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Diving overview:
Dive Insights:
Rising beef prices are forcing meat companies to diversify their portfolios and find other ways to satisfy Americans’ protein needs.
Last January, JBS acquired a 50% stake in Mantiqueira Brasil, one of the largest egg producers in South America, to compete in the U.S. market. The deal follows JBS’ efforts to expand into the seafood and alternative protein markets.
Egg producers have made significant profits over the past few years due to high prices and demand for protein. But as avian flu continues to ripple through the flock, larger companies with farms across the country have proven more resilient.
Hickman’s, a small producer whose farms are primarily concentrated in Arizona, laid off 85 employees in June after disclosing that it had lost nearly its entire flock of chickens to avian flu. According to AZ Family, about 6 million birds were lost and it was the first time in 81 years that the company had failed to fulfill an order.
“The trauma of having 6 million chickens down to none left in three weeks is more than what my family wants to do again,” Glenn Hickman, the company’s president and CEO, told local news station ABC15 on Monday.
Hickman told the station that his company would be a “launch pad” for JBS’ egg ambitions in the United States. The CEO hopes the meat giant can restore its flock and eventually expand its business.
Murilo Scarpa Pinto, president of Mantiqueira USA, said the deal provides a “strong foundation” for the company’s U.S. ambitions.
“Hickman’s heritage, quality and customer relationships, combined with global experience, resources and scale, provide us with the ability to deliver exceptional service and grow with purpose,” he said.
As cattle shortages and rising beef prices weigh on JBS’ profits, pressure to diversify its portfolio is growing. Last week, JBS Beef North America reported a 50% drop in gross profit due to increased production costs despite posting record sales.
