Sao Paulo | Reuters — JBS SA, the world’s largest meatpacker, has been able to pass higher grain costs on to consumer prices because food demand is strong in markets such as the U.S. and Canada, executives said in an earnings call Thursday.
In Brazil, where higher feed prices have dented margins of the company’s Seara food division, the company was partially able to pass on higher costs to food prices.
“The rise in grain prices is a global thing,” said Wesley Batista Filho, director-at-large of JBS. “Given this scenario, we will have to work in a more efficient way.”
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To Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, there are two main reasons for recent increases for feed barley and wheat. Haley said on March 12 that there’s an ongoing lack of farmer selling, plus stiff competition from the grain companies looking to export barley.
On tight Brazilian corn supplies hurting Seara’s margins, Batista Filho said the company is “well positioned” to deal with the problem until the country’s second corn crop begins to be harvested next month.
Globally, JBS expects food service demand in Asia to recover as COVID-19 vaccination progresses there.
Regarding China, he forecast demand for all proteins, not only pork, will remain strong as the country grapples with the effect of African swine fever on the pork sector.
— Reporting for Reuters by Ana Mano.
