There was a dramatic turnaround for JBS, the world’s largest meat processor, in 2023 with the company making a loss of $199m.

This follows on from a profit of almost $3bn the previous year. Adjusted earnings before interest, taxation depreciation and amortisation (EBITDA) were just under $3.5bn in 2023 compared with $6.7bn the previous year while revenue or turnover was relatively static at $72.9bn compared with $72.6bn the previous year.

The biggest contributor to the JBS losses in 2023 was the US beef division. Under the US GAAP accounting system, the adjusted EBITDA was a negative $141m.

In its presentation on the accounts JBS attributed this to “both for the year and for the quarter, beef margins in north America suffered a relevant impact compared to the previous year, as a result of the cattle cycle in the region, reducing the availability of animals for slaughter and significantly increasing costs. According to data released by the USDA, cattle prices remained at high levels, growing 16% year on year in [the fourth quarter of 2023] and 21% year on year in 2023.”


It was something of a perfect storm for beef processors in the US in 2023 and this has continued into 2024.

Farm gate cattle prices have remained close to the equivalent of €6/kg for much of the period, due to reduced cattle availability creating intense competition among processors. This is the highest of any major beef trading country in the world, bettered only by countries with highly protected markets.

It was something of a perfect storm for beef processors in the US in 2023 and this has continued into 2024

This was combined with weaker export markets in 2023, particularly in Asia where Japan, South Korea and China are major customers of US beef.

US exporters faced strong competition from a resurgent Australia where beef volumes increased significantly and cattle prices were half of the levels paid by US processors. Similarly, Brazil's supply increased slightly and again cattle costs for factory buyers were around half the US cost.

This explains why both the Brazil and Australian divisions of JBS returned a much stronger performance than their US counterparts.

While the JBS performance improved somewhat in the final quarter of 2023, the reality from a US beef perspective is that all the indicators suggest there won't be a dramatic increase in values secured from export markets given the strong supplies available from Brazil, Australia and Argentina.

No doubt JBS and other US beef processors will be hoping for better cattle supply to put them in a stronger negotiation position with farmers in relation to purchase price. Ultimately, that is what will dictate the financial performance this year.

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