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Diving overview:
- About 3,800 JBS meatpacking workers went on strike Monday, slowing production at one of the country’s largest beef plants at a time when prices are at record highs.
- Union members said they were unable to reach an agreement with the world’s largest meatpacking company for higher wages. Employees also want JBS to stop charging them for the protective equipment they need to do their jobs.
- In a statement to Food Dive, JBS said it supported the offer presented to employees and called the deal “competitive.” The company said it is moving manufacturing capacity to another processing facility to minimize disruption.
Dive Insights:
JBS’ work stoppage comes as U.S. beef prices hit record highs. According to the Wall Street Journal, the company’s plant in Greeley can process up to 6,000 cattle per day, equivalent to about 7% of total U.S. beef processing capacity.
Kim Cordova, president of UFCW Local 7, the union representing the workers, said wages have not kept pace with inflation in Colorado, which has a higher cost of living compared to other states.
“JBS can afford to do better,” Cordova said.
The impact of the work stoppage on consumer beef prices is unclear, but it is unlikely that consumer costs will rise any further. Many beef packers are dealing with excessive processing capacity amid a severe cattle shortage that is driving up livestock prices. Companies including Tyson and Cargill have closed facilities while reporting losses in their beef operations.
Despite record sales in its beef division last quarter, JBS suffered a 50% drop in gross profit due to rising livestock prices.
JBS said in a statement that the company is “running the facility as best we can this week” and will continue to pay workers who report to the Greeley facility. The meat processor noted that many of its employees had decided not to participate in the strike.
“We will continue to expand our operations this week as more team members return,” a JBS spokesperson said. “Our focus is to support our workforce, secure the future of our facilities and continue to serve our customers and communities without disruption.”
ADM’s investor note said the prospect of a slowdown at the JBS plant “worries traders” and said the closure “could lead to back-ups and constrain beef supplies.” The report noted that President Donald Trump could intervene to prevent a strike using the Defense Production Act, which was last used to keep meat plants producing during the COVID-19 pandemic.
