JBS has done it again. Today, Meatingplace reports the Brazilian meatpacking giant’s South American arm has secured a deal to sell over $700 million dollars worth of beef, pork, and poultry to China per year under its Friboi and Seara brands out of Brazil. “This agreement reflects the maturity and evolution of our trade relations with China,” said Renato Costa, president of Friboi. “It will be an opportunity for us to evolve in our supply chain in an unprecedented business model for JBS.”
The deal is with China’s WH Group, which owns Smithfield Foods in the U.S. We have to wonder why WH Group would not have increased its U.S. exports of Smithfield pork to meet China’s growing demand for meat. Instead, they cut a deal with a Brazilian company, bypassing the U.S. farmer. In all of this wheeling and dealing, where is the benefit for the American farmer and rancher? It looks like they are simply left standing out in the pasture.
When the Trump Administration announced it had reached a first phase deal with China in December, some analysts questioned whether China even had the demand for an additional $200 billion in U.S. agricultural goods over the next two years. “We think it is highly challenging for China to import $200 billion more in goods and services from the U.S. over the next two years without reducing imports from elsewhere,” said analysts at UBS. The fact is, China isn’t reducing imports from elsewhere, it is increasing them. With this new deal between China and JBS, the Trump Administration may be left holding an empty promise.
But what makes this deal stink like the rotten meat JBS shipped around the world back in 2017? OCM has called out USDA Secretary Sonny Perdue for having helped put JBS in this lucrative position with the taxpayer-funded $100 million in pork purchases from JBS in the name of the U.S.-China trade war farmer bailout during the past year and a half. JBS announced in August 2019 it was profiting from the trade war by shipping pork from its Brazilian plants to meet Chinese demand. JBS told the world it was going on a buying spree, and soon gobbled up a European pork plant. Just this month, JBS announced it had opened a new beef plant in Brazil, positioning itself to close this $700 million deal with China.