Morgan Stanley sees limited impact from EU Brazil protein ban

Investing.com - The European Union officially excluded Brazil from its list of countries compliant with antimicrobial usage regulations on Thursday, according to Morgan Stanley. The EU will halt imports of animal products from Brazil including beef and poultry effective Sept. 3, 2026.

The European Commission stated it had not received sufficient information confirming Brazil implemented required compliance measures. The EU had already excluded Brazil from the list of authorized exporters in draft regulation on May 12. Brazilian government continues to negotiate with the bloc to reverse the decision, news sources indicate.

The EU accounts for 3.5% of last-twelve-months volumes and 5.3% of value for Brazilian beef exports, paying a roughly 50% price premium versus average. In poultry, the EU represents 2.4% of volumes with also a roughly 50% price premium versus average.

Morgan Stanley sees limited impacts across covered stocks. Minerva (BEEF3) shows the most exposure to Brazil beef export volatility at roughly 38% of last-twelve-months revenues, but the EU accounts for only roughly 9% of total beef exports, implying consolidated revenue exposure closer to roughly 3%. For JBS and MBRF, reported Europe exposure stands at 9% and 5% of annual revenues respectively, but Brazil-to-EU export exposure is lower.

Based on SECEX data, Morgan Stanley estimates Brazil beef and poultry exports to EU at only roughly 0.5% of consolidated revenues for both JBS and MBRF. The firm views a potential ban on Sept. 3 as having limited-to-no financial impacts in its coverage, particularly considering potential offsets.

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