Latin America Food Manufacturers: Protein & Livestock Weekly, 3Q26 Kick-Off on Protein Profitability

Research evidence excerpt

Latin America Food Manufacturers: Protein & Livestock Weekly, 3Q26 Kick-Off on Protein Profitability

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14 Jul 2026 18:18:28 ET │ 22 pages

Latin America Food Manufacturers

Protein & Livestock Weekly. 3Q26 Kick-Off on Protein Profitability

CITI'S TAKE

Renata Cabral AC

As we enter 3Q26, protein trends remain divergent. Key messages: (1) US +55-11-4009-7561

beef remains the primary earnings headwind, with quarter-to-date spreads renata.cabral@citi.com

down -520bpsYoY and -20bpsQoQ, pressured by constrained cattle

availability in the region, with a meaningful recovery unlikely before 2029. Luis Felipe Terzariol

(2) Brazil domestic beef margins maintained positive momentum despite +55-11-4009-3564

the tighter cycle, up +220bpsQoQ and +350bpsYoY. (3) Brazil domestic luis.terzariol@citi.com

poultry profitability remains solid, with spreads broadly stable YoY (-25bps)

and up +120bpsQoQ, supported by lower input costs. Still, increased pork

affordability (-33.3%YoY) remains an important factor, as it could

encourage protein substitution and limit poultry pass-through flexibility.

Overall, pressure remains concentrated in US beef, while China-related

uncertainty warrants cautious stance on near-term Brazil beef results.

US Beef: Challenging. Cattle Availability Still the Main Bottleneck. US beef

margins remained under pressure in early 3Q26 (-520bpsYoY; -20bpsQoQ), as cattle

prices (+4.9%YoY) continued to outpace beef pricing (-0.4%YoY). With cattle supply

constrained and processing capacity still elevated, we see limited scope for a

meaningful recovery before 2029. Moreover, a reopening of the Mexican border

could provide some relief to beef processors’ profitability, but it is unlikely to

materially alter the supply outlook in the near-term.