Volatility risk in meat, feed and crude oil prices, and livestock diseases

「Business profit was ¥2,155 million, compared with a business loss of ¥2,670 million in the same quarter of the previous year, due to the decline in live cattle prices in Australia's beef business, improved profitability from increased sales volumes, and strong performance in Turkey's chicken business, among other factors.」

「Revenue fell 10.9% year on year to ¥75,231 million, despite higher revenue from the processed foods business in the Americas, as selling prices in the beef business declined due to stagnant global demand. Business profit improved due to higher volumes in the processed foods business in the Americas and more stable raw material prices, but the decline in selling prices in the beef business resulted in a business loss of ¥254 million, compared with business profit of ¥343 million in the same period of the previous year.」

「In the domestic business, the production division struggled under the continuing impact of persistently high feed and energy prices since the cumulative third quarter, despite focusing on cost reductions. The company also worked to secure volumes by strengthening external procurement and improving productivity, but its own processing volume of domestic pork declined due to the site-restructuring plan, while domestic chicken shipments declined because of avian influenza outbreaks.」

「In domestic pork and beef, the company's own processing volume declined due to a site-restructuring plan, while shipments of domestic chicken declined because of the impact of avian influenza outbreaks.」

「The business environment changed significantly as raw material and energy costs rose and the yen's sharp depreciation continued, and unprecedentedly challenging conditions persisted.」

「The industry continued to face unprecedentedly challenging conditions as raw material prices rose further and energy procurement costs increased due to soaring crude oil prices.」

「The industry continued to face unprecedentedly challenging conditions, including declining foodservice demand due to prolonged states of emergency and priority preventive measures, and higher costs resulting from soaring raw material prices.」

「The industry continued to face an uncertain outlook, including prolonged weakness in foodservice products due particularly to declining demand from the foodservice sector amid extended states of emergency and priority preventive measures, as well as higher costs resulting from stronger global demand for raw materials and soaring grain prices. However, signs of improvement have begun to emerge in some areas.」

「In the sales division, the market for foodservice and wholesale customers continued to face challenging conditions due to the impact of COVID-19. Although demand for at-home dining, centered on mass retailers, remained firm, sales of higher-priced products, particularly beef, struggled because of soaring imported meat prices and consumers' cost-saving preferences, resulting in lower profit.」

「In the Production Division, profit declined despite efforts to improve internal costs, as the division was significantly affected by soaring feed prices.」

「Profit in the Australian business fell below the previous year's level because sourcing conditions remained weak due to persistently high cattle procurement prices and declining procurement volumes, while selling prices, particularly in China, also remained weak.」

「In Australia, sourcing conditions deteriorated as cattle procurement prices remained high and procurement volumes declined, while selling prices, particularly in China, remained weak. In Uruguay, cattle procurement prices also failed to fall and the unit selling price of exports to China remained weak, resulting in a year-on-year decline.」

「Profit in the Australian business fell below the previous year's level because cattle procurement prices remained high and procurement volumes declined as sourcing conditions deteriorated in Australia, while selling prices, particularly in China, also declined. In Uruguay, cattle procurement prices failed to fall, and the unit selling price of exports to China declined.」

「The domestic and overseas production and livestock-rearing businesses that supply these meats are affected not only by commodity prices but also by fluctuations in feed and crude oil prices. In addition, if livestock diseases such as BSE, avian influenza, foot-and-mouth disease, porcine epidemic diarrhea, classical swine fever or African swine fever occur, or if safeguards, meaning emergency import restrictions, are activated, the livestock market as a whole and the performance and financial position of the Group may be affected.」

「In the production division, efforts to improve livestock-rearing results and efficiency and reduce labor requirements at operating sites were outweighed by weak domestic chicken prices and higher labor costs, resulting in lower profit. In the sales division, the company worked to strengthen proposals for branded meat and value-added products, as well as to secure and propose a stable supply of products from a broad range of countries of origin in light of price volatility risks arising from livestock diseases in Japan and overseas and the impact of US-China trade negotiations. However, overall profit declined because domestic and imported beef struggled amid high procurement prices, while increased supplies of imported pork and domestic chicken depressed domestic pork and chicken selling prices.」

