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News and analysis on the global poultry
and animal feed industries.
on September 16, 2009

JBS, Pilgrim’s deal follows industry pattern of globalization

The company purchased Pilgrim's at a time of relative market lows

With the announcement of JBS purchasing Pilgrim’s Pride, and Marfrig’s buyout of Seara, the agri-food industry is becoming increasingly global and diverse.

In the case of JBS and Pilgrim’s, one industry expert is wondering why it didn’t happen sooner.

“JBS is big in beef and pork. I guess the question is – why did they wait so long to get into poultry?” said Paul Aho, an agribusiness economist.

Aho points to the recent changes among industry giants as further proof that companies must be global to compete.

“They’re combining beef, pork and chicken, and of course I’m sure that they are wanting to diversify into poultry in the U.S. and maybe in Brazil, as well,” he said.

“In the future, if you’re going to be one of the global leaders, you would need to be in the U.S., Brazil and China.”

Now that Pilgrim’s is in the JBS family, its scope and sales are reportedly expected to be close to Tyson, but Aho said that’s not a bad thing. 

“It’s a win-win situation. Pilgrim’s will be in steady hands … I don’t think this means things are worse for Tyson, but Pilgrim’s will also do well, too.”

From an economic perspective, JBS struck at a time of relative market lows.

JBS has not commented on Marfrig’s purchase of Seara, which was owned by Cargill in the U.S.

Read the original buyout announcement.

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