Often times when you are reading the news, you have different opinions about the affects of something negative. For exaample in early June, the meatpacking company JBS SA had to cancel shifts because of a cyberattack. The different opinions reflects how much meat you eat or do not eat. For those who do not eat meat, the opinion might have been good, people can eat plant based products. For those who eat a lot of meat, the opinion might have been somebody is targeting our right to eat meat or meat prices will go up again.

In an article by Tom Polansek and Mark Wienraub of Reuters, one of the largest company in the meatpacking industry was hit by a cyberattack. At the time, people were not positive where the attack came from, but it is important because the meat packing industry is a very concentrated one with 5 companies controlling the market. The largest meat packer in the world is headquartered in Brazil and is called JBS SA. In the US its brands include Swift and Pilgrim’s Pride and looking on its website has another 25 plus names. If you bought beef or chicken or pork in the past, you may have bought a JBS brand.

JBS runs meatpacking plants and controls 20% of the slaughter capacity for cattle and hogs. When a plant’s shift has to be cancelled for a couple days, the supply is not likely to push up prices, however anything longer than a couple of days, expect prices to rise because of supply and demand. As the summer begins, one expects meat consumption to rise

Linking to dividend paying stocks, companies such as JBS operated around the world and can move product from one country to another to keep supply moving. In terms of logistics it is an interesting thing to watch and understand. The bigger issue is consumption of meat and whether non meat substitutes will take a larger share or not. Retail companies will supply whatever consumers demand, the suppliers to the retail then have to understand and try to ensure supply and demand meet at profitable levels. Often times many industries are more concentrated than consumers tend to believe or expect, the concentration tends to be good for the companies which is good as an investor.

There are more questions than answers, till the next time – to raising questions.