Current Cattle Markets Daily Headlines : Monday Morning May 4, 2020
Mackenzie Johnston
Newspapers and Laptop. Different Concepts for News - Network or Traditional Tabloid Journals. Data Sources - Electronic Screen of Computer or Paper Pages of Magazines, Internet or Papers
Meat Giants From Brazil Are Ready to Cover American Shortfalls
JBS has come forward saying that they have America covered when it comes to meat supply shortages after numerous processing plants have shutdown due to Covid-19.
The CFO of JBS claims that the company can increase exports from Australia and has idle capacity in Brazil for beef shipments to the US.
“Our geographic diversification has been a natural hedge for trade barriers and sanitary issues,” said CFO Guilherme Cavalcanti in a recent webinar.
Minerva, the largest South American beef exporter, is also ready to meet US needs from their eight plants in Brazil, Argentina, and Uruguay, according to their CFO, Edison Ticle.
Minerva’s sales to the US have been increasing since early April, when Covid-19 began to pose a threat to our domestic meat supply.
Last week, the CEO of Marfrig Global Foods, another Brazilian meat giant, said US demand for South American beef has strengthened since the onset of Covid-19. Marfrig ships beef to the US from three South American countries.
The United States reopened its doors to Brazil’s fresh beef back in February after a three-year suspension on the imports due to safety concerns. Brazil is allowed to export 60,000 metric tons a year to the US in a tariff-free import quota shared with other nations, according to Edison Ticle (Minerva’s CFO.)
Any shipments exceeding this quota are required to pay a 26% tariff, which is most likely still profitable due to current price differentials, claims Ticle.
JBS’ shares jumped 18% in April. Marfrig stocks climbed 42%. Minerva shares spiked by 50%.
The coronavirus pandemic has caused a major disruption in our nation’s food supply chain.
Those in agriculture have seen financial hardships pile up over the past few years; the US-China trade war, rampant floods that wiped out entire harvests, and poor commodity prices.
Wasted products;
Farmers in Washington are facing a surplus of one billion pounds of potatoes due to the restaurant and school closures, according to the Washington Potato Commission.
At least $5 billion worth of fresh fruits and vegetables have been wasted, according to estimates from the Produce Marketing Assoc.
John Tyson, chairman of Tyson Foods, has warned that plant closures due to the pandemic will result in the loss of millions of chickens, pigs, and cattle.
Dairy farmers are currently dumping out as many as 3.7 million gallons of milk every day, according to estimates from Dairy Farmers of America.
Cattle producers bring Ft. Pierre packing plant back online
Thirteen investors are bringing a meat-harvesting locker in Ft. Pierre back online this month.
“We saw it happen in the 80s with the pork industry where the large companies controlled the kill space and over 400,000 hog producers were wiped out. Now in the cattle industry, there are four packers that own over 85 percent of the kill space. Major corporations want producers to become employees and we can’t have that,” said Kim Ulmer, one of the investors.
The updated facility is called US Beef Producers and has investors from Minnesota, North Dakota, and South Dakota. The plant’s investors are all cattle producers, either feeders or ranchers.
US Beef Producers was able to secure a $100,000 loan at a low interest rate with the help of the Governor’s Office of Economic Development.
Understanding and meeting the regulations required for a locker has been the toughest challenge; the manual of requirements is 503 pages long, said Ulmer.
The locker has a goal of harvesting 35/hd per week by Aug. 1st.
