Ben Mayhew

Ben Mayhew asked about the primary profit opportunities for the agribusiness segment in 2026 compared to 2025, and the conditions necessary for their realization. He also sought an update on the ethanol business's momentum in Q1 2026, including year-to-date Board Crush, inventory levels, and profit expectations for the year.

Answer

President and CEO Bill Krueger highlighted increased certainty in global grain export policy, higher nitrogen application needs for 2026 acres, and continued biofuels policy support (RVOs) as key profit drivers for agribusiness. For ethanol, Bill Krueger noted Q1 2026 Board Crush was slightly stronger than expected, with robust export and domestic fundamentals. Executive Vice President and CFO Brian Valentine added expectations for sustained high export demand, seasonal summer driving uplift, the full-year impact of plant ownership, and 45Z tax credits projected at $90 million-$100 million for the full year.

Ben Mayhew inquired about the momentum of the ethanol business in Q1 2026, specifically regarding board crush, inventory levels, and the profit outlook for the year.

Answer

President and CEO Bill Krueger noted stronger-than-expected Q1 board crush, despite higher corn basis and natural gas costs in some areas, with strong export and domestic fundamentals. EVP and CFO Brian Valentine added that Q1 is seasonally low but anticipates high export demand, seasonal uplift from summer driving, the full-year impact of plant ownership, and expected 45Z tax credits of $90-$100 million for the full year.

Ben Mayhew asked to quantify the headwind Seara faced in Q3 due025 due to the China-EU export bans on chicken and the expected recovery pace. He also sought clarification on the beef cycles in Brazil and Australia, specifically how they offset pressures in the U.S. market, with Brazil's cycle tightening first and Australia providing a longer-tail hedge.

Answer

Gilberto Tomazoni (Global CEO, JBS) explained that the lifting of China-EU bans is a huge positive for Seara's profitability, especially for premium breast and wing exports, and for optimizing carcass value (feet and paws), which will increase average prices and reduce pressure on other markets. He confirmed that increased livestock prices in Australia and Brazil are more than compensated by strong export demand, with Australia's volume sold out and Brazil's market remaining strong despite some herd reduction. Wesley Batista Filho (CEO, JBS USA) added that reduced U.S. beef exports directly correlate to stronger export volumes for Australia and Brazil, minimizing the U.S. beef cycle impact.

Ben Mayhew asked for a quantification of the headwind SEARA faced in Q3 2025 due to the China-EU export bans on chicken and the expected recovery pace. He also requested clarification on the beef cycles in Brazil and Australia, specifically how they act as offsets to pressures seen in the U.S. market.

Answer

Gilberto Tomazoni, Global CEO of JBS, explained that the lifting of China and Europe bans significantly impacts SEARA's profitability by allowing access to premium markets for breasts and wings, reducing pressure on other markets, and generating extra revenue from feet and paws. He noted that while quantifying the exact impact is difficult, it is very important. He also confirmed that strong demand for beef in Australia and Brazil helps offset U.S. beef cycle pressures, with Brazil's cattle availability still high despite some reduction.

Ben Mayhew asked for an outlook on the food segment for the next few months, following commentary about weakness exiting Q3 and into Q4. He also inquired about the expected timeline of triggers that should propel California LCFS credit values higher, given their general stability at weak levels.

Answer

Randall Stuewe (CEO) explained that tariff volatility caused customer delays in Q3, particularly for hydrolyzed collagen peptides, but expects a stronger Q4. He noted continued rebound in the hydrolyzed collagen business and growing repeat orders for NexTIDA products. Robert Day (CFO) attributed weak LCFS values to a delay in GHG reduction obligation implementation, which built up a large credit bank. He expects the supply and demand to balance and LCFS credit premiums to see steady increases sometime in 2026.

Ben Mayhew asked for an outlook on the food segment for the next few months, following commentary about weakness exiting Q3 and into Q4. He also inquired about the expected timeline of triggers that should propel California LCFS credit values higher.

Answer

CEO Randall Stuewe attributed Q3 weakness in the food segment to tariff volatility and customers drawing down domestic inventories, expecting a stronger Q4 rebound and continued growth in hydrolyzed collagen and new NexTIDA products. CFO Bob Day explained that LCFS credit values have been stable at weak levels due to a large credit bank from delayed GHG reduction obligations, expecting a more balanced supply/demand and steady increases in LCFS credit premium sometime in 2026.

Inquired about the strength and outlook for domestic protein demand in Brazil, and the broader impact and future outlook for lower grain costs across the portfolio.

Answer

The company is very optimistic about Brazilian domestic demand, which has grown significantly due to price elasticity, and they are meeting it with innovation in value-added products. The key factor for future margins is the supply-demand balance; with restricted chicken supply and stable grain prices expected, the outlook is positive, though subject to normal seasonality.