JBS Streamlines US Operations with Plant Closures Amid Beef Sector Challenges

Meat processing giant JBS is shutting down two of its United States facilities, a move that will impact approximately 2,000 positions. The closures, announced on Friday, June 12, affect a beef production plant in Souderton, Pennsylvania, and a value-added processing site in Memphis, Tennessee.

Production from these locations will be redistributed across other JBS facilities. JBS USA, the American arm of the Brazil-based company, stated that these closures are part of a comprehensive strategy aimed at modernization, growth, and improving long-term competitiveness.

According to data provided to Just Food, the Souderton and Memphis sites employ 1,784 and 208 workers, respectively. The company noted that affected employees will have the opportunity to apply for open positions at other JBS locations, though it did not specify the total number of available roles.

These closures occur as the world’s largest meat processor grapples with mounting losses in its US beef division, driven largely by tightening cattle supplies. Adjusted EBITDA losses for the US beef segment climbed to $267 million in the first quarter, compared to a $100 million loss the previous year, with margins dropping to negative 3.7% from negative 1.6%.

In May, Group CEO Gilberto Tomazoni informed analysts that the first-quarter environment for US beef remained “very difficult,” with adjusted operating income losses increasing to $329 million from $158 million. Despite these losses, sales for JBS Beef North America grew by 11.6% to $7.17 billion during the first quarter, a rise primarily attributed to price increases stemming from supply and demand dynamics.

This is not the first recent reduction; in February, JBS shuttered a case-ready production facility in Riverside, California, resulting in over 300 job losses. Wesley Batista Filho, CEO of JBS USA, stated that by making “difficult adjustments where needed” and investing in growth areas, the company is building a more resilient organization, adding that the company remains confident in its long-term trajectory.

Simultaneously, JBS-majority-owned Pilgrim’s Pride is investing $75 million to expand and modernize its poultry plant in Ellijay, Georgia. This project is designed to increase harvesting and portioning capacity and diversify the mix of boneless chicken products. Expected for completion in the third quarter, the expansion will specifically support Pilgrim’s presence in the US foodservice sector.

As part of this strategic investment, Pilgrim’s will close the aging harvesting section of its Chattanooga, Tennessee plant, while maintaining its deboning infrastructure. JBS confirmed that of the 1,000 employees at the Ellijay site, 346 are impacted by the closure, while 764 will remain at the Chattanooga facilities.

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