:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/6TYSI53KXVEVJD24DXSDZVJOP4.jpg "Beef margins in the U.S. are likely to continue to be “well above” those reported in previous years.")
Bloomberg — The global beef industry is seeing margins reach new heights thanks to operational efficiencies and rising demand from Asia to the Americas, according to top meat supplier JBS SA (JBSSA).
Beef margins in the U.S. are likely to continue to be “well above” those reported in previous years with the exception of 2021, which was an outlier year for the industry, according to Andre Nogueira, JBS president for North America operations. The U.S. beef business has changed so much in recent years that it’s hard to estimate what’s a “normal” margin for JBS’s biggest business.
“I can’t tell you what is the new margin level for U.S. beef,” Nogueira said Tuesday during the Brazilian company’s earnings call. “It has also changed given all the investments we have made to lead this business to a distinctive level.”
Rising beef demand in emerging countries is also leading JBS’s global business to new heights, while Asia has also seen an increasing appetite for meat. JBS USA exports rose 16% last year, with Asia representing more than three quarters of the demand.
“We don’t sell beef as a commodity anymore,” said Wesley Batista Filho, who heads JBS operations in Latin America, Oceania and the plant-based business. “We sell beef with value added.”
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Beef margins in Brazil are far from those seen in the U.S., though the Sao Paulo-based company has been able to raise average prices with higher sales of special cuts in retail stores. The company has also been increasing investments in operations beyond slaughtering that add to margins, such as using production residues to make biodiesel, fertilizer and collagen.
This week, JBS started to produce organic fertilizers using manure and other scraps from beef, pork and chicken operations in Brazil. The initiative is part of the company’s plan to become zero out greenhouse gas emissions through 2040.
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