THE U.S. meat and poultry industry, as well as other key sectors of U.S. agriculture, in early May faced an uncertain second half of 2025. This was due to President Trump’s imposition of tariffs on many imports and then retaliatory tariffs imposed on U.S. exports. Trade in most agricultural goods between the U.S., Canada and Mexico largely escaped unscathed but the opposite was true between the U.S. and China. U.S. pork and beef exports to China hit a wall in mid-April due to China’s duties, which totaled 172% for U.S. pork and 147% for U.S. beef.
However, the outlook changed dramatically on May 12 when trade officials from the two countries agreed to reduce tariffs significantly after holding trade talks in Switzerland the weekend before. Tariffs on Chinese exports to the U.S. will be reduced from 145% to 30% for 90 days. The Chinese retaliatory duties on U.S. exports will go from 135% to 10% for American goods. However, a bundle of tariffs on U.S. beef and pork are still at 32% and 57%, respectively, which render both meats too expensive for Chinese importers to consider buying. Two other caveats remain. There is no guarantee that higher tariffs might not be re-introduced after the 90 days. Second and more important, China in March renewed the eligibility of most U.S. pork and poultry plants to export to China. But it did not and still has not renewed the eligibility of any U.S. beef plants. This means that all U.S. beef remains locked out of China until China acts.
Further Progress Is Necessary
The U.S. Meat Export Federation (USMEF) is encouraged by the de-escalation in trade tensions between the U.S. and China and it looks forward to negotiations continuing in weeks to come, it told CBW. But further progress is necessary if U.S. beef is to regain meaningful access to the Chinese market. For the 90-day period that began last Wednesday, China’s beef tariffs include a 10% retaliation for the U.S. fentanyl tariffs and the 10% reciprocal retaliation, bringing the total on U.S. beef to 32% when including the 12% most-favored-nation (MFN) tariff. For U.S. pork, the Section 232 metal retaliation of 25% also remains in place, plus the 10% fentanyl tariff, the 10% reciprocal tariff and the 12% MFN, for a combined total of 57%, it said.
Furthermore, China still has not updated the U.S. beef facilities that have expired in its Import Food Enterprise Registration (CIFER) system, said USMEF. Most U.S. beef production facilities expired March 16. China updated the U.S. pork and poultry facilities that had been due to expire in March, and has since updated the pork facilities that expired in April. But there has not yet been any movement on the expired beef facilities. Until this non-tariff barrier is addressed, U.S. beef exports to China will be minimal, despite this week’s tariff reductions, said USMEF.
The crisis for exporters began when tariffs escalated rapidly in the first ten days of April, said USMEF. This meant that product for China, derived from program cattle and then specially packaged with China-specific labels, was already in the pipeline for shipment. USMEF estimates that roughly $50M worth of China-labeled product had to be diverted or resold at sharply lower prices. Looking forward, the U.S. still faces significant losses until China provides the registration updates in its CIFER system. The lost opportunity, which includes the loss of the direct export value for China plus the reduced prices for items that Chinese buyers would normally compete for, is estimated at $150 to $165 per head. This equates to about $4 billion annually. Access to China is still critically important. U.S. producers, and the entire U.S. beef supply chain must be able to derive the highest value for every item on every animal. That is not possible without the Chinese market, said USMEF.
U.S. FOOD STILL FACES TARIFF THREAT
THE U.S.-China trade war has won a 90-day reprieve. But current and possibly future tariffs still threaten to disrupt exports to China of a wide array of U.S. commodities and food products, from beef to soybeans. More than $15.7 billion in U.S. agricultural exports to China faced tariffs of 84% from April 10. The trade war had escalated dramatically after the White House on April 2 announced sweeping new tariffs on more than 50 countries, including a combined 54% levy added for Chinese goods. On April 7, Trump threatened an additional 50% tariff on Chinese goods imported into the U.S. China two days later responded with a tariff escalation of its own, slapping an additional 34% levy on U.S. goods, on top of 10% to 15% tariffs China added on select products earlier this year.
Trump then announced on April 8 his plan to raise tariffs to 104% for Chinese imports. He stated he would impose an additional 50% tariff if the nation did not withdraw its 34% counter-tariff. Then he raised the tariff on Chinese exports to the U.S. to 145%. China responded by saying it would raise tariffs on U.S. imports to 84%. Trump however backtracked on higher tariffs to other countries. He delayed their implementation for 90 days, although the baseline 10% tariff remained in place. Canada and Mexico will remain for now exempt from the 10% tariff.
The American Feed Industry Association (AFIA) last week said it was pleased to see a cooling of U.S. tariffs on and retaliatory tariffs from China. It was also pleased to see a proposed trade agreement with the United Kingdom coming to fruition. Both China and the UK present valuable opportunities for U.S. animal food manufacturers, which produce some of the safest, highest quality and innovative feed, feed ingredients and petfood globally, said AFIA. China is the U.S. animal food industry’s third top export destination by value at $1.27 billion in 2024. In 2024, the U.S. animal food industry imported roughly $549M in ingredients and animal food products, with some of the top imports being vitamin E, amino acids, dog and cat food, vitamin C and animal feed, said AFIA.