「The production division worked to improve livestock-rearing results and introduce equipment to improve efficiency and reduce labor requirements at operating sites, including through the Smart Pig Farming Project, but profit fell below the previous year's level due to weak domestic chicken prices and higher labor costs.」

「The industry continued to face a challenging operating environment, including higher prices for some raw materials, rising labor and logistics costs amid labor shortages, intensified competition, and livestock diseases in Japan and overseas.」

「The industry continued to face a challenging operating environment, including higher prices for some raw materials, rising labor and logistics costs amid labor shortages, intensified competition, and livestock diseases.」

「Profit declined. The production division worked to improve livestock-rearing results and increase the proportion of branded meat, as well as to raise processing capacity through the introduction of the latest equipment, but the significant impact of declining prices for domestic pork and chicken and higher feed prices resulted in lower profit.」

「Profit declined. The production division worked to improve livestock-rearing results and increase the proportion of branded meat, as well as to raise processing capacity through the introduction of the latest equipment, but the significant impact of declining prices for domestic pork and chicken and higher feed prices resulted in lower profit.」

「Profit declined, despite efforts in the production division to improve productivity and increase the proportion of branded meat, due to declining prices for various livestock species and higher feed prices.」

「In Australia, procurement prices fell as conditions for sourcing live cattle improved, but the significant impact of declining beef selling prices resulted in a year-on-year decline.」

「In Australia, procurement prices fell as conditions for sourcing live cattle improved, but the significant impact of declining beef prices resulted in a year-on-year decline. As a result, for the cumulative third quarter of the fiscal year, the Overseas Operations Division recorded sales of ¥193,093 million, up 17.6% year on year, and an operating loss of ¥2,922 million, compared with an operating loss of ¥352 million in the same period of the previous year.」

「Profit declined year on year. The Asia and Europe business performed well in Turkey's poultry operations, but this was more than offset by higher meat procurement prices in the UK and higher chicken procurement prices for processed food manufacturing in Thailand. In the Americas business, gross profit declined due to higher meat procurement prices. In Australia, procurement prices fell as conditions for sourcing live cattle improved, but the significant impact of declining beef prices resulted in a year-on-year decline. As a result, for the cumulative second quarter of the fiscal year, the Overseas Operations Division recorded sales of ¥125,385 million, up 14.8% year on year, and an operating loss of ¥2,528 million, compared with an operating loss of ¥599 million in the same period of the previous year.」

「The industry continued to face a challenging operating environment, as prices for some raw materials rose due to supply shortages, while labor and logistics costs increased amid labor shortages and competition intensified.」

「Although raw material prices showed signs of stabilizing in the industry, the business environment remains difficult due to the domestic meat market turning soft, rising logistics costs amid labor shortages, and intensifying sales competition, among other factors.」

「The Australian business reported lower profit as the impact of higher cattle procurement prices continued.」

「The Australian business reported lower profit, primarily due to the sharp rise in cattle procurement prices. As a result, revenue for the Overseas Business Division in the cumulative second quarter of the fiscal year was ¥109,225 million, down 15.7% year on year, while operating loss was ¥599 million, compared with operating profit of ¥3,514 million in the same quarter of the previous year.」

「Although raw material prices showed signs of stabilizing in the industry, the business environment remained difficult due to the domestic chicken market turning soft, rising logistics costs amid labor and vehicle shortages, and intensifying sales competition, among other factors.」

「The Group primarily handles meat and processed meat products. Because meat is used not only in meat sold for consumption but also as an ingredient in ham, sausages, processed foods and other products, the Group is exposed to risks from fluctuations in livestock prices.」