Thursday, August 7, 2008

Brazillian Beef Powerhouse

This article appeared in the WSJ last Friday. Still catching up on things I missed. The article tells about the Batista family and their grab in the cattle industry as the market is being roiled with low beef prices compared to fuel and grain prices. I think they are doing it exactly right and I think over time will be very profitable for them. They are traded on the Brazilian stock exchange and have been falling recently.

Several months ago all you heard was about blood flowing in the streets in the equity markets. I scoffed at such a notion. Well blood looks like it is flowing in the streets in the beef industry. The Batista clan has it right.

With grain prices high, the meat business in much of the world is reeling. Cattlemen are losing money fattening their herds on pricey feed.

Meatpackers are struggling to turn a profit.JBS SA, based here in Brazil's business hub, smells blood, and has set out to assemble a global beef empire. Its premise is simple: Meatpackers, at the moment, are cheap. Demand for beef is rising in developing nations. Beef prices, eventually, are likely to surge as well.

The whole article if you missed it in the Journal is fascinating.

No comments: