May 26, 2008

Higher input costs pull Q1 results for Brazil's beef trade
 

Brazil's beef traders reported negative first quarter results due to rising input costs, the EU's partial import ban and the strengthening of the Brazilian real.

Two of the three Brazilian meatpackers listed on the Sao Paulo Stock Exchange (BOVESPA) reported losses compared with 2007's first quarter positive results.

JBS-Friboi, the largest meatpacker in the world, reported a net loss of US$3.86 million, despite an increase in consolidated net revenue of 600 percent to US$3.43 billion during the first quarter.

Minerva reported a net loss of US$1.17 million in comparison to 2007's first quarter US$6.4 billion.

JBS blamed the net loss on the strengthening Brazilian real against the US dollar, rising input costs and the export bans in place in Argentina.

Minerva claims that the EU's partial ban on imports from Brazil, together with Brazil's soaring cattle prices, hit last quarter's performance.

Brazilian cattle prices are at their highest since 1994, and are not expected to decrease during the next two or three years, due to rising local and global beef demand.

Beef production costs have soared recently and interest rates are among the highest in South America.