JBS USA, a leading beef processor, recently announced a $200 million investment to expand beef production at two of its facilities in Texas and Colorado. This investment comes as the company prepares for an expansion in the supply of cattle and aims to boost production capacity and add supply chain efficiencies.
The processor will spend $150 million to build a new production floor and expanded beef room at its plant in Cactus, Texas. Additionally, it will invest $50 million to construct a new distribution center in Greeley, Colorado. Construction on these projects is set to begin this year.
JBS USA’s beef operations have faced challenges in recent years due to price fluctuations and livestock shortages. During its recent earnings call in November, the company’s CFO Guilherme Cavalcanti acknowledged the challenges faced by its North American cattle operations but highlighted a 6% year-over-year growth in net revenue in the quarter due to higher demand for beef.
Despite these challenges, the CoBank report predicts that beef prices will remain near historic highs through 2025, putting pressure on beef processors’ margins in the short term. The price of beef and veal has already seen a 4.9% increase over the last year, according to the U.S. Bureau of Labor Statistics.
Wesley Batista Filho, the CEO of JBS USA, expressed confidence in the investment, stating that now is the time to invest in the United States and that the company is excited about the future. He emphasized JBS’s commitment to the U.S. beef industry, American farmers, and ranchers, stating that ongoing investments in facilities are essential for future success.
The Texas facility currently employs 3,700 workers and pays $2.9 billion for livestock annually, while the Colorado plant has more than 3,800 employees and spends $3.1 billion on livestock each year. JBS SA, the parent company of JBS USA, has been pursuing a listing on the New York Stock Exchange for several years, facing opposition from environmental and corporate governance groups.
Overall, JBS USA’s $200 million investment in beef production reflects its commitment to the U.S. beef industry, American farmers, and future growth opportunities in the market.
