A New Threat to Small Meat Processors: Monopolized Waste Disposal.

It’s a decision that has left small meatpackers, butcher shops, and livestock producers in the Mid-Atlantic scrambling. On December 1st, a JBS-owned cooking oil and meatpacking byproducts recycler, MOPAC, shut down its services for independent meat processors. Some have had to cut back production as a result and at least one plant has closed. 

MOPAC, which served butchering clients in Pennsylvania, New Jersey, and New York, says it could no longer justify continuing this smaller and costlier part of its business. However, farmers and small meatpackers feel JBS is deciding to shut out the little guy simply because it can. Vertical integration of rendering and meatpacking paired with dramatic industry consolidation leaves few options for independent meat companies to access critical biowaste disposal services, widening the gulf between dominant monopolies and nascent competitors.

“For them to shut everyone down like that, it’s pretty ludicrous, it’s pretty sad,” says Nello Loiacono, owner of Nello’s Specialty Meats in Nazareth, PA, which butchers animals from a plant that decreased production after losing MOPAC services. “I do work for over 250 farms. The ones that are really going to take a hit are the farmers. I know for a fact that some of them are not going to be able to sell meat and they will have to go out of business.”

Meat processing is a dirty business that leaves behind a lot of inedible or less desirable parts of the animal, like fat, bones, organs, and other scraps. Animal parts can spread disease and contaminate soil and water, so meat processing businesses are not allowed to throw out biowaste with the rest of the trash. Plus, these lesser loved parts have value: hides can become leather, fats tallow or fuel, and organs casings or pet food.

Rendering companies turn meat processing byproducts into sellable things and handle biowaste for packers and butchers. Renderers once paid meat processors for their leftovers, but today, smaller meat processors pay renderers to pick up their waste, if they can even find one to work with. That’s, in part, because of industry consolidation.

As the largest packers got larger and smaller and midsized packers went out of business, so did independent renderers. The dominant packers also got directly into the business of rendering for themselves. In the 1970s, independent plants processed anywhere from 40% to 70% of all materials (depending on the industry) and there were more than 700 rendering plants. By the mid-2000s there were just 273 plants left and packer-owned facilities handled more than 75% of rendering volumes. Independent renderers also merged; most recently, industry leader Darling Ingredients acquired one of its main competitors, Valley Proteins, for $1.1 billion.

“We only have one provider that will come to us,” says Alex Bates, owner of Chapel Ford Farm, a livestock farm and small meat processor in Gettysburg, PA. “It’s almost the way of internet providers, there’s not a choice, there’s one that services your area … if they go under, you’re screwed.” Bates composts his slaughter byproducts on his farm instead of using a renderer, but he says urban packers or larger packers may not have this option.  

Even though MOPAC served other packers, the company was never a true independent renderer. The MOPAC oil recycling and rendering brand is all that remains of Moyer Packing, once the ninth-largest beef processor in the United States and the largest in the eastern U.S. MOPAC began as a meatpacking plant in 1877, eventually expanded into rendering, got acquired by Smithfield in 2001, and sold to JBS with the rest of Smithfield’s beef division in 2008.

Most of MOPAC’s meatpacking byproducts come from its (now JBS’s) Souderton, PA, beef processing plant. A spokesperson for JBS told Food & Power that byproducts from independent packers and butchers represented 2-3% of MOPAC’s weekly volumes.

Nick Duca, the raw material procurement manager for MOPAC, told Lancaster Farming that serving independents was costing MOPAC in higher transportation costs and shutdowns due to waste contaminated with plastic and other non-organic trash from meat processing clients. “During breakdowns we had to pay other outlets to have product disposed from the JBS facility. It was costing us,” Duca said.

We cannot know if MOPAC would have continued providing rendering services for smaller packers had it never been acquired by Smithfield and then JBS. Perhaps local ownership would have remained more accountable to the community, or perhaps it would have come to the same conclusion to prioritize its core business. We do know that the loss of MOPAC’s service will hurt the local meat economy in Pennsylvania and beyond.

Bates doesn’t buy MOPAC’s justification for cutting services, saying MOPAC could have increased prices if small clients were not profitable. “I really do believe it’s just JBS trying to get rid of the little guys and this is their easy way to do it,” Bates argues. “JBS doesn’t want grocery stores and restaurants to buy local beef.” Bates knows of at least one smaller meat processor that decided to shut down when MOPAC pulled out, though that meat processor wished to remain anonymous.

Loiacono of Nello’s Specialty Meats processes cattle, hogs, and lamb slaughtered by the Springfield Meat Company. Springfield used MOPAC to pick up byproducts twice a week, but the new renderer they’ve found can only pick up once a week. As a result, both Springfield and Nello’s must process fewer animals.

“I used to cut 65 animals a week, the slaughterhouse has me down to 35, so you can imagine how much that affects business,” Loiacono says. Loiacono says he has too many animal trimmings to compost and a plant like Springfield has even more, leaving them few options other than building their own rendering or incineration facilities, which are cost-prohibitive.

As for the contaminated waste complaints, Loiacono understands that rendering shutdowns are a real issue, but he doesn’t think it is fair for MOPAC to punish all its independent slaughterhouse clients due to a few bad actors. He says Springfield has been working with MOPAC for over 15 years.

Under antitrust laws, dominant corporations cannot arbitrarily cut off competitors’ access to an essential service, particularly when they already do business together. The Packers and Stockyards Act also bans packers, specifically, from unduly disadvantaging certain business partners or using unfair or discriminatory business tactics. Bates wants to see the USDA step in. “This outgoing administration has always said we are for small business, small packers, and small farms, but in my mind this clearly says, no we are not,” he said.

A spokesperson for USDA told Food & Power that the Packers and Stockyards Division does not comment on whether it is investigating a specific issue. As a general policy, the division looks into all credible complaints of potential Packers and Stockyards Act violations that it receives.