U.S. trade officials announced a potential trade agreement with the UK, the 19th largest trading partner for U.S. animal food exports based on 2024 data, said AFIA. While the two countries negotiate a final agreement, the U.S. will maintain a 10% baseline tariff on British imports and will reduce levies on various commodities. The UK will reduce or eliminate several non-tariff trade barriers that have impeded the U.S.’s ability to conduct trade with the country, said AFIA.
JBS BEEF NA HAS $113M LOSS
JBS Beef North America reports a negative adjusted EBITDA of $112.9M for its 2025 first quarter, for a negative margin of 1.8%. Net revenue in the quarter was $6.422 billion, a 15.1% increase over sales in 2024’s first quarter. The growth in net revenue was a result of strong demand in the U.S., combined with internal initiatives to take advantage of this consumption, says parent company JBS SA. On the other hand, beef margins in North America continued to be pressured by the cattle cycle, it says. Despite the beef loss, JBS began 2025 with one of the strongest first quarter results in its history, said global CEO Gilberto Tomazoni.
In yet another demonstration of the strength of JBS’s diversified global platform, net sales in the quarter rose 8.5% and net profit jumped 50.5%, with an EBITDA margin of 7.8%, said Tomazoni. This was a remarkable performance in what is typically a softer quarter for the global protein industry. JBS’s poultry and pork businesses in Brazil and the U.S. were the standout performers this quarter. Seara and Pilgrim’s Pride Corporation delivered record first quarter EBITDA margins of 19.8% and14.8%, respectively, he said.
Seara’s performance reflects a focus on operational excellence and positioning across domestic and international markets, capturing value through product mix optimization and a strong focus on innovation, he says. With the launch of new categories in Brazil and a co-branded partnership with Netflix, the business continues to strengthen its portfolio of high value-added offerings, said Tomazoni.
Strategy Yields Positive Results
Pilgrim’s results were driven by solid demand, disciplined portfolio management and stable grain costs, said Tomazoni. JBS USA Pork also delivered strong performance, supported by higher sales volumes and a favorable supply-demand dynamic, achieving an EBITDA margin of 12.4%. JBS’s strategy of geographic and protein diversification continues to yield positive results, even amid ongoing margin pressure for JBS Beef North America, he said. The beef businesses in Brazil and Australia are benefiting from the respective cattle cycles in both countries. At Friboi, the focus remains on operational excellence, expanding the value-added portfolio and increasing market access. In Australia, where the cattle cycle is expected to remain favorable in the coming quarters, results reflect operational improvements and export growth, said Tomazoni.
JBS remains confident in its long-term strategy of operational excellence, growth through diversification, innovation, value added products and strong brands, said Tomazoni. The strength of JBS’s global platform, combined with disciplined capital allocation, market diversification and its capacity to innovate, supports value creation for all its stakeholders, including its team members, customers, investors, producer partners and consumers. Its first quarter results reaffirm its conviction that it is on the right path, delivering consistent growth, expanding margins and preparing JBS for a new cycle of opportunities, he said.
JBS in the quarter had net revenue of $19.527 billion, versus $17.999 billion a year earlier. Its profit before taxes was $694.1M, versus $367.6M. Net income was $500.2M versus $332.3M. Adjusted EBITDA was $1.528 billion versus $1.298 billion. Earning per share were $0.23 versus $0.15. JBS’s results quarter after quarter continue to validate the strategic decisions it has made in building and managing its platform, said Tomazoni.
U.S. Prices Reached Record Levels
According to data released by USDA, live cattle prices and wholesale beef prices both reached record levels in the first quarter, says JBS. However, the growth in cattle prices outpaced the growth in wholesale prices. Since cattle represent 85% of the cost of goods sold, profitability was pressured in the period. JBS maintains its strategic focus on excellence in operational and commercial execution to preserve its profitability. Among the ongoing initiatives, the optimization of the product portfolio, the increase in yield per carcass and the maximization of plant efficiency stand out. These measures, implemented in a structured manner, are essential to mitigate the challenges imposed by this more challenging cycle that it is facing in 2025, it says.
JBS USA Pork had net revenue in the quarter of $2.002 billion, a 5% increase compared to last year. Adjusted EBITDA totaled $222.7M, with a margin of 11.1%. In the domestic market, net revenue increased 7% year-on-year. This reflected the increase in prices and volumes, driven by strong demand, says JBS. Pork consumption is also being favored because of the average price of beef, which remains at high levels. JBS USA Pork once again demonstrated consistency and strength in its results in the quarter. In addition to having efficient assets, the improvement in commercial dynamics, solid operational execution and the expansion of the value-added portfolio boosted profitability, says JBS.
