Annual and Sustainability Report | 2019

Our Business
JBS USA

