The company, whose products include beef, poultry and pork, posted a net profit of $415 million (C$574.8 million) for the October-December period, up 0.5 per cent from a year earlier but slightly below the $428 million forecast by analysts polled by LSEG.

JBS said tighter cattle supplies in the United States have driven up livestock costs and squeezed margins in its North American beef division, its largest business by revenue.

Chief Executive Gilberto Tomazoni told Reuters the U.S. cattle supply outlook would remain challenging this year because of the current downturn in the livestock cycle. The company also faces a labor strike at a Colorado plant.

“We don’t think there will be any significant change this year in U.S. cattle supply. It will continue to be a difficult year for us,” he said, adding that strong customer demand could help offset some of the pressure.

North American beef still better than expected

Analysts said despite the pressures on the business, the results from JBS’ North American beef division were better than expected, including the year-over-year margin compression.

“This reflects resilient U.S. demand and disciplined cost management, even as cattle prices remained high,” analysts at JPMorgan wrote.

Santander analysts said they believed tailwinds from derivatives contracts helped to offset elevated U.S. cattle prices, and noted beef demand remained strong despite higher prices.

JBS shares were little changed in after-hours trading. In a separate statement, the firm announced dividends of $1 per share.

JBS’ total adjusted earnings before interest, tax, depreciation and amortization (EBITDA) fell seven per cent to $1.72 billion (C$2.38 billion), but above analysts’ forecasts of $1.56 billion. The adjusted EBITDA margin fell 1.8 percentage points to 7.4 per cent.

Net revenue rose 15 per cent to a record $23.06 billion (C$31.94 billion), topping analysts’ estimate of $22.38 billion, helped by record sales in its North American and Brazilian beef operations.

Logistics costs and China’s measures

Tomazoni said the U.S.-Israeli conflict with Iran had increased logistics costs, but he said trade flows remained open and the firm has not seen impacts on protein demand in the Persian Gulf. JBS’ three factories in the Middle East are working normally, he added.

JBS, like other beef exporting companies, also faces restrictions in 2026 on expanding shipments to China, as the Asian country has implemented curbs, including quotas and tariffs, on beef imports from key supplier nations.

He said in Brazil’s case, the country will have to place the volumes that do not go to China in other markets, adding domestic sales could partially offset the impact of the restrictions.

— Additional reporting by Utkarsh Shetti in Bengaluru

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Last year, lower U.S. soy sales to China allowed Brazil, the world’s largest soybean producer and exporter, to ship 85.4 million metric tons to China, an 18 per cent increase from 2024, according to Brazilian government data.

Though Hedgepoint has not released an exact forecast for Brazilian shipments to China, its bet is that Brazil’s soy sales to China may increase even after President Donald Trump said the world’s biggest importer would buy more beans from U.S. farmers this year.

China is expected to raise imports by 4 million metric tons to 112 million tons in 2026, according to Hedgepoint, creating demand that either Brazil or the U.S. could supply.

“Argentina will export less this year because its crop is smaller,” said Luiz Fernando Roque, a Hedgepoint Global analyst. “That already puts another 4 or 5 million tons in the hands of the Americans or Brazil.”

Regarding Argentina specifically, aside from a smaller projected soy crop, the country tends to focus on domestic processing to make soymeal and oil, Roque said.

In 2025, the U.S. share of China’s soybean imports fell to 15 per cent, from 21 per cent the year before, while Brazil’s rose to 73.6 per cent, up from 71 per cent in 2024, according to Hedgepoint data.

Argentina’s share jumped to seven per cent, from four per cent, according to Chinese government data.

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The company said third-quarter profit dropped to $581 million (C$815.1 million) from $693 million in the year-ago quarter, citing negative beef margins in the U.S. amid multiyear-low cattle supplies.

Why it matters: Diminished beef cattle herds in North America have led to record-high prices for cattle producers as processors compete to fill demand.

“The industry continues to navigate a challenging cattle cycle, with limited cattle availability for processing,” JBS said in the earnings statement. “With cattle supplies at historically low levels, live cattle prices have remained high, pressuring profitability.”

