Cargill has agreed to sell its U.S.-based pork business for $1.45 billion to Brazil-based meatpacker JBS. The Cargill business had sales of about $2.5 billion and should raise JBS USA's pork revenues to $6.3 billion.
Included are two Midwest meat processing plants, one in Ottumwa, Iowa, and the other at Beardstown, Ill. Both plants were acquired by Cargill in 1987, and in 2014 they processed a total of 9.3 million hogs. The purchase by JBS also includes five feed mills (two in Missouri, and one each in Arkansas, Iowa and Texas), and four hog farms (two in Arkansas and one each in Oklahoma and Texas).
JBS first entered the U.S. pork market with the acquisition of Swift & Co. in 2007 and has grown steadily since. The company has more than 6,000 team members and the total daily capacity to process more than 50,000 hogs at processing facilities in Marshalltown, Iowa; Worthington, Minn.; and Louisville, Ky. JBS also has U.S. interests in beef and poultry and is the majority owner of chicken processor Pilgrim's Pride.
Porcine epidemic diarrhea virus killed millions of hogs last year, sending prices skyrocketing for meat and livestock. But this year production bounced back strongly and prices have dropped. The U.S. is the world's largest exporter of pork products and its lowest-cost producer.
“Today’s announcement of our agreement to purchase the Cargill pork operations is a strategic investment in the long-term growth of our domestic and global pork business and demonstrates our continued commitment to the U.S. livestock sector,” said Martin Dooley, president and COO of JBS USA Pork.
Todd Hall, a Cargill senior vice president, called the JBS and Cargill pork businesses complementary.