JBS Shutters Beef Plants as 16% Surge in Wholesale Beef Prices Hits Margins
JBS has reported four straight quarterly losses in its beef unit as shrinking US cattle herd drove average wholesale choice beef values up 16% year-over-year. The company plans to shutter multiple beef plants and trim processing capacity to match historically low cattle supplies.
1. Beef Unit Financial Performance
JBS’s beef division has recorded consecutive quarterly losses since early 2024, with escalating cattle procurement costs squeezing profit margins despite elevated wholesale prices.
2. Cattle Supply Constraints
The US cattle herd is at its smallest since the early 1950s, driving wholesale choice beef values up 16% year-over-year and prompting retail price hikes exceeding 15%.
3. Plant Closures and Capacity Adjustments
To realign operations with limited cattle availability, JBS has announced closures of several beef processing plants and will reduce overall capacity at remaining facilities.
4. Outlook and Timeline
Industry analysts warn that rebuilding the herd to adequate levels could extend until 2028, suggesting prolonged supply tightness and continued margin pressure for JBS’s beef business.