LOWER demand and price for cattle hides has been one of the immediate impacts from recent tariff changes between the US and China, global meat processing giant JBS told analysts during a first quarter financial briefing last week.

In one of the longest Q&A sessions hosted by the company’s senior management in recent times, analysts probed JBS over its upcoming proposed dual listing on the NYSX, the impact of recent tariff changes, the health of the company’s US and Australian beef businesses, US consumer spending and other topics.

Beef Central wrote about recent sharp declines in Australian hides values earlier this week. While tariffs do not apply on Australian hides sold to China, once they are processed into leather, China is now exposed to 45pc tariffs for its leather exports into the US, its largest customer. That has directly impacted hides values in this country.

Barclays analyst Ben Theurer asked about the health of JBS’s beef business in the US and export headwinds, particularly in the second quarter ending 30 June.

JBS US beef division head Wesley Batista said 2025 was a much more difficult year for US beef operations than 2024, from a margin perspective.

“We are seeing some signs of US herd rebuild (through) much lower rates of female slaughter among non-fed animals – down about 14pc versus the same time last year, which in turn was down on the year before,” Mr Batista said.

“We continue to see that, and its encouraging, in terms of herd rebuild prospects. It’s not as fast as we would like, and it’s not as intense as we would like, but still, they are positive signs for US herd rebuild,” he said. “We still expect that 2026 will be a better year than 2025, but probably not 100pc (in terms of recovery).”

Tariffs and trade disruption

For JBS’s US beef business, recent tariff changes was costing the business, from a margin perspective, about 1pc to 1.5pc, Mr Batista estimated.

“A lot of that is coming from our by-products. A lot of hides go to China and get processed there – it is a very important market for hides. That’s kind of gone away.”

Referring to the 90-day tariff truce called by President Trump, Mr Batista said it was probably only going to impact half of the current quarter.

“With all that, we’re seeing that 2025 will be a challenging year for the US business. The second quarter will be very challenging compared to same time last year. But even though the US beef business continues to be challenged, we’re going to be able to continue to show relatively stable margins given the (geographic and species) diversification of the business.

“As the US has these challenges, we’re seeing positives in other geographies and in other proteins. We continue to be very confident, and actually, we think that this whole diversification advantage (that JBS has) is going to be clearer than ever.”

Another analyst asked whether the tariff impact was limited to hides, or whether it also extended into red meat.

Mr Batista said it was important to understand that US tarde into China was currently impact by two factors.

“One of them was the high tariffs that China and the US put against each other. So that had one impact, but the second one was beef access to China for US exporters,” he said.

“Today, basically most US beef plants are not approved to export to China (due to China’s delays in re-registering lapsed facilities). The first issue obviously got improved with the deal between the US and China to lower tariffs. That’s obviously had an immediate impact on the market, but for beef, its different, because of those plant approval delays.

“So on the beef side, the larger part of the tariff impact is hides, because a lot of that went to China and it represented a very large share of the total export of hides. So that made it more difficult to maneuver into other markets.

“But beef is not the same as hides. For beef, we have other markets that we can continue to export to, and have the appropriate destination for that product.

“But whenever we have the tariffs coming back to a lower level, the effect is usually pretty immediate. But on the beef side, its going to take longer, because we have to regain our registration approvals to China.”

US consumers

Another analyst asked what the company was seeing with US consumer behaviour and retail trends for red meat, as the northern hemisphere heads into summer grilling season.

Mr Batista said overall, there remained strong demand among US consumers for all three proteins produced by JBS in North America – beef, chicken and pork.

“When it comes to beef – yes, we are seeing lower rates of processing of fed cattle, but we also have much higher carcase weights – up more than 3pc this year,” he said. “So overall, it’s not like we have a lot less beef: we actually have a little bit more beef to sell when it comes to fed-beef (steers and heifers going through feedlot programs).”

“And still with that, we’re having a 9pc higher valuation of our cutout year over year in the first quarter. So this means to us, very clearly, that it’s demand-driven and US demand is strong – and we see that across the three proteins.”

US shift from food service to retail

Overall, JBS was seeing a trend where US consumers were moving from food service to retail in their meat-eating habits, analysts were told.

“This is something we’ve been talking for a while,” Mr Batista said. “But I don’t see that this is necessarily because the retail is doing some sort of aggressive features – it’s not as specific as that. I think it’s just a trend where people are seeing better value by getting a good meal at home versus eating out, and that’s more to do with that than any specific future activities.”

Strong Australian performance

Asked to comment on JBS’s strong Australian division performance last quarter, and whether Australia had also been impacted by tariff actions global CEO Gilberto Tomazoni said Australia had had some weather challenges last quarter, and the quarter before that “because of the weather, too much rain and the challenge in getting cattle to the processing plant.”

“All of those problems weren’t solved last quarter, because in the south of Australia it remains very dry.”

‘But the good feature about Australia is the herds have increased a lot. We are not taking till now the whole benefit from them, I think this challenge we had with climate, we postponed the benefit for longer than we have expected to have,” Mr Tomazoni said.

“However we remain confident in terms of the Australia delivering results in the coming quarters.”

Dual listing on NYSX

Analysts asked for updates on JBS’s proposed dual listing on the New York Stock Exchange, with shareholders due to vote on the move on Friday.

“How do you feel about your ability to really talk to investors and how has the feedback been just from some of these investors that tend to vote along these proxies? one analyst asked.

Mr Cavalcanti said the company had been continuing to be talking to shareholders, showing the importance of them participating in the vote.

Should the process be approved by shareholders, it looked like the formal listing on NYSX could happen on 12 June.

“That’s the tentative time frame. Some things are not of control, but that’s what we put as a tentative on the F4,” the company told analysts.

Global aspirations for eggs

Analyst John Wagner from Mizuno asked about JBS’s diversification strategy and particularly the investment back in January into the egg production business in Brazil.

“That seems to be a nice opportunity in moving into a lower-price protein. And I’m curious how you think about growing this exposure to eggs over time. Is this something that you’re looking to grow more ambitiously relative to other new divisions, like aquaculture or plant-based?” he asked.

Mr Tomazoni said aquaculture was a different market from eggs.

“Aquaculture is bound by a lot of regulations, we cannot simply established a business and start; it depends on the license to operate, it’s more we can grow, improve our volume where we are, for example, in Tasmania, but otherwise we need to go by acquisition,” he said.

“This is where we keep our priority to grow, in this segment. It’s one of the priorities. And eggs, we have started in Brazil, but eggs are a global protein, I think it’s more global than the other proteins.

“We have the ambitions to do with eggs the same as we have done with chicken, pork and beef – be one the global players, one of the leaders in the market.”