MercoPress. South Atlantic News Agency

Brazilian company en route to be US main meat processor

The United States Justice Department said on Monday it will allow Brazil's JBS to buy the beef operations of Smithfield Foods Inc for 565 million US dollars which, based on industry estimates, would make JBS the second US beef producer.

However the Justice Department blocked JBS' attempted 560 million USD purchase of number four US beef producer National Beef Packing Co, saying that deal would give JBS too much control and lead to lower cattle prices for producers and higher beef prices for consumers. US regulators say the deal would mean three companies would control more than 80% of the US fed cattle packing capacity, or the amount of cattle that are processed into beef products. In 2007 packers bought more than 27 million fed cattle for nearly 30 billion US dollars. The three companies would be JBS S.A. from Brazil which is the world's largest beef packer. After the merger, its share of US packing capacity would increase from 20 to 35%. Tyson Foods Inc, based in Springdale, Arkansas has a beef packing capacity between 25 and 30%. Finally there is Cargill Inc., based in Wayazata, Minnesota with a packing share of 20 to 25%. Nevertheless JBS and National have said they will fight to get the Justice Department to approve the purchase, which would allow JBS to eclipse Tyson as the largest US beef producer. Smithfield, the largest US hog and pork producer, got into the beef business in 2001 when it bought Packerland Holdings and Moyer Packing Company. It also had expressed interest in buying the Swift & Co. beef plants before they were sold in 2007 to JBS. In 2005, Smithfield became part owner of Five Rivers Ranch Cattle Feeding, the largest US cattle feeding operation. The feedlots, which have a combined one-time capacity of 800,000 cattle, also will go to JBS. JBS SA is a Brazil-based involved in the food processing sector. It is engaged in the manufacture and export of meat products. The Company has industrial units in the states of Sao Paulo, Goias, Mato Grosso, Mato Grosso do Sul, Rondonia, Minas Gerais, Acre, Rio de Janeiro and Parana. JBS SA also has various industrial units in Argentina, Uruguay, United States and Australia. Its product line includes corned beef, sausages, canned vegetables and beef cuts. The Company has various subsidiaries, such as JBS Embalagens Metalicas Ltda, JBS Global Investments SA, JBS Holding Internacional SA, JBS USA Inc and JBS Confinamento Ltda. The Company's brand portfolio includes Friboi, Maturatta, Swift and Anglo. In addition, JBS SA operates one beef canning plant, five slaughter plants, four distribution centers and one vegetable canning plant.