Latin America Food Manufacturers: Protein & Livestock Weekly, US Beef: Government Aid Could Delay a Sustained Industry Recovery

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Latin America Food Manufacturers: Protein & Livestock Weekly, US Beef: Government Aid Could Delay a Sustained Industry Recovery

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01 Jul 2026 12:44:24 ET │ 22 pages

Latin America Food Manufacturers

Protein & Livestock Weekly. US Beef: Government Aid Could Delay a

Sustained Industry Recovery

Renata Cabral AC

CITI'S TAKE +55-11-4009-7561

The US Department of Agriculture announced it will provide up to renata.cabral@citi.com

US$500mn to support the operation of small/medium-sized meatpackers, Luis Felipe Terzariolwhile excluding the country’s largest beef processors (Tyson, JBS, Cargill,

and National Beef) from the aid package. In our view, the key implication is +55-11-4009-3564

less about the aid sustaining competition amid an already tight cattle luis.terzariol@citi.com

supply, which could add marginal pressure to cattle prices, and more about

its potential to delay capacity rationalization, a lever we view as critical for a

sustained recovery in industry profitability (link). Smaller packers represent

only ~15% of the US processing market, suggesting a relatively limited

impact on cattle prices from their increased competitiveness. However, the

financial support could allow smaller plants to remain active for longer,

slowing the much-needed capacity adjustment in the sector. As a result, as

capacity and cattle availability asymmetry lingers, industry margins should

remain pressured for longer.

What Has Not Changed: The Cattle Shortage Remains the Core Issue. The

fundamental industry backdrop remains unchanged. The US beef industry

continues to face historically tight cattle availability, with the national cattle herd

near multi-decade lows and industry utilization rates still below levels typically

associated with attractive profitability.