Rising Poultry Profits Offset Weak Beef Performance at JBS Amid Cattle Shortage

Reuters reported, citing JBS executives, that U.S. beef packers will continue to suffer from limited cattle supply for three to four more quarters, with a gradual recovery in the U.S. cattle herd expected to begin in late 2027.

In comments made after announcing second-quarter results, the company – the world’s largest meat producer – said other factors are also affecting its U.S. beef operations, which account for about one-third of its net sales. These include the closure of the U.S. border with Mexico in May due to a flesh-eating parasite.

Wesley Batista Jr., who leads the company’s U.S. operations, said: “The situation in Mexico is clearly significant,” adding that the Mexican and U.S. governments are in talks to reopen the border, estimating that about 1.1 million head of feeder cattle are currently unable to cross.

Among other operational challenges facing the company in the U.S. is its pork division, which has been hit hard since former President Donald Trump launched a trade war with Beijing.

Meanwhile, restrictions on Brazilian chicken exports to China and the European Union – imposed since May following an avian flu outbreak in the world’s largest poultry exporter – are weighing on JBS, which in June launched a dual listing in Brazil and the U.S.

CEO Gilberto Tomazoni estimated that if these sanitary trade barriers are not lifted, EBITDA in Brazil’s prepared foods division “Seara” could be impacted by up to about 1.5%.

Nevertheless, Seara’s profit margins remained in double digits despite the disruptions caused by avian flu in the second quarter.

Thanks to strong results also from its poultry processing subsidiary Pilgrim’s Pride, the company – now listed in New York – posted record total sales of $21 billion, while net profit rose by about 61% to $528.1 million in the second quarter.