JBS’s Batista speaks on demand, market accessWritten by Christy Hemken
Denver, Colo. – At the mid-January gathering of the 2010 International Livestock Conference Wesley Batista, President and CEO of Brazil-based JBS, was on hand to speak to the audience.
“My father started JBS from the ground 57 years ago, and all my father’s life he was involved in the cattle and packing business,” said Batista in a thick Brazilian accent. “He’s still strong at 75 years old and runs farms, feedlots and cow/calf operations. We know how hard it is to produce anywhere, and to produce is a very important job.”
Today Batista and his brother run JBS. Batista is responsible for the western operation and Australia, while his brother manages South America and Europe.
“We’ve been growing, but we’re only able to grow the company because we have a really good team,” he notes. “Our biggest asset is the team that is part of JBS and runs the company.”
In 2007 JBS first came to the U.S. with the purchase of Swift & Co. “We’ve been working inside JBS to improve our business, and fortunately we’ve been improving and getting better every day, so the company is heading in a very good direction. We’re optimistic about the future of our business.”
“I think the whole industry – producer, packers, distributors and retailers –has a lot of opportunity to improve our business,” he continued. “The business overall has been very challenged. At the end of the day, we definitely believe that as an industry we have a huge opportunity to work together and to improve our business.”
Batista continued that, in his view, it’s about demand for the product. “A lot of times we complain between producers and packers, but at the end of the day it’s all about consumption. If we have more demand for the product, we have a better time in our industry.”
“At JBS we are open to work, and we’ve been working as part of the industry to see how we can improve our business through stimulating more demand for our product,” he added. “In the U.S., for example, there are 300 million people. We can imagine increasing consumption to two pounds per person per week, which means 600 million pounds consumed. In our view that’s a huge opportunity.”
“When we look at the whole industry together, we can work to stimulate more demand,” said Batista, adding another key area within JBS is exports.
“In 2009 the volume JBS exported was 10 percent more than in 2008,” he stated. “We’ve been working really hard to expand our export sales. We buy cattle, disassemble the cattle and sell a lot of pieces in different markets, and that’s very key in our business. We are able to sell, into as many markets as we can, the right cuts into the right market.”
He noted JBS’s recognition that every different country and region likes to eat different kinds of meat, giving Korea and short ribs as an example. “Each market has different preferences and that’s key, in our view, to improving our industry,” he said.
“I think we need to be careful with market restrictions,” he added. “In some ways we can improve market access, but on the other hand if we don’t work diligently we can reduce market access because those countries are looking to protect their own economies and create more jobs in their countries. It’s a key area, but we need to watch and work closely with governments to ensure we take care in expanding market access.”
Speaking of beef production, Batista remarked that global production isn’t increasing anywhere, and some areas like Europe, the U.S. and Australia have reduced production.
“Overall, global beef production is steady or declining,” he added. “We are seeing markets still growing, with fast growth in China, Brazil and Russia. We still watch this, and we think we’ll see the benefit of growth in those area markets because of the decline in production and increased demand as those countries are growing.
He concluded by saying JBS thinks the two key opportunities in the beef industry are increasing both demand in the U.S. and market access globally. “Those two things would improve our whole business,” he said. “At the end of the day, if producers and packers and retailers complain about each other, we will not go anywhere. I know that we can go somewhere if we have more demand and market access.”