WITH global beef trade next year shaping up to be one of the most complex cycles on record, it was no surprise to see the JBS Global management team being probed deeply during the protein giant’s quarterly analysts briefing held last week.

Analysts 1uestions and answers ran to 25 pages in length following the recent release of the company’s third quarter financials for the 13-weeks ended 30 September. That’s the longest session we can recollect, at least since the COVID era.

Set out below are some of the key questions and topics analysts asked about, around US, Brazilian and Australian beef production and export prospects for next year. Note that the analysts’ briefing took place prior to Friday’s announcements around Brazilian tariffs into the US:

• Challenging US cattle cycle continues
• Will high beef prices hamper demand, pushing consumers to white meats?
• Will high Australian cattle prices limit processing margins in Australian operations?
• US herd rebuild next year – will margins get even tighter?
• Will forecast decline in 2026 production in Brazil have impact?
• Brazil’s investment explosion in lotfeeding – How will it impact the country’s carcase quality, carcase weight and productivity performance?

Challenging cattle cycle, Australia a highlight

JBS global chief executive officer Gilberto Tomazoni told the briefing his company continued to navigate a challenging cattle cycle in the United States, marked by historically high prices and tight supply.

Even in this environment, JBS’s North American beef division delivered record net revenue, supported by resilient US domestic consumer demand, he said. While US cattle availability remained heavily constrained, US beef consumption had held steady.

Although US cutout values (processor returns) remained elevated, they were not sufficient to offset higher cattle costs, Mr Tomazoni told analysts.

Australia was a clear highlight in the September quarter results. Profitability stayed strong, supported by improved cattle availability and healthy global demand.

“The region continues to play an important role in diversifying our geographic exposure and balancing results across proteins,” he said.

Global protein demand continues to rise, he said, and JBS was prepared to capture this growth with a balanced portfolio, solid execution, and a long-term perspective.

“We continue to invest in innovation and value-added products as part of our long-term strategy,” he said. Strengthening brands and expanding higher-margin categories remain central to sustainable growth.”

Here’s a summary of analysts’ questions and JBS management responses:

Challenging US cattle cycle continues

Analyst Heather Jones asked about the the volatility seen in the US cattle futures curve recently, and whether this may affect JBS’s Q4 results in the US.

JBS US beef division head Wesley Batista said this was likely, specifically, for the company’s beef business in the US.

“When you have futures being as volatile as they are, it creates instability in results. So, it could impact us. On the other hand, it’s showing a decrease in cattle costs. So it could help a little, also.

“Cutout is suffering a little in recent weeks, but when you’re have instability like that in the futures, it’s always a challenge because it could create losses for us with our hedging position,” Mr Batista said.

But overall, on top of futures being more volatile, margins have been tighter in the fourth quarter (ending 31 December) so far.”

Will high beef prices hamper demand, pushing consumers to white meats?

BTG analyst Thiago Duarte asked how JBS saw those trends unfolding going forward. (Again: note the question was asked before Trump’s 40pc tariff removal on Brazil beef in Friday). “Should we think more about beef demand at some point cooling off because of high prices and hampering further price hikes Or do you believe that this high beef prices will continue to offer support for other proteins (pork, chicken) to continue to rise and catch up with beef?” the analyst asked.

Wesley Batista made several points around US beef prices versus pork and chicken.

“Just based on supply and demand, beef prices are going to be at the sort of levels that they are as long as supply is tight,” he said. “When supply increases, you’re probably going to see these prices falling and the market adjusting to a more normal level. This is just what we should expect, and it’s what has happened in the past.”

“So having said that, I think it’s a big testament to the demand of beef to see even entry level US beef items, like ground beef, being at the price levels where they are, and there’s still strong demand for it. So it’s just a big testament for the quality of the product and just the structural demand that there is for all those products.”

“As beef prices relate to pork and chicken, again, there is some, obviously, substitution between the three proteins, due to beef shortage. And obviously, when beef is expensive, the pork and chicken are good options for somebody who’s trying to find a more affordable option.

“So it kind of drives a little bit of demand for pork and chicken. And obviously, as long as we have tight beef supplies, we’re going to see higher demand for other proteins as well.  And that’s what we’ve been seeing.”

Is it going to be a lot more than what it is? I don’t know. It depends a lot on beef supplies. I think we’re getting very close here to the bottom of the trough of this US cattle supply shortage. But if we have more supply of cattle, we should see beef price falling and that coming back to a normal level. If not, then obviously chicken and pork is a big option for a more affordable protein solution.”

Will high Australian cattle prices limit processing margins in Australian operations?

Itaú analyst Gustavo Troyano asked about higher cattle prices in Australia last quarter, and the reasons why Australian processing margins remained quite resilient and what to expect for the current fourth quarter.

