Source: Anna Flavia Rochas, MEATINGPLACE, 8/17/18


JBS S.A. said Wednesday that its pork business in the United States has been affected by the trade disputes with Mexico and China, amid a scenario of increased domestic production.

“There was an impact in the price of hams from the U.S. to Mexico and (in the price of) byproducts that we sell in Asia as a direct consequence of trade discussions and the growth in production in U.S.,” said André Nogueira, president of JBS USA Holdings, during a conference call with analysts.

JBS reported on Tuesday that its net revenue for the U.S. pork business decreased 6.3 percent in the second quarter, year-on-year, to $1.43 billion, while EBITDA (earnings before interest, taxes, depreciation and amortization) fell 41.8 percent to $103 million. EBITDA margin was down to 7.2 percent, from 11.7 percent in the second quarter of 2017.

Nogueira said that the resolution of trade discussions with China and Mexico will be relevant for margins of the U.S. pork sector overall. He expects JBS USA Pork to close the year with a “strong” margin between 8 percent and 10 percent.

“I don't think that the hog supply will be an issue. The issue and the discussion is how successful can we be in selling all this new higher production in the export markets. We have strong positions in markets, but with this new production, with more availability, we will need to continue to sell more outside of U.S.,” Nogueira said.

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