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    JBSS3   BRJBSSACNOR8

JBS S.A.

(JBSS3)
  Report
End-of-day quote. End-of-day quote Bolsa de Valores de Sao Paulo - 07/28
31.92 BRL   +1.53%
07/20JBS Bids to Hook Huon Aquaculture
CI
07/13JBS S A : Relatório de Sustentabilidade 2020
PU
07/09JBS S A : U.S. pledges $500 million to increase meat processing capacity
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Explainer: How four big companies control the U.S. beef industry

06/17/2021 | 01:12pm EDT
FILE PHOTO: Security wear face mask at the JBS USA meat packing plant in Greeley

CHICAGO (Reuters) - U.S. lawmakers are seeking increased oversight of the beef sector as concerns about anticompetitive behavior increase after the pandemic and a cyberattack on a major meat company, JBS USA.

Agriculture officials are meanwhile pushing for more processing capacity and ranchers are opening new slaughterhouses after plant shutdowns highlighted the industry's reliance on large facilities run by four main processors.

HOW CONCENTRATED IS THE U.S. BEEF SECTOR?

Four companies slaughtered about 85% of U.S. grain-fattened cattle that are made into steaks, beef roasts and other cuts of meat for consumers in 2018, according to the most recent data from the U.S. Department of Agriculture (USDA).

When factoring in other cows used to make hamburger meat, the companies comprise about 70% of total U.S. beef production, according to the North American Meat Institute, an industry group.

WHICH COMPANIES CONTROL THE SECTOR?

The big four processors in the U.S. beef sector are: Cargill, a global commodity trader based in Minnesota; Tyson Foods Inc, the chicken producer that is the biggest U.S. meat company by sales; Brazil-based JBS SA, the world's biggest meatpacker; and National Beef Packing Co, which is controlled by Brazilian beef producer Marfrig Global Foods SA.

WHEN DID THE COMPANIES GAIN CONTROL OF THE SECTOR?

The amount of cattle slaughtered by the four firms rose from 25% in 1977 to 71% in 1992, according to USDA data. A shift toward larger processing plants led to sharply increased concentration in cattle slaughtering, the USDA said in a 2000 report.

WHY DID PLANTS GET BIGGER?

Meatpackers are able to lower the cost of processing each animal by running bigger operations instead of smaller facilities.

In 1977, 84% of U.S. steers and heifers were slaughtered in plants that killed fewer than half a million cattle a year, according to the USDA. By 1997, plants in that category saw their share drop to 20%.

WHAT BROUGHT ATTENTION TO CONSOLIDATION?

Three separate events in 2019, 2020 and 2021 highlighted the country's reliance on large beef plants run by the four biggest processors.

First, a large Tyson Foods plant in Holcomb, Kansas, closed for four months following a fire on Aug. 9, 2019, that reduced U.S. beef production and removed a market where farmers could sell their cattle.

The second disruption occurred as COVID-19 spread last year, causing slaughterhouses nationwide to close to contain outbreaks of the virus among workers.

On May 30, 2021, JBS detected a ransomware attack on its systems that temporarily closed all its U.S. beef plants.

WHAT ARE CATTLE RANCHERS WORRIED ABOUT?

Ranchers are frustrated that cattle prices drop when major plants close, while meat companies still benefit from rising meat prices. After the Tyson plant fire and the start of the pandemic, the difference between prices for cattle and beef rose to record levels, according to the USDA.

Plant shutdowns remove markets for ranchers to sell their animals and tighten meat supplies by reducing production. Ranchers say there is too little competition among beef processors to buy cattle.

WHAT IS BEING PROPOSED?

Lawmakers have proposed legislation to create an office for a special investigator within USDA to address concerns about anticompetitive practices in the meat and poultry industries.

USDA has said it plans to strengthen enforcement of a 100-year-old federal act intended to protect farmers and ranchers from unfair trade practices. The agency pledged to support increased processing capacity as part of a $4 billion initiative to strengthen the country's food system.

A group of U.S. governors is pushing the Justice Department to continue an investigation into anti-competitive practices in the meatpacking industry.

The North American Meat Institute, which represents meatpackers, said processors and ranchers "benefit from a fair and competitive market."

(Reporting by Tom Polansek in Chicago; Editing by Caroline Stauffer Matthew Lewis)


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
JBS S.A. 1.53% 31.92 End-of-day quote.34.91%
MARFRIG GLOBAL FOODS S.A. 0.15% 20.07 End-of-day quote.38.32%
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Financials
Sales 2021 308 B 60 908 M 60 908 M
Net income 2021 11 070 M 2 192 M 2 192 M
Net Debt 2021 44 490 M 8 808 M 8 808 M
P/E ratio 2021 7,30x
Yield 2021 2,31%
Capitalization 79 562 M 15 750 M 15 750 M
EV / Sales 2021 0,40x
EV / Sales 2022 0,39x
Nbr of Employees 250 000
Free-Float 31,8%
Chart JBS S.A.
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JBS S.A. Technical Analysis Chart | JBSS3 | BRJBSSACNOR8 | MarketScreener
Technical analysis trends JBS S.A.
Short TermMid-TermLong Term
TrendsBullishNeutralBullish
Income Statement Evolution
Consensus
Sell
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Mean consensus BUY
Number of Analysts 13
Last Close Price 31,92 BRL
Average target price 41,62 BRL
Spread / Average Target 30,4%
EPS Revisions
Managers and Directors
Gilberto Tomazoni Chief Executive & Operating Officer
Guilherme Perboyre Cavalcanti Chief Financial Officer
Jeremiah Alphonsus O'Callaghan Chairman
Eliseo Santiago Perez Fernandez Director-Administration & Control
Cledorvino Belini Independent Director
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