(Bloomberg) -- South American beef suppliers stand to benefit if Donald Trump’s promises for US tariffs against China end up resulting in a major trade dispute between the nations.
That’s according to executives at Minerva SA, the largest supplier of South American beef. The company’s Chief Executive Officer Fernando Galletti de Queiroz and Chief Financial Officer Edison Ticle said on a call with journalists that the region will be a “natural” supplier to both the US and China.
“An increase in tension between these two countries ends up generating geopolitical benefits precisely for those that are considered neutral countries — as most Latin American countries are,” Ticle said.
During Trump’s previous term as US president, a tit-for-tat tariff battle with China ended up hurting demand for American exports of agricultural products. At the time, Brazil strengthened its economic relationship with the Asian nation and now continues to be a major source for imports of food commodities.
Meanwhile, US domestic beef supplies have been shrinking as the country’s smallest cattle herd in seven decades increased the need for imports. South America will be a likely source for those shipments as well, the Minerva executives said.
“We can continue to supply both countries with what they need,” Ticle said.
The US and China are key customers for Minerva, each accounting for about 15% of the company’s shipments in the third quarter.
On Wednesday, the company reported earnings before items such as taxes and interests in the three months ended on Sept. 30 were 813 million reais ($143 million), beating analysts estimates. The figure was boosted by stronger exports and steady domestic demand, which more than offset increasing cattle costs in Brazil.
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