JBS S.A., the Brazil-based meat company with a large share of U.S. beef, chicken and pork production, reported a 68 percent jump in third-quarter revenue and said it is optimistic global meat demand will grow next year.
While there is “discomfort” with the sluggish U.S. economy, the weak dollar is helping boost exports to other parts of the world where growth is stronger, Joesley Batista, chief executive officer for JBS, said in a statement late yesterday.
JBS has seen “substantial” increases in exports from the U.S. across all meats and “we don’t see this increase as sporadic trade, but as a solid ongoing business which will continue to enhance our margins in the U.S.,” Batista said the statement.
With incomes in Asia and other regions expanding, “more demand for our products is coming from regions where it is difficult to increase production,” Batista said. “Thus, international trade is taking on a new dimension.”
In the U.S., shrinking cattle and hog herds led to higher meat prices this year, sending wholesale pork to a record in August. JBS expects meat prices to continue rising in 2011 as demand outpaces supply, company executives including Batista said during a conference call today. For JBS, that should offset any impact from surging corn prices, they said.
“We feel quite good about 2011,” the executives said. JBS generates a third of its global revenue from export, the company said.
JBS’s U.S. beef operations generated revenue of $3.36 billion during the third quarter, up 18 percent from the same period in 2009, the company said in yesterday’s statement. In U.S. pork, revenue rose 38 percent to $772 million, and chicken revenue totaled $1.72 billion.
U.S. cattle and hog slaughter during the quarter totaled 5.2 million head, little-changed from a year earlier.
Since 2007, Sao Paulo-based JBS spent more than $2.7 billion on U.S. acquisitions in beef, pork and poultry. The company paid $1.4 billion for beef and pork processor Swift & Co. in 2007 and, in 2008, purchased Smithfield’s cattle feeding and beef operations for $565 million.
Earlier this week, JBS said it increased its stake in Colorado-based chicken processor Pilgrim’s Pride Corp. to 67 percent from 64 percent.
Also today, JBS executives said no decision has been made on whether to add a pork plant in Illinois. Earlier this fall, Pekin, Ill., officials held talks over bringing a Swift hog processing plant to the area, the Peoria Journal-Star reported Oct. 20.
JBS’s total revenue during the third quarter was $8.17 billion, up 68 percent from a year earlier and partly reflecting recent acquisitions, according to yesterday’s statement.
Despite the revenue surge, third-quarter profit fell 10 percent because of higher costs. Net income fell to $78.9 million from $88 million a year earlier.