Source: Lisa M. Keefe, MEATINGPLACE, 7/2/15


JBS USA’s pending purchase of Cargill’s pork production and processing operations moves JBS from the No. 3 domestic pork processor to the No. 2 spot, ahead of Tyson but behind Smithfield as measured by annual hog slaughter.

As measured by revenue, however, Tyson still bests the combined JBS business, boasting more than $6 billion in revenues in its pork segment vs. an estimated $5.6 billion for post-acquisition JBS’s pork business, said market analyst Steve Kay, editor and publisher of Cattle Buyers Weekly.

“My analysis is that Cargill … is not content at being No. 3. I’m not surprised that JBS made a play there; they are incredible opportunists,” Kay told Meatingplace. “And $1.45 billion is a good deal.”

Michael Martin, Cargill’s director of communications in Wichita, said, “We were not looking to sell the business, but JBS approached us with an offer that we had to consider. Taking into account in terms of size where the businesses are, and also the focus of both companies, [the acquisition] made sense.”

Martin told Meatingplace that the sale of the pork operations does not affect Cargill’s remaining beef, chicken and turkey operations, in the U.S. or elsewhere. “We still have a sizable animal protein portfolio and are continuously looking for opportunities to enhance that portfolio,” he said.

More than 5,000 Cargill employees are expected to move to JBS with the pork operations; 4,500 of them work at the two large processing facilities in Iowa and Illinois that are part of the acquisition. Cargill bought those plants in 1987, Martin said. Cargill had been in the pork business since 1971, but only on the production side, raising hogs for other processors.

JBS has been on an acquisition binge, buying Marfrig Global Foods' British poultry and processed foods company Moy Park for $1.5 billion, just 10 days ago.

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