Greeley – The head of meatpacker Swift & Co. said Wednesday he expects U.S. beef-market conditions to remain difficult in the near term, citing persistent tight cattle supplies and higher fed- steer prices.
Sam Rovit, Swift’s president and chief executive officer, also said the company is hopeful that Japan will lift its ban on U.S. beef before year’s end, although he cautioned that producers are unlikely to see the benefits of such a move for months.
Obstacles to filling beef demands in Japan include a short supply of age-verified cattle, a decline in Japanese beef consumption and more competition from Australian companies that moved into that market.
The reopening of the Japanese market should be a net gain for the company, which also has operations in Australia, he said.
Rovit made the comments during a conference call with analysts following the release of the beef and pork processor’s first-quarter results. The Greeley-based company is a subsidiary of S&C Holdo 3 Inc., based in Delaware.
“Beef-market conditions have been unfavorable for us and frankly the entire industry in this quarter, both in the U.S. and in Australia,” Rovit said. “Our first quarter financial results reflect this reality.”
For the quarter that ended Aug. 28, Swift reported a net loss of $13.1 million, compared with $23.7 million in net income in the previous first quarter. Net sales were $2.4 billion, down 4 percent from $2.5 billion in the previous first quarter.
Sales in the beef division totaled $1.4 billion, down 5 percent; pork division, $523 million, down 13 percent; and Australian division, $502 million, up 9 percent.
“While we do not provide earnings guidance, I will say that our near-term forecast of U.S. beef-market conditions remains tough,” he said.
Swift is one of the largest meatpackers in the United States, operating nine domestic processing facilities in addition to Australia Meat Holdings Pty. Ltd. operations.
Japan suspended imports of U.S. beef after the discovery of mad cow disease in Washington state in 2003. Its Food Safety Commission last month said it needed more time to evaluate U.S. safety procedures.
