lamb harvest capacity in the U.S.

“Shutting down this facility is likely to substantially impact the U.S.-based lamb supply chain and would severely strain existing facilities, thus reducing the volume of Colorado lamb available for purchase in Colorado and the rest of the U.S.,” reads the CSU report. “Additionally, lamb producers in the Mountain West Region would have limited options for marketing harvest-ready lambs in an already over-burdened meat processing sector.”

Further, CSU notes the total annual output of the animal processing sector in Denver exceeds $382 million, provides nearly 600 jobs and creates over $45 million in employee compensation. 

“The most pessimistic potential economic impact to the Colorado economy is a reduction of $861 million in current economic activity and 2,787 jobs after accounting for multiplier effects,” says the report. 

Other implications

While the slaughter and processing sector will feel the sharpest sting of the proposed ban, other sectors such as animal production, animal food manufacturing, forestry, grain farming, truck transportation and the wholesale sector, would see losses caused by a ripple effect as well.

“The meat and slaughter processing sector in Denver County, Colorado is intertwined with other value-added food businesses who rely on the meat slaughter and processing sector of inputs,” CSU notes. “Thus, adapting the local economy to the ban will be long lasting and costly. In short, this impact is felt across all livestock species, not just lamb.” 

Additionally, despite proponents claiming the slaughter ban aligns with voter values, CSU has found evidence suggesting consumers have an increasing preference for locally-sourced food products.

However, the proposed ban would eliminate the “only substantial local source of meat slaughter and processing for producers engaged in direct marketing sales,” which would likely be replaced by imported product.

“The ban has a disproportionate impact on lamb, which has a steady and growing demand among consumers, particularly among some ethnic markets,” notes CSU. “Moreover, the ban will likely increase the price and reduce the availability of lamb in a time where many households already have concerns about rising food prices.”

The third argument made in CSU’s report is the ban counters recent federal initiatives to enhance the resilience of the food system. 

Most recently on April 19, USDA announced the availability of $125 million in two grant programs – the Indigenous Animals Harvesting and Meat Processing Grant Program and the Local Meat Capacity Grant Program – through the Meat and Poultry Processing Expansion Program, designed to create more options for producers, increase competition and enhance the resiliency of the food supply chain. 

According to the April 19 USDA press release, “These programs are part of the broader $1 billion American Rescue Plan investment by the Biden-Harris administration to expand processing capacity for small and midsized meat and poultry processors.” 

However, the proposed Denver slaughter ban does the very opposite – reducing the resilience of the meat supply chain and increasing costs for small- and medium-sized producers who will likely have an even harder time finding available alternatives. 

“The CSU study underscores how the Denver ballot measure ban is unfair, ineffective and simply the wrong approach,” states Colorado Wool Growers Association Executive Director Bonnie Brown in a May 29 press release published by CSU. 

“Eliminating a local food source not only eliminates over $800 million in economic activity, it also hurts the environment by forcing restaurants and grocery stores to import lamb products from overseas while unnecessarily driving up food costs for consumers,” she adds

“Banning a single Denver business won’t improve animal welfare in Colorado, but it will eliminate hundreds of jobs,” adds Zach Riley of the Colorado Livestock Association. “This study shows the ban not only eliminates 170 jobs at the employee-owned plant in Denver, but it also threatens thousands of other related jobs across the state.” 

Hannah Bugas is the managing editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.