March 23, 2022
JBS says its US domestic and international businesses will continue to drive performance
Brazilian major meatpacker JBS SA said its North American operations will continue to drive performance, as the company stands to benefit from strong US domestic demand and steady meat exports to Asian markets, especially to China, Reuters and Bloomberg reported.
Andre Nogueira, JBS president for North America operations, said its beef margins in the US will exceed reports from previous years except for 2021, which was outlier year for the sector.
Nogueira said the US beef business has changed that it is difficult to project margins for the company's biggest business.
JBS USA exports increased 16% in 2021, with Asia representing more than three quarters of the demand.
The company's operations in Brazil will be affected by cost pressure as meat processors seek to purchase corn for livestock feed.
Grain prices have soared around the world due to Russia's invasion into Ukraine, affecting operations across all geographies.
JBS' Seara division, which processes pork and poultry, are unable to increase prices greatly due to the weakness of Brazil's economy. But in the US, JBS executives said consumers are able to continue purchasing meat at higher prices.
Beef margins in Brazil are not as high compared to its US market, but JBS said it was able to increase average prices with higher sales of special cuts in retail stores.
JBS managers said output for beef and pork will decline from the previous year in the US, but poultry production is set to rise. They cited USDA data for 2022.
The company's outlook for prices and margins remains positive in the US, where it derives most of its revenue. In Australia, herds are recovering but the outlook is improving.
The company's shares were 2.5% higher in early trading after it reported a US$1.31 billion profit in Q4 2021, surpassing analysts' expectations. JBS said this was thanks to its US business and strong trade ties with China.
- Reuters and Bloomberg
