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The Proposed Denver Ordinance Banning Animal Slaughter: Implications for the Animal Sector and Economy

  • There is a proposed ordinance to ban the operation of existing and future livestock harvest operations in Denver, a hub of lamb processing for the state and nation, representing 15- 20% of US lamb harvest capacity.
  • 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.
  • The estimated losses extend to other sectors such as animal production, animal food manufacturing, agriculture and forestry, grain farming, truck transportation, and wholesale sectors such as grocery.

Overview

An ordinance banning livestock harvest in the City and County of Denver is proposed for the 2024 election cycle. The proposed ordinance comes amidst a time of dynamic food systems trends. These trends include higher demand for local meats, concerns about price inflation and supply chain innovations focused on animal welfare and sustainability, which perhaps influence the two viewpoints underlying the proposed ordinance:

  1. Proponents argue that a slaughter ban in the City and County of Denver is better aligned with voter values. That a policy change is needed to bolster animal welfare, address broader externalities and public impacts, including environmental quality (odors, air quality).
  2. Opponents argue that the ordinance does not reflect a growing set of consumers with preferences for locally produced meats, suggesting the ordinance will result in negative economic impacts, including a reduction in economic activity, lost wages, and food access (particularly for those seeking local meats), in addition to significant impacts for livestock producers (namely lamb/sheep producers).

This brief describes the meat slaughter and processing sector in Denver with special attention to lamb processing, which represents nearly all the slaughter in the city and county. Although most economists have concerns about outright bans since markets allow consumers and businesses to “vote with their dollars” and purchase products that align with their values, nonetheless we provide estimates of the potential economic impacts to the Colorado economy to understand potential tradeoffs from this policy option.

Colorado Meat Supply Chains and the Role of Denver Processors

Currently, Colorado has the third largest sheep and lamb inventory in the United States, (USDA NASS, 2024; Figure 1) and is second nationally, behind California, in terms of slaughter-ready lamb inventory. In total, twenty-one USDA-inspected sheep and lamb slaughter plants operate in Colorado, with a capacity of 400,000 lambs in 2022 (USDA NASS, 2023). Of the federally inspected facilities, only two (Superior Farms and Colorado Lamb Processors) have a capacity greater than 100,000 lambs per year. Superior Farms harvested approximately 300,000 lambs in Colorado during 2022 and is one of five lamb harvest facilities in the U.S. with an annual harvest capacity greater than 100,000.

Potential Market and Producer Impacts of the Slaughterhouse Ban

In short, the Superior Farms facility in Denver, CO accounts for 15-20% of the total lamb harvest capacity in the United States (USDA Livestock Slaughter Reports and Personal Communication with Superior Farms). 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. 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.

Currently, the total annual output of the animal processing sectors in Denver County exceeds $382 million, provides nearly 600 jobs, and creates nearly $45 million in employee compensation. To inform potential implications from the ordinance we conducted economic analysis that accounts for multiplier effects. We frame three scenarios that may represent outcomes if the ordinance is passed and implemented. The scenarios and estimates are shared below.

Scenario 1: Economic activity generated by livestock harvest operations in Denver County is not relocated to other areas of the state and ultimately exits Colorado.

Scenario 2: Businesses adapt and one-half of the lost economic activity is retained elsewhere in Colorado. One example of this adaptation is shifting lamb slaughter to an existing plant in Morgan County.

Scenario 3: Assumes that 80% of Denver’s lost economic activity is retained elsewhere in Colorado.

This policy brief is not a comprehensive view of the ballot issues but fills a critical information gap in the current dialogue. Interested parties are encouraged to consider a wholistic view of slaughterhouse ban in the City and County of Denver when forming their opinions, some of which are summarized below.

Some local businesses will suffer significantly: While the focus of the ordinance appears to be a single facility, economic spillovers will reverberate throughout the regional economy, because of the transport of goods and services to and from the Denver location. The meat slaughter and processing sector in Denver County is intertwined with other value-added food businesses who rely on the meat slaughter and processing sector for inputs. 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.

The ordinance runs counter to demonstrated consumer preferences and choices: Evidence suggests that consumers increasingly prefer local sourcing of food or products certifying sustainability and animal welfare innovations. The ordinance will eliminate the only substantive, local source of meat slaughter and processing for producers engaged in direct marketing of food products. Sales of domestic products are likely to be replaced by imported products. The ban has a disproportionate impact on lamb, which has a steady and growing demand among consumers, particularly among some ethnic markets. 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 ordinance reduces the resilience of the meat supply chain. Recent federal initiatives encourage investments enhancing the resilience of the food system including developing small and medium sized slaughter facilities. The purpose is two-fold: improving food security in times of disruption (e.g., a pandemic or emergency) and enhancing the competitiveness of small and medium-sized livestock operations. The proposed Denver ordinance reduces the resilience of the meat supply chain and increases costs for small and medium sized livestock producers who are unlikely to find alternatives. New startups in the growing local food industry will face more difficult circumstances because they will not have nearby access to Denver retail markets, and investment capital may be restricted or come at a higher cost.

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