JBS SA is set to post the highest quarterly profit since 2008, thanks to its grass-fed beef. Brazilian meatpackers are shielded from increasing grain and cattle prices that have cut the margins of other processors, reports Bloomberg News.
Third-quarter net income will be 331.8 million reais ($164 million), compared with a year-earlier loss of 67.5 million, according to the average of four analyst estimates compiled by Bloomberg. JBS’s 19 percent return in the past three months makes it the world’s third-best performing meatpacking stock, after Barretos, Brazil-based Minerva SA and Marfrig Alimentos SA, which gained 44 percent and 38 percent, respectively.
“Brazil is in a sweet spot for the next 18 months,” Eric Conrads, who helps manage $1 billion in stocks at ING Groep NV in New York, said by telephone. “Brazilian cattle are grass-fed so you don’t care about corn.”
Corn and soybean prices reached records since mid-June amid the U.S. drought. Corn rose to $8.38 a bushel on Aug. 21 from $5.05 on May 11, while soy touched $17.68 a bushel on Sept. 4 from as low as $12.58 on June 1.
Source: Bloomberg News