UPDATE 1-Brazil JBS’s Q1 profit rises to nearly $1 billion

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Brazilian meatpacker JBS SA posted a first-quarter profit that beat expectations on the back of strength in its United States business, according to a financial statement on Wednesday.

Despite posting a 151.4% increase in profit, high global grain prices and Brazil’s sluggish economy challenged the world’s biggest meat company, in addition to an expected drop in pork exports to China.

JBS made 5.14 billion reais ($1.00 billion) in profit after reporting net sales 20.8% higher at 90.8 billion reais.

Beef operations in North America remained strong, with net revenue rising almost 22% thanks to heated domestic demand, the recovery of food service channels and healthy retail sales, which also bolstered JBS’s chicken business in the region.

The United States is also a major export platform for JBS.

During the quarter, and despite the slowness of some U.S. port operations, the company said beef export volumes rose by more than 6% from the country.

JBS also said Asia continues to be the most important region for exports of U.S. beef, notably China, which in the period increased beef import volumes by almost 62%.

On the other hand, the company said U.S. pork exports to China slumped, with the United States now ranking fifth as the main supplier of that type of meat to the Asian country.

U.S.-based pork processors reeled because China recovered from African Swine Fever, and may now supply more of its own needs, JBS said.

JBS’s beef unit in Brazil was able to raise sales by 24.2% last quarter, despite a 5% drop in cattle processing because China temporarily banned some Brazilian beef exporters.

A rise in the price of domestic cattle weighed negatively, as has a fall in domestic beef consumption.

Regarding its Seara processed foods division in Brazil, a persistent rise in the price of corn and soymeal, used as animal feed, was partly offset by JBS’s ability to raise product prices, the company said.