Labor Is a Problem Around the World, Meat Supplier Says

(Bloomberg) -- The world’s largest meat supplier is finding that a shortage of workers are affecting operations in every developed nation, limiting production increases and raising costs.

The issue is more acute in the U.S. though it also impacts operations in Europe, Canada and Australia, with a lack of direct and indirect workers, Andre Nogueira, head of JBS SA’s U.S. division, said Thursday during the Brazilian company’s earnings call. 

“Labor shortages are holding back production growth,” he said. “This is a key issue for the industry.”

Staffing shortages aren’t necessarily cutting into existing production capacity, though the lack of workers is keeping JBS from expanding its output. JBS USA has a full team in pork and beef operations, though that doesn’t mean his division is delivering the same level of production using a similar number of employees as in the past, Nogueira said. Workers don’t accept Saturday shifts anymore. Labor shortages are also seen in the whole supply chain, affecting logistics.

JBS USA’s beef operational costs rose on more labor expenses and benefits in the third quarter, while its pork unit faced hurdles to hire truck drivers, the company said in its earnings statement. On chicken, production mix was less than optimal due to a lack of workers. In the U.K., JBS controlled companies faced hurdles to hire truck drivers as those from the European Union left following Brexit, adding to labor shortages in facilities.

“It’s structural adjustment in the meat industry,” Nogueira said.

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