Net revenue for JBS Australia in the quarter totaled $1.622 billion, a 12% increase from a year ago. This was driven by a 6% increase in volume sold and a 5% increase in average prices, says JBS. Adjusted EBITDA was $168.8M, with an EBITDA margin of 10.4%. The strong growth in revenue from the beef business, compared to a year earlier, reflected the higher volume sold in the export market. Despite the increase in the cost of cattle, which according to Meat & Livestock Australia increased by 7% from a year ago, the growth in profitability reflected the operational efficiencies achieved through cost reduction initiatives and the increase in processed volume, driven by the greater availability of animals. Its aquaculture business reported a decline in net revenue in the quarter, due to lower sales prices. But this was partially offset by higher volumes sold in the export market. Net revenue from its pork business grew 4% in the quarter versus last year as a result of higher volumes sold. The improvement in profitability was also a result of operational efficiency gains, says JBS.
CATTLE ON FEED FORECASTS
David Anderson, Texas A&M University: COF 98.5%, placed 96.6%, marketed 96.4%; Kevin Coburn, S&P Global Commodity Insights: COF 98.5%, placed 96.6%, marketed 96.4%; Tyler Cozzens, Livestock Marketing Information Center: COF 98.6%, placed 98.0%, marketed 96.7%; Andrew Gottschalk, HedgersEdge.com: COF 98.5%, placed 97.5%, marketed 97.1%; Rich Nelson, Allendale Inc: COF 98.6%, placed 97.4%, marketed 96.0%; Lori Porter, Allegiant Commodity Group: COF 98.3%, placed 95.4%, marketed 96.5%; Mike Sands, MBS Research: COF 99%, placed 104%, marketed 97%
COF TOTAL IS DOWN 1.5%
THE May 1 Cattle on Feed (COF) total was likely down 1.5% from the total a year earlier. April placements were likely down 2-3% and April marketings were likely down 3-4%. The COF total was an estimated 246,000 head below the previous five-year average, says Andrew Gottschalk, HedgersEdge.com. Front-end fed cattle supplies (COF 150 days or more) on May 1 were estimated to be 3.196M head. This was 3.9% above the previous year and 13.6% above the previous five-year average, an increase of 382,000 head. Total cattle on feed numbers are estimated to trend lower into August by 406,000 head. The previous five-year average seasonal decline from May to August is 471,000 head, he says.
Carcass weight data continues to confirm that fed cattle supplies remain front-end loaded, says Gottschalk. The cost of gain remains substantially below the current selling price of fed cattle, while the costs of replacement cattle project limited profitability. The incentive thus remains to add additional pounds. As such, carcass weights likely will remain substantially above prior year levels. As a reminder, each 8.5 lb gain in carcass weights versus the prior year adds approximately 1% to weekly beef production, he says.
Steer and heifer carcass weights in the latest reported week ended April 19 fell sharply from the prior week but remained well above year ago levels. Steer weights averaged 938 lbs, down 8 lbs from the week before but up 15 lbs on the same week last year. Heifer weights averaged 865 lbs, also down up 8 lbs from the week before but up 17 lbs on the same week last year. Overall weights averaged 871 lbs, down 6 lbs from the week before but up 19 lbs on the same week last year. This was the equivalent of adding 12,550 head to that week’s slaughter total of 562,668 head, says HedgersEdge.com.
The 5-area fed steer price the week before last averaged another new record high of $224.80 per cwt live, up $3.83 per cwt from the prior week’s $220.97 per cwt, which was the previous record. The price was 20.9% higher than the price the same week last year. Dressed prices averaged a new record high of $356.06 per cwt, up $6.69 per cwt from the prior week’s $349.37 per cwt. The price was up 20.6% on the same week last year. Last week saw little trade through Wednesday. But it turned active Thursday morning. Prices up north averaged $220-230 per cwt live or $350-360 per cwt dressed. Prices down south averaged mostly $219-220 per cwt live.
Boxed beef cutout values meanwhile rose sharply the first four days of last week. The Choice cutout increased by $3.93 per cwt to $349.90 per cwt. The Select cutout increased by $8.01 per cwt to $339.18 per cwt. The week before last saw the national comprehensive boxed beef cutout (cuts, grinds and trim) average $342.46 per cwt, up from $337.37 per cwt in the prior week. The Choice cutout averaged $342.43 per cwt., Spot market sales accounted for 30.1% of the total volume of 6393 loads, formula sales accounted for 51.3%, forward sales accounted for 14.2% and export sales accounted for 7.9%.
The industry is on track to record its lowest annual harvest level since 2014, says Gottschalk. If this is realized, it would also score the largest year-over-year decline since 2014. This harvest level would result in some minor herd expansion occurring this year. It should also be noted that 2014 marked the highest weekly and annual average price for that specific herd liquidation cycle, he says.