JBS spends $200M to expand US beef production

JBS USA is spending $200 million to expand beef production at two facilities as it prepares for an expansion in the supply of cattle.

The processor will spend $150 million to build a new production floor and expanded beef room at its plant in Cactus, Texas. It will also pay $50 million to construct a new distribution center in Greeley, Colorado.

Construction on the projects will begin this year. The beef giant said it will boost production capacity and add supply chain efficiencies.

JBS USA’s beef operations have faced pressure in recent years amid price fluctuations and livestock shortages. During its most recent earnings call in November, the company’s CFO Guilherme Cavalcanti said its North American cattle operations remain challenged. He pointed to the segment’s net revenue growing 6% year-over-year in the quarter due to higher demand for beef.

Still, margins for beef processors will remain under pressure in the short term as the herd expansion is not projected to begin until 2026 or 2027, according to a CoBank report. The cooperative bank said beef prices will remain “near historic highs” through 2025.

The price of beef and veal jumped 4.9% during the last year, the U.S. Bureau of Labor Statistics reported last month.