Brazilian beef processor Minerva Foods is working to boost exports to the United States and drive sales to food service and retail clients amidst a drop in the U.S. meat supply, Chief Financial Officer Edison Ticle told Meatingplace.
“We are very ready to supply the U.S. market,” he said. “The U.S. is a premium market paying attractive prices and this could be a good opportunity to boost our beef exports.”
Minerva Foods, which is responsible for 20 percent of fresh beef exported from South America, has only 3% of its export revenue coming from sales to the U.S.
The company has eight beef processing plants authorized to export to the U.S. — four in Brazil, three in Uruguay and one in Argentina.
Brazil was just recently approved to resume fresh beef exports to the U.S. in February, and Minerva’s units in Uruguay and Argentina had mostly focused on serving China, which had been offering higher prices.
“But due to the current scenario in the U.S. with the reduction in meat supply, we expect a price increase which will likely make it more attractive to sell to the U.S.,” Ticle said.
Minerva has 68% of its revenue coming from export markets, with the remaining 32% from domestic markets where it operates in South America — Brazil, Colombia, Paraguay, Uruguay, Chile and Argentina.
Ticle said Minerva wants to increase its export share of revenue, due to expectations that domestic South American markets will take longer to recover from the crisis unleashed by the COVID-19 pandemic than China, U.S. and countries in Europe.
Minerva posted a net profit of BRL271 million (US$49.4 million) for the first quarter of 2020, reverting a net loss in the same period a year ago, driven by strong export demand and higher prices. Net revenue rose 11.8% to BRL4.2 billion (US$760 million).
Minerva’s overall pace of beef processing has slowed due to the adoption of preventive measures to avoid the spread of coronavirus in its facilities, such as social distancing and removing employees at higher risk of contracting the disease.
Ticle said he’s confident the pandemic won’t hamper Minerva’s ability to boost exports to the U.S., China and other Asian markets.
Minerva started to adopt preventive measures to avoid COVID-19 at its facilities in March, before the number of cases in South America started soaring, and is preparing to test all of its employees for the disease.
Potential coronavirus cases among employees shouldn’t have a major impact on the company’s capacity to supply demand, Ticle added, since South American beef production is spread out among smaller facilities.
“We have 24 beef processing plants in South America with great geographic diversification,” he said. “If we have a problem in one facility, we can shift production and more than compensate.”