In remarks about results, CEO Gilberto Tomazoni noted the situation is unlikely to be resolved soon.

JBS’s adjusted earnings before interest, taxes, depreciation and amortization, a measure of operating income known as EBITDA, came in at $1.835 billion (C$2.574 billion), smaller than the $2.153 billion reported a year ago, the company said.

Net sales, however, rose by 13 per cent to $22.6 billion in the third quarter, having grown across all business segments, the company said.

Regarding Brazilian beef operations, JBS reported strong net sales growth, driven mainly by exports and increases in both sales volumes and prices, as well as by higher meat prices in the domestic market.

Tomazoni said that in 2026, Brazil’s cattle herd might be slightly reduced as more female cows were processed compared with male ones in the second quarter.

Brazil, where JBS was founded, is the world’s largest beef exporter. It still boasts the world’s biggest commercial cattle herd.

For its Seara processed foods division, JBS said it posted the highest export volume in history despite temporary trade bans imposed by key importers such as China and Europe due to an avian influenza case in Brazil in May.

The company said those restrictions forced it to redirect certain chicken meat cuts to other markets, which drove a price drop.

The appreciation of the Brazilian currency also negatively affected the company’s meat exports out of Brazil, Tomazoni noted.

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“The imminence of the cattle cycle shift brings challenges. We are preparing through partnerships, contracts, and close relationships with ranchers to preserve our volumes,” Eduardo Pedroso, executive director of origination at Friboi JBS, told reporters at an event in Sao Paulo.

Why it matters: JBS is the world’s largest meat producer and Brazil is the top beef exporter. A decrease in cattle supply would come at a time when other meat producing nations, including the United States, face similar shortages.

Brazil has experienced a significant increase in cattle slaughter over the past 24 months due to oversupply, which allowed for higher processing rates in the country’s meat industry. However, signs now point to reduced supply next year.

According to consultancy Datagro, cattle slaughter in the country is expected to drop more than nine per cent in 2026 from this year, reaching 37.1 million animals, after estimated jumps of more than 16 per cent between 2023 and 2024 and three per cent from 2024 to 2025.

“With crop-livestock integration, tech adoption, earlier slaughter age, and productivity gains, cycle impacts can be softened. That’s what we expect,” Pedroso said.

Exports to U.S. expected to fall

Brazil’s beef exports to the United States are expected to falling further in September from the previous months, the head of local beef lobby Abiec said on Wednesday, in a move linked to higher tariffs imposed by President Donald Trump on goods from Brazil.

“The loss of our second-largest market makes a difference,” Robert Perosa said at an event hosted by consultancy firm Datagro. “But surprisingly, even with the 76.4 per cent tariff, there are still exports to the U.S. because of the competitiveness we have gained.”

Perosa said that beef exports to the U.S. should fall to about 7,000 metric tons in September, from around 9,000 tons in August and 30,000 tons per month in the period preceding the tariffs, which came into force in August.

The U.S. used to be the second-largest buyer of beef from Brazil. That changed last month, when Mexico took over the position after Trump imposed a 50 per cent levy on U.S. imports of several Brazilian goods.

The fresh duties added to a 26.4 per cent import tax faced by Brazilian beef that was shipped outside a previously established quota.

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Brazil is the world’s largest beef exporter, with China as its main trading partner. In August, Mexico overtook the U.S. to become its second-largest export destination for the commodity.

“It is very likely that countries that can triangulate Brazilian beef will increase their purchases following Mexico’s example,” Mauricio Nogueira, director of livestock consultancy Athenagro, said in an interview. “If Mexico starts sending beef to the U.S., it will have to buy from someone, it will have to buy from here.”

Argentina would be another candidate to import and eventually re-export Brazil’s beef to the U.S., he added.

Nogueira’s Athenagro did not change its year-end projection for Brazil’s beef exports after Trump’s 50 per cent tariffs on the country’s products took effect on August 6. His consultancy is projecting a 7.5 per cent increase this year in Brazilian beef exports, to 3.08 million metric tons. Through July, such exports rose more than 13 per cent.

Luis Rua, secretary of trade at Brazil’s agriculture ministry, said Brazilian beef helps keep Mexican inflation in check. Whether Mexico will re-export supplies from Brazil is unclear.

