US President Donald Trump said Friday he will allow 300,000 metric tons of beef imports to enter the country without the 26.5% out-of-quota tariff for 90 days, in a bid to lower ground-beef prices for American consumers.
Details of the tariff exemption have yet to be released, but analysts expect Brazil to be among the biggest beneficiaries because of its ability to supply large volumes of competitively priced beef.
The move, which has been anticipated for about three months, comes at an opportune time for Brazilian meatpackers. With exporters unable to increase sales to China after filling their quota, the US offers an alternative and highly profitable market.
The US is Brazil’s second-largest beef buyer this year, accounting for 12% of shipments, behind China at 44%. Brazilian exporters typically sell forequarter beef to the US, the type of meat commonly used to make ground beef and hamburgers.
Brazilian meatpackers shipped 233,000 metric tons of beef to the US from January through July, generating $1.5 billion in revenue, according to foreign-trade data compiled by Brazil’s Agriculture Ministry.
The average export price to the US was about $6,600 per metric ton over the period. At that price, the 300,000 metric tons covered by the measure would be worth roughly $1.9 billion. Waiving the 26.5% out-of-quota tariff implies potential savings of about $500 million for suppliers.
“Among the meatpackers, Minerva should be the biggest beneficiary,” XP Investimentos analyst Leonardo Alencar wrote in a note to clients. Minerva shares rose about 3% in São Paulo on Friday.
Minerva, one of Brazil’s largest beef exporters, has the greatest relative exposure to Brazilian production among the major listed meatpackers, with 55% of its revenue coming from sales of beef produced in Brazil.
The company could also increase shipments to the US from its operations in Uruguay and Argentina.
For JBS and MBRF, Trump’s decision is likely to have mixed effects, benefiting their Brazilian export businesses while potentially weighing on their US operations.
“We see this decision as particularly negative for Tyson Foods, given its concentration in the US beef market,” BTG Pactual analysts Thiago Duarte and Guilherme Guttilla wrote. “The measure could also be negative for JBS’s and MBRF’s US operations, but the consolidated impact should be partly offset because both companies export beef to the US.”
This story was translated from the original Portuguese with the assistance of artificial intelligence and reviewed by The AgriBiz editorial staff.
