(Bloomberg) -- The US is set to become the largest export customer of Minerva SA, the leading South American beef supplier, eclipsing China.
The shift is expected to take place within six months, according to a person familiar with the matter. Minerva’s purchase of several Marfrig Global Foods SA assets and the US’s smallest herd in seven decades are propelling sales, said the person, who was not authorized to discuss the matter publicly.
Growing shipments to the US underscore how the world’s largest meat producer is increasingly dependent on beef imports, pushing some Brazilian meatpackers to focus on the new market as Chinese demand slows.
A Minerva representative declined to comment.
American ranchers have for years been culling more cows than they were retaining for breeding because of persistent droughts, high feed costs and elevated interest rates. That created a shortage of slaughter-weight animals for meat production, leading to a surge in beef imports including from Brazil, where supplies have been more abundant, and productions costs are cheaper.
US beef imports from Brazil increased 58% from January to September compared with the same period last year, according to data from Brazil’s Ministry of Agriculture, while China’s imports rose by 9%. In addition, the US on average paid 33% more for its Brazilian beef than China paid, according to the data.
China currently makes up 21% of Minerva’s beef exports compared with 19% for the US, and the American share is expected to surpass the Asian nation’s within half a year as Minerva takes over Marfrig’s assets, the person said.
Minerva bought a distribution center and 13 plants in Brazil, Argentina and Chile from Marfrig in a deal that closed on Monday. Most of the plants are approved to ship to the US, said the person. Minerva said Wednesday it intends to file an appeal on the Uruguayan antitrust authority’s decision that rejected its acquisition of three Marfrig plants there.
©2024 Bloomberg L.P.