“We send it to Mexico, but we don’t know exactly what Mexico will do with the meat,” he told Reuters.

Economist Thiago de Carvalho confirmed expectations of a shift in global beef flows, with Brazil potentially selling to markets previously served by Australian exporters, for example.

Factors such as tight global beef supplies, which the U.S. is facing after its cattle herd hit historical lows, may also direct demand to Brazil, Carvalho added.

Japan, which traditionally buys meat from the U.S., may soon open up for Brazilian products, he said.

— Reporting by Roberto Samora in São Paulo and Kylie Madry in Mexico City.

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In remarks made after releasing second quarter results, the world’s largest meat company said other factors affecting its U.S. beef operation, which accounts for about a third of its net sales, include the U.S. closure of its border with Mexico in May due to a New World screwworm, a flesh-eating parasite.

“The Mexican situation is obviously relevant,” said Wesley Batista Jr, who leads JBS’ U.S. operations.

The Mexican and the U.S. governments are in talks for potentially reopening the border, he said, estimating around 1.1 million head of feeder cattle cannot go through at this point.

Other operating challenges in the U.S. for the company include the pork business, which has been heavily hit since U.S. President Donald Trump started a trade war with Beijing.

Restrictions on Brazilian chicken exports from China and the European Union, enforced since May after a bird flu outbreak in the world’s largest poultry exporter, are also weighing on JBS, which in June created a dual U.S.-Brazil listing.

CEO Gilberto Tomazoni estimated that if sanitary trade barriers are not removed, earnings before interest, tax, depreciation and amortization (EBITDA) of its Brazil Seara prepared foods division may be impacted by around 1.5 per cent.

Seara’s margins, however, remained in the double digits despite bird flu-related disruptions in the second quarter.

Bolstered also by strong results from JBS’ poultry processor Pilgrims Pride, the firm, now listed in New York, posted record overall net sales of $21 billion (C$29.01 billion) while net profit rose nearly 61 per cent to $528.1 million (C$729.6 billion) in the second quarter.

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Sao Paulo | Reuters — Brazil is ready to declare the country free of the bird flu virus on commercial flocks, Edivilson Brum, the head of Rio Grande do Sul state’s agriculture department, said on Wednesday in a statement.

Why it matters: Brazil is the largest global exporter of chicken.

The 28-day countdown for reclaiming the country’s disease-free status began on May 22 following the complete disinfection of the farm where Brazil’s only commercial flock outbreak was detected last month.

Under existing trade protocols, China and other importers banned chicken imports from Brazil, the world’s largest exporter, pending measures to control the disease on commercial facilities.

“We have fulfilled all the steps provided for in the health protocols so that Brazil can once again declare itself an influenza-free country to the World Organization for Animal Health,” Brum said, referring to the highly pathogenic avian influenza virus (HPAI).

The Brazilian ministry of agriculture did not have an immediate comment.

Brazil’s first outbreak hit a chicken breeder farm in Brazil’s southernmost state of Rio Grande do Sul last month, triggering trade bans that may now be reversed with the regaining of the disease-free status.

Reclaiming Brazil’s status as free HPAI is not automatic and must be confirmed by the World Organization for Animal Health (WOAH), according to guidelines from the body.

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Why it matters: Brazil is the world’s largest chicken exporter.

Brazil, the world’s largest chicken exporter, said on May 16 it had identified a bird flu outbreak on a commercial farm in the southern city of Montenegro, triggering nationwide or regional trade bans from dozens of countries.

The list includes China, the largest buyer of Brazil’s chicken in 2024, as well as top clients South Africa, the Philippines, the European Union and Mexico.

Exports of “fresh, chilled and frozen poultry meat and edible offal”, a category mostly made of chicken meat, had been up 0.2 per cent year-over-year in the first three weeks of the month, before most of the trade bans started to kick in.

But for the first four weeks of the month, that trend reversed, falling 1.5 per cent to an average of about 19,900 metric tons per day, data showed.

Itau BBA analysts wrote in a note to clients that negotiations between Brazil and the countries which banned the purchase of Brazilian chicken will dictate the extent of the negative impacts on the trade.

