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Marfrig Global Foods resumed sales of fresh meat from Brazil to the United States, after the reopening of the North American market for the Brazilian product, with an intensification of demand amid the closure of slaughterhouses in that country due to the coronavirus, the director said. President of the company to Reuters, Miguel Gularte.
The North American market was reopened for the acquisition of fresh protein from Brazilians in February this year, after an interruption in exports that occurred in 2017 for health reasons, and the first shipments after a long period should occur this month. Gularte said.
According to the executive, an increase in US purchases was first identified in Marfrig’s units in Argentina and Uruguay.
“In the last 15 days this has been noticed in Brazil,” said the executive, without detailing the volumes.
With the reopening of the North American market to fresh meat from Brazil, the world’s largest exporter of the protein, the company already had a strategy to resume shipments to the US. But the demand for the Brazilian product intensified after the recent slaughterhouse closings in the US. USA, due to cases of coronavirus among employees.
“It is the combination of these two factors,” he stressed.
Marfrig saw how the unit of its subsidiary in the USA. The National Beef had suspended activity due to the coronavirus. A
Rival JBS USA also suffered the closure of a meat slaughterhouse, while other companies, such as Tyson Foods and JBS, closed pig factories due to Covid-19.
The National Beef plant, located in Iowa, came back online last week.
The Marfrig president said the Iowa unit, which has been closed since early March, is the smallest of the three company-maintained units in the country and, therefore, the impact on company operations was limited.
The total slaughter capacity of national meat units is 13,000 heads per day, and the plant that had its operations temporarily suspended slaughter of 1,100 heads per day.
Heated exports
After this strike, Gularte declared that, until now, there are no more suspension of planned activities.
In contrast, Marfrig’s operations in North America are in synergy with those in South America, which favors the meat trade between the two regions.
“We are experiencing operational synergy in practice, where we have a strong operation like National’s … and that’s a great competitive advantage.”
In this context, bovine protein is imported from South America to complement the supply of raw materials that will be processed to meet local demand.
“Brazilian, Uruguayan, and Argentine meats are used to complement a mix of American-made products … like hamburgers.”
In Brazil, exports represent 72% of Marfrig’s sales, while the domestic market has 28%. In Argentina, exports represent 78% of the company’s sales and, in Uruguay, 93%.
Sales above the market
Gularte said that during the first quarter of the year, Brazil grew 5% in meat exports, while Marfrig’s units in the country advanced 24% in sales to the foreign market, amid strong Chinese demand.
He also said that the countries of the Middle East are “buying normally”, while the European Union has greatly reduced its imports, since imported meat is consumed more in restaurants, which closed due to the pandemic.
In any case, it evaluates that “sales in the United States are likely to increase” in the short term, since in crisis situations the North American consumer tends to increase retail purchases to stock up on food.
As an example, after the coronavirus outbreak, Gularte said that sales of the protein have already grown by around 20% in the country’s trade.
Regarding demand in Brazil, he noted that meat consumption decreased by approximately 40% in March, and that 80% of this decrease occurred in the food service due to isolation measures against the spread of the coronavirus .
Shortage
Millions of pounds of beef, pork, and chicken will disappear from market shelves in the United States, as protein processing units have been closed due to outbreaks of coronavirus among employees, the president of Tyson Food said.
John Tyson warned that “the (US) food supply chain is breaking,” as an increasing number of plant closings have left producers with little choice to market and process animals.
To stop the spread of the virus, Tyson Foods announced last week the closure of two pork processing units, including the company’s largest in the United States, and a beef facility.
Other refrigerators, such as JBS USA and Smithfield Foods, have also closed processing units in recent weeks due to the increase in the number of Covid-19 cases among workers.
More than 5,000 employees of meat and food processing factories in the United States have already been infected or exposed to the virus, with 13 of them dead, the country’s largest industrial union said Thursday.
It is not clear when the plants can be reopened.
“Until we can reopen our facilities that are currently closed, there will be limited availability for our growers in the markets,” John Tyson said in a statement released Sunday.
“In addition to the meat shortage, there is a serious problem of food waste. Farmers across the country simply will not have a place to sell their animals for processing when they can feed the nation,” the executive added.