Gilberto Tomazoni said JBS Australia (dominated by beef processing, but also including lamb, pork, aquaculture and value-added smallgoods) was performing very well.

“I know that the price of live cattle increased, but global demand for beef from Australia is very strong. We export 75pc of what we produce in Australia, and our operation there has strong focus on export.

The global demand was strong for product from Brazil and Australia, for three reasons, Mr Tomazoni said: Rising levels of income in developing countries, this trend of the new generation wanting to eat more protein, and because of the adoption of weightloss drugs where protein becomes more important.

“For the next year, we are very confident about our business in Australia. The availability of cattle is good, we are now performing more than 20pc of margin in the business there.  So we are bullish in our Australian business. And I think next year we are seeing a stronger result from Australia as well.”

US herd rebuild next year – will margins get even tighter?

Analyst Ben Theurer from Barclays asked: “On the US beef side, there’s obviously still a lot of, constraints, but what are you’re seeing in terms of rebuilding of the US herd? Do you think the challenge may be an even tighter market in 2026, if there’s going to be some heifer retentions?

Wesley Batista said JBS saw some heifer retention happening in the US next year.

“This quarter USDA numbers showed the US cow slaughter at 545,000 head. In the equivalent third quarter in  2022, that number was 973,000, so we’re almost half of the cow kill of a few years ago.

“It’s a very important number in my opinion. And we’re seeing that it is happening. So we think 2026 will still be a challenging year from a US cattle supply perspective and then probably, from there, it starts getting gradually better.”

“It’s not going to get better overnight, but it’s going to be a gradual improvement from 2027 forward,” Mr Batista said.

Will forecast decline in 2026 beef production in Brazil have impact?

Bank of Montreal analyst Ben Mayhew asked about how Brazilian and Australian cattle and beef supply would offset low US production next year, with Brazil’s cattle supply forecast to get tighter. He asked whether that meant if Australia was ‘more of a hedge’ against the pressures being seen in the US.

Mr Tomazoni said in both Brazil and Australia, the increase in meat price (cutout) more than compensated for the increase in the price of the live cattle.

“We see strong demand from Australia. We sold out our third quarter volume in Australia,” he said.

“We are not seeing that this will be an impact. Next year for Australia will be a strong year.  In Brazil, yes, Brazil, there is some reduction in the cattle herd and the availability of cattle – but the reduction isn’t considered significant. Brazil will see a strong market next year as well.”

Wesley Batista added that as the US currently exports a lot less beef due to herd impact –  especially to Asian countries and other North American countries – it was a direct correlation with Australia and Brazil exporting stronger volumes.

“As we need more domestic beef in the US, we keep more locally-produced US beef in the US, exporting less, Automatically, that’s going to see an advantage to our businesses in Australia and Brazil. And that’s a very important correlation that helps minimise the impact of the beef cycle in the US,” Mr Batista said.

Brazil’s explosion in lotfeeding investment – How will it impact the country’s carcase quality, carcase weight and productivity performance?

Mizuho analyst John Baumgartner asked about the structural changes happening in Brazilian beef production, and how this might impact export opportunities.

“I’m curious about opportunities to diversify Brazilian exports across Asia, Korea, Japan, maybe some opportunities to supply more into Mexico. How do you think about new export opportunities for Brazil that are longer lasting? he asked.

Mr Tomazoni said Brazil in the last two years, had opened more than 100 new export markets.

“Strong export demand will remain next year, and will more than compensate for the increase in Brazilian livestock prices,” he said, “and the domestic Brazilian meat market is remaining strong as well.”

He said from information JBS had the availability of cattle in Brazil next year might be down less than 3-5pc.

“But there’s still a lot of cattle available in the market,” Mr Tomazoni said.

“If you go back to 2023, the Brazilian herd now is much, much larger than that time. Even though we have some reduction now, we are reducing from a high level, but cattle remain much more available than before.”

Growth in Brazlian lotfeeding

The second point Mr Tomazoni made was the incredible rate of growth being seen in lotfeeding in Brazil, happening because of the booming ethanol production industry using corn, producing vast quantities of dried distillers’ grains to add to feedlot cattle diets.

“With the combination of the improvement in genetics and the improvement in diet, we see that the age of Brazilian slaughter cattle is getting younger, carcases are heavier and the yield of Brazilian beef has increased,” he said.

“This is another point that we need to put in consideration. Because of that we improve the quality of the product that goes to be harvested.

“And because of that, we are so excited about the Brazilian market, because if you compare the Brazilian to the US herds, US has less than a half the number of Brazilian cattle, yet produces more beef. The opportunity for Brazil to grow its beef market is huge – in terms of genetics, in terms of diet, in terms of management of the land.”