Considering the sale comes at a time when many processors’ profits are at historic highs, as demand trends upward and US consumption of beef in 2018 expected to increase even more than the seven-year-high estimate of 58 lbs. per capita in 2017. Meanwhile input feed costs remain comparatively low amidst a series of successive bumper harvests. Exports of US beef in 2017 increased about 13 percent, according to US Dept. of Agriculture reports mentioned in the WSJ report.
Leucadia’s investment in National Beef came at a time when the conglomerate was betting on long-term growing demand for beef globally. “Executives then acknowledged the meat business’s exposure to price swings, and as the beef industry struggled against drought and other challenges, National Beef lost money in 2013, 2014 and 2015,” according to the report.
A Jan. 9 request sent to a National Beef spokesman regarding the report was not answered. National Beef ranked No. 8 in MEAT+POULTRY’s 2017 Top 100 listing of meat and poultry companies, with sales of $7.2 billion, 8,100 employees and six processing plants.