The world’s largest beef processor, JBS, has revealed a 20.8% growth in revenue to BRL90.9bn (€17.5bn) in the first quarter of 2022 with an adjusted EBITDA of BRL10.1bn (€1.9bn), a 46.7% increase on the same period last year.

Net income of BRL 5.1bn was a massive 151% higher than the first quarter of 2021.

Beef processing in the US is the largest segment of the business with revenue of BRL29bn (€5.6bn) in the first quarter of 2022, a 21.7% increase compared with the same period last year. Adjusted EBITDA was BRL 4.1bn (€788m), a 55.7% increase.

US beef

The USDA price for cattle in the US shows an increase from the equivalent of €3.61/kg this time last year to the equivalent of €4.88/kg at present.

Strengthening of the US dollar value compared to the euro partially explains this increase but even with present exchange rates the US price is 88c/kg better than a year ago.

The domestic market in the US has remained robust alongside record increases in export volumes and values. China has spearheaded this expansion, growing to 62,237t for the first quarter of 2022, a 36% increase on the same period last year.

Production in the US is running ahead of last year, driven in part by an increased cow cull caused by drought.

USDA is forecasting that this will cause a reduction in cattle supplies for slaughter in 2023 with volume forecast to decrease by 7%.

Food price inflation is also increasing in the US with the cost of food consumed at home increasing by 10.8% in the year to April 2022. (Source: US bureau of labour Statistics).

Within this category, beef and veal were 14.1% higher, reflecting the fact that the meat processing industry were successfully passing on the cost of higher cattle prices to their customers as well as increasing export business.

Relevance for Irish farmers

Irish farmers don’t have the same insight to the performance of the beef processing industry as suppliers of JBS but it is reasonable to conclude that with Irish prices slow to catch up what is being paid in the rest of Europe, they will be profitable as well.

There has now been a year of steady price increases and tightness of cattle supply has pushed farmgate prices on again in recent weeks.

Of course the cost of producing beef on Irish farms has increased dramatically as fertiliser and diesel costs in particular have surged.