Inclement weather has forced meatpackers to fully or partially halt operations at 10 pork or poultry plants in Brazil’s southernmost state of Rio Grande do Sul, meat lobby ABPA said on Monday.
ABPA said these plants have been struggling to process raw material and to transport employees to the factories, which are facing “extreme issues” to operate as heavy rains and flooding left entire towns under water, blocked roads and destroyed critical infrastructure.
“There is also a fear that Rio Grande do Sul’s population would face a shortage of poultry and pork products until the production systems resume - which could take more than 30 days,” ABPA said.
Companies including JBS SA JBSS3.SA and BRF SA BRFS3.SA operate multiple plants in Rio Grande do Sul.
“Given its dependence on chicken, pork and processed food produced in Brazil, BRF would be the company under our coverage with the highest exposure to the state,” Goldman Sachs said in a note to clients.
Rio Grande do Sul state accounts for 11% of Brazil’s total chicken production and for 19.8% of pork supplies, ABPA data showed. Part of the volume is sold on export markets.
BRF shares fell about 4% in early afternoon trading while JBS was down 0.4%.
(Reporting by Ana Mano and André Romani, Editing by Franklin Paul, Aurora Ellis and Richard Chang)
