The availability of cattle to process into beef is seen bottoming out sometime between 2025 and 2026.
The US cattle herd should keep shrinking for at least another couple of years, putting additional pressure on profits of meatpacking companies, according to Brazilian processor Marfrig Global Foods SA.
The availability of fattened animals for meat companies to kill and process into beef is seen bottoming out sometime between 2025 and 2026 as ranchers have yet to begin the process of retaining cows for breeding, Tim Klein, the head of Marfrig’s North American operation, said during a conference call.
National Beef Inc., Marfrig’s US unit, saw adjusted earnings before items such as taxes and interest more than halve in the third quarter from a year ago to $150 million, according to a statement from the company on Monday. Tyson Foods Inc. and JBS SA posted results earlier that were largely affected by lower profits in their US beef operations.
Tighter cattle supplies means ranchers will have leverage over meatpacking companies, while strong demand for beef should allow for National Beef to weather the adverse cycle, Klein said.