Management from the meat supplier, JBS SA told analysts that the outlook for beef in the US is “not going to improve soon” according to Reuters.
Management has stated that this is likely to leave beef processors with unused capacity in the US.
Global president of operations, Wesley Mendonca Batista Filho said that there “is no doubt” cattle supplies will “remain tight” in 2024.
The number of beef cows in the US at the start of this year was the lowest since 1962 at 28.91 million, according to a report by the US Department of Agriculture (USDA) National Agricultural Statistics Service (NASS).
US analysts have said that meat processors like Tyson Foods and Cargill will pay elevated prices for cattle until producers start rebuilding the herd.
The figures reflected the smallest herd for that date since the government began keeping the records 52 years ago, and reflected a fifth year of declining beef cow numbers.
JBS also reported a second-quarter loss this week, related to the cattle supply shortage on its main market, but also the negative effects of a global chicken glut.
Chicken businesses are forecasted to recover quicker than beef.
Chief executive officer (CEO) of JBS, Gilberto Tomazoni said companies are gradually adjusting chicken supplies in the US and Europe, improving pricing prospects.
According to Reuters, Tomazoni said prices had already begun to rise on chicken meat sales to Gulf countries, “in a very clear sign of change”.
JBS shares rose 3.66% in mid-morning trading as some investors perceived results as better than feared.
The company overall forecasts gain of $450 million this year related to lower grain prices, particularly corn, higher than guidance of $340 million given at the end of the first quarter.