The closing of lamb processing operations at a plant in Greeley, Colo., will have profound negative impacts on local ranchers and the lamb industry in general, according to an article by the Open Markets Institute.

JBS Inc. bought the facility from Mountain State Rosen (MSR), a rancher’s cooperative, at a bankruptcy sale and is planning to convert it to beef production. That facility is one of the largest lamb plants in the West, accounting for up to 20% of all lamb processed in the U.S. Ranchers say that as a result, they will have fewer options to sell their slaughter-ready lambs, depressing prices and throwing the lamb supply chain into turmoil.

The U.S. Justice Department has put a hold on JBS’s purchase of the plant, after a dozen Republican congressmen and senators from Western states signed a letter urging an antitrust investigation. However, there is no indication as yet that any such action will be taken.

JBS, the fourth company in Food Processing’s Top 100 list and America’s second-largest meat processor, owned the Greeley plant and leased part of it to MSR for lamb processing until 2015, when it sold the facility outright to MSR. JBS still provided steam and wastewater treatment services for the plant, from a facility it operates across the road.

MSR made a deal to sell the plant in February, but the deal foundered when JBS refused to provide steam and wastewater service to the prospective buyer. Restaurant business dropped due to the pandemic, MSR’s lender called in its loan, and the co-op declared bankruptcy in March. JBS bought the facility at a bankruptcy auction for $14.25 million and immediately announced plans to convert it entirely to beef production.

Loss of the Greeley facility “would devastate the ranch economy,” a local farm advocate told the Open Markets Institute. Consolidation, a rise in imports and a general dro in consumption has left the lamb industry more centralized than ever.