Minerva Expects Brazil to Resume Beef Exports to U.S. in First Quarter

Minerva SA, Brazil’s fourth-largest listed meat company by sales, expects the country will resume fresh beef exports to the United States in the first quarter of 2018, Chief Executive Fernando Galletti said on Tuesday.

The United States had halted the import of fresh Brazilian beef in June after a high percentage of shipments failed to pass U.S. Department of Agriculture safety checks. The USDA said the suspension would remain until Brazil’s Agriculture Ministry took corrective action.

Speaking on the sidelines of a conference hosted by Minerva, Galletti told reporters his prediction was based on talks with the government.

“This is the expectation we are hearing from the Agriculture Ministry,” he said, adding the company interacts with the government through a meatpackers industry group.

Galletti said the company was ready to resume supplies to the U.S. when the ban is lifted.

The ministry did not immediately respond to a request for comment.

Since the start of the year, domestic meat producers have faced a series of challenges ranging from a food safety scandal, which shut export markets temporarily for Brazil, to a corruption scandal that ensnared JBS SA, the world’s largest meat company.

Russian Ban

Last week, the industry received another blow when Russia imposed a temporary ban on Brazilian beef and pork.

The ban forced Minerva, which accounts for 7-8 percent of global beef trade, to supply Russia from its plants outside Brazil, Galletti said, adding the situation with Russia remained unchanged.

Minerva is meeting Russian demand through its other units in the Mercosur regional trade bloc that encompasses Brazil, Argentina, Paraguay and Uruguay.

South America is poised to become the world’s main beef-producing hub due to local producers’ cost advantages, according to Minerva, which expanded its regional footprint outside Brazil earlier this year by buying Mercosur-based beef plants from JBS in a $300 million acquisition.

Galletti declined to give a timeline for reopening three of the slaughterhouses it bought from JBS in Argentina, but said this would not affect Minerva’s ability to meet annual net revenue forecasts of 13 billion reais to 14.4 billion reais ($4 billion-$4.5 billion).

Minerva’s shares have slipped just 3.65 percent year-to-date, performing better than larger rivals JBS, down 30 pct this year, and BRF SA, down 18 percent.

Still, Minerva trails Brazil’s No. 3 listed meatpacker Marfrig Global Foods SA, which is up almost 6 percent for the year.