JBS released its Q2 2023 financial results this week, revealing a net loss of $53 million in Q2 2023, down sharply from a net profit of $803 million in Q2 2022. The decline was the result of an oversupply of poultry and tighter beef margins in the U.S., as well as an overall challenging global protein complex, JBS CEO Gilbert Tomazoni said.

Despite the challenging quarter, Tomazoni said the company remains confident that margins are recovering. “In this second quarter, we've doubled our margin over the first quarter. Looking ahead, we see a scenario of more balance in poultry supply with potential positive impact on the sector prices.”

Still, challenges for the U.S. beef business will persist for the coming months due to tighter cattle supplies, he added.

Wesley Batista Filho, CEO of JBS South America, noted that all signs are pointing to herd rebuilding in 2024 but suggested that cattle supplies will continue to get even tighter into next year.

Q2 2023 net revenue for JBS Beef North America was $5.8 billion, an increase of 5% compared to the same quarter last year.

On the chicken side, Pilgrim's Pride posted a net revenue of $4.3 billion during Q2, down 7% from Q2 2022. Even with the lower prices, the company said it was able to improve profitability through a more diversified branded portfolio and partnerships with key customers.

JBS USA Pork posted net revenue of $1.8 billion for the quarter, 16% lower compared to the second quarter 2022. JBS Chief Financial Officer Guilherme Cavalcanti said the main impact for the pork business continues to be an oversupply of pork in the domestic market. However, he said U.S. inventories are on a downward trend, “which could benefit the rebalancing of supply and demand in the medium term.”

Further, JBS noted that pork exports have increased, especially to China, South Korea, and Mexico. “Low prices in the domestic market and lower exports from important producing regions, such as Europe, are sustaining this growth,” the company said.