Earlier this month, The W all Street Journal reported that the Brazilian firm JBS—the globe’s largest beef processor—was on the verge of buying U.S. chicken giant Pilgrim’s Pride. Although the companies have since remained mum on the tie-up, rumors of an imminent deal continue to swirl.
While we await and announcement, it’s worth considering what the U.S. meat industry would look like if JBS swallowed Pilgrim’s Pride. Essentially, it would look like this: four giants (JBS, Tyson, Cargill, and Smithfield) lumbering across the landscape, towering over and stepping on their farmer suppliers.
As it stands today, JBS processes 10 percent of the beef consumed worldwide. If the Pilgrim’s deal goes through, it will have large positions in the U.S. beef, pork, and chicken markets.
The move seems like a play to go toe-to-toe with Tyson, the only other company with large positions in those three commodities. As one industry observer put it on the AgWeb blog, wielding such large positions across commodities gives Tyson leverage with big retailers for shelf space.