“The situation tends to worsen if new cases emerge, but even if it is restricted to just this one, we believe that exports will decline at least in the next month,” the analysts wrote.

Brazilian authorities hope that a 28-day observation period, which started last Thursday, will show its chicken farms are free of the disease.

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The outbreak in the world’s largest chicken exporter, detected in the town of Montenegro in the state of Rio Grande do Sul, triggered trade bans from multiple countries.

Why it matters: Brazil, the world’s largest chicken exporter, and is currently banned from exporting poultry to multiple countries due to bird flu cases.

The report from state authorities late on Wednesday that the farm was cleared means that if no other cases of bird flu are detected on Brazilian commercial chicken farms over the next 28 days, the country may be considered free of the disease.

The count starts on Thursday, authorities said.

“We need to ensure that the 28 days of observation occur without new outbreaks,” Agriculture Minister Carlos Favaro said after a meeting with Rio Grande do Sul Governor Eduardo Leite this week. “We are reinforcing actions to ensure that everything is perfectly safe,” he said.

Eleven active investigations into potential bird flu cases in Brazil are ongoing, including two on commercial chicken farms in Santa Catarina and Tocantins states.

On Wednesday, Tocantins state authorities ruled out an outbreak of bird flu in the farm where the investigation was being conducted, citing preliminary test results. However, the federal government is conducting additional tests, according to the agriculture ministry’s website.

Wagner Yanaguizawa, an analyst at Rabobank, said the next few days will be decisive in determining whether the outbreak has been contained.

“After 28 days, if there are no new cases from then on, Brazil can declare itself free of the disease,” he said, adding that it will then be up to the importers to lift existing trade bans.

“But then trade flows will most likely return to normal,” Yanaguizawa said.

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ABPA president Ricardo Santin told Reuters in an interview that rejection of cargoes may vary according to the date of shipment before outbreak’s confirmation, ranging from 14 to 28 days at the discretion of the destination countries’ official veterinary services.

Why it matters: Brazil, the largest exporter of chicken in the world, is the latest in a long line of countries to fall prey to bird flu.

The situation puts meat processors including BRF and JBS in a tight spot, as they deal with additional logistics costs and uncertainty related to the extent of ongoing trade embargos triggered by the health emergency.

Brazil accounts for 39 per cent of the global chicken trade, Santin said, citing fresh trade data.

Mexico, Chile could reject cargoes

Easing restrictions for cargos in transit is a possibility, Santin said, particularly if the cargo comes from a region far from the outbreak in the town of Montenegro, in Rio Grande do Sul state.

“But that will require negotiations,” Santin said. Mexico and Chile are among countries which would also reject cargoes under existing health protocols related to bird flu outbreaks, he added.

It is not possible to calculate losses stemming from export restrictions in force after confirmation of the first bird flu outbreak on a Brazilian commercial chicken farm, Santin said.

That is because the scope and duration of trade bans may vary according to health protocols and negotiations with importing nations, Santin said.

China, for example, enforced a nationwide ban on Brazil’s chicken imports for about three weeks after a case of Newcastle disease – also found in Rio Grande do Sul – last year, Santin said.

Later, China narrowed the scope of the ban to a statewide restriction that currently remains in place.

Brazil’s government asked China to restrict its bird-flu-related embargo on chicken imports to products just from the town of Montenegro, local media reported on Tuesday.

Brazil asks China to revise trade protocols

The agriculture ministry confirmed a request made earlier this month to China to revise existing trade protocols, suggesting implementation of regional rather than countrywide export bans in the event of health emergencies, though denied asking anything specific related to the current bird flu outbreak.

In total, some 20 countries imposed chicken trade bans on Brazil under existing health protocols, the Agriculture Ministry said on Monday.Unlike China, other major importers like Japan, the United Arab Emirates and Saudi Arabia are less strict and enforce regional bans under the existing health emergency protocols.

Santin said it is up to the exporting companies to deal with returned cargoes, adding they also have the possibility of redirecting some consignments.

—Additional reporting by Lisandra Paraguassu in Brasilia

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