By Robert Pore
robert.pore@theindependent.com

JBS owns the Swift beef processing plant in Grand Island.

If the deals are approved, the Sao Paulo-based meat company that purchased Swift & Co. last year, will become the largest beef producer in the United States and in the world, holding about a 32-percent U.S. market share and 10 percent of the world beef market.

Brazil is the world's largest beef producer and now the Brazilian-based company will control more of the market in the world's second largest beef producing country.

Kelsey said none of JBS's acquisitions were in Nebraska.

"I think it's too early to tell," he said about what impact the purchase will have on the beef industry.

Kelsey said he has been in contact with the companies involved in the sale to determine what effect it could have on Nebraska if the sale is approved by the government.

"I think the first thing we need to do is to allow the Justice Department to go through their reviewing process to understand the legalities of the question," he said.

Considering the devaluation of the U.S. dollar, Kelsey said he could understand why JBS has made the purchase.

"From a business standpoint, you can start making some sense of this," he said. "But is it a big shift? You are darn right it is, because this is big news and we need to be on top of this."

The U.S. beef packing industry is struggling with exceeding capacity and high corn prices.

Last year, Latin America's largest beef processor purchased Swift & Co., the world's third-largest processor of fresh beef and pork products, in an all-cash transaction valued at $1.5 billion.

At the time of the acquisition, the consolidated JBS Swift Group became the largest beef processor in the world.

But R-CALF USA has expressed concern about the possible sale.

"Time and time again, cattle producers have had to watch helplessly as the multinational meatpackers manipulate the cattle market for their own benefit, and additional concentration among the packers likely will reduce even more the number of cattle operations in the United States," said R-CALF USA Region II Director/Vice President Randy Stevenson, who represents Wyoming, Colorado, Utah and New Mexico members.

He said R-CALF USA is calling on Congress to immediately amend the Packers and Stockyards Act (PSA) to prohibit the anti-competitive practice of packer ownership of livestock by the largest meatpackers.

"We are strongly encouraging the Department of Justice to block JBS' efforts to further consolidate the U.S. meatpacking industry," Stevenson said.

While Kelsey said there's concern about the JBS purchase, he has personally met the owners of the company. He said they have a vision of a global economy when pertaining to the beef industry.

"We need to understand how exactly this is going to affect us and, quite frankly, I think it's a little too early to know right now exactly for sure until we get the legality issues answered," he said. "We have a good relationship with Swift and with National and we intend to keep those relationships positive and moving forward. This is just a shakeup in structure."

John Huston, executive vice president emeritus with the National Cattlemen's Beef Association, said the top concern about JBS's purchase is how it will directly impact cattle buyers and what kind of price will producers receive now that competition has consolidated even further with fewer packers bidding for cattle.

"I think there will also be some discussion about internationally-owned companies having control of the U.S. beef industry," Huston said.

He said the beef industry is going through some hard times, as evidenced by Tyson Foods' decision to shut down a beef processing plant it owns in Kansas.

"It's a case of overcapacity right now," Huston said.