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JBS Brings Investments To Greeley And Some E. coli To Beef Eaters

The world’s largest beef producer is now responsible for the year’s largest E. coli O157:H7 beef-related outbreak to date in America.   The entry of JBS into a dominant position in the U.S. beef industry has been both recent and quick.

Dick and Charlie Monfort, who today together lead the group that owns the Colorado Rockies baseball team, would still probably have no trouble finding their way around the meat packing plant they once owned in Greeley, CO, 60 miles north of Denver.

They might have a harder time finding the gleaming headquarters building for JBS Swift USA, which today owns that Greeley packing plant and 15 others in the United States. JBS is located in “The Promontory” as far away to the West as you can get from the meat processing facility the Monfort family sold to ConAgra in 1987 for $300 million and still be in Greeley.

What Monfort Inc. sold became ConAgra Red Meats. It was next sold to an investor group and became part of Swift & Company. Two years ago, all Swift & Company operations in the U.S. were swept up for $1.4 billion cash by JBS SA, which is today the world’s largest beef producer.

How big? JBS has the capacity to kill, process, and pack 80,000 head of cattle per day. JBS operations include 22 in Brazil, 6 in Argentina, 10 in Australia, 10 in Italy, and the 16 in the US.

From his new offices, with striking views of Colorado’s Front Range, Wesley Batista, President and CEO of JBS Swift USA, can probably get to his estate-size home in Fort Collins, CO faster than he can drive through Greeley’s clogged street traffic to the meat plant on the east side of town.

But it was in that Greeley plant that on one day in April produced the bad beef now being recalled after they were linked to the current multi-state out break of E. coli O157:H7 that the Centers for Disease Control & Prevention (CDC) says has made at least 18 people sick.

The Greeley beef plant has struggled with more than the turnover in ownerships since the Monforts left it to others.   Even when Dick remained as a Con Agra executive, the Greeley plant suffered through a massive 19 million pound recall in 2002.

 The darkest moment for the company and surrounding community came in December 2006 when federal agents raided six Swift operations in the U.S., including the Greeley plant and arrested a total of about 1,200 employees for alleged immigration violations.

Critics charged the raid was politically motivated to send a message to other employers and rounded up citizens and non-citizens alike so long as they did not speak perfect English and were not light-skinned.

That description also fits Mr. Batista, the Brazilian son of the 75-year old founder of JBS. He was took on the job of being CEO for JBS Swift USA because of his hand-on management style and experience in running beef processing plants. When he arrived in Greeley two years ago, he planned to work on his English before taking on a more public posture.

He is still working on his English, but has responded to demands to speak to cattlemen and community leaders where JBS Swift plants are located.    Cattlemen are said to be less suspicious after hearing him and community leaders are downright giddy.

In addition to the new headquarters, Greeley has benefited from JBS adding a 250-truck transportation unit, expanding operations, adding shifts, and employing 1,500 more people. With two shifts going, the Greeley beef plant can process 6,000 cattle per day.

JBS Swift might have been the largest beef producer in the U.S., but the Bush Justice Department in October 2008 filed a challenge to its $560 million purchase of Kansas City-based Natural Beef. Cattlemen worried about “unbridled concentration.”

JBS pulled out of sale, leaving it No. 3 in the U.S. behind Tyson’s and Cargill.   It did last year buy the Smithfield Beef Group, including the Five Rivers Cattle feed lot operation. 

Now called “JBS Five Rivers,” it has ten feed yards with a one time capacity to fatten 820,000 head of cattle in four different states adjacent to the existing JBS slaughter facilities. Almost 2 million head of cattle were fattened in these feed yards in the last twelve months.

The Colorado Livestock Association heard from Batista last Friday. The beef recall had been announced a couple of days earlier, but had not yet been expanded to 380,000 pounds and connected to the multi-state E. coli O157:H7 outbreak by CDC.

If Batista mentioned the recall to the cattlemen, the Greeley Tribune reporter must not have thought it was important. What was important was talk about investment in cattle.

“Without cattle, we don’t have an industry. We invested $3 billion here and we have only one raw product and that is cattle,” Batista said. “We are very optimistic and we are starting to see growth all over the world. There is some great opportunity out there and we all need to work towards that.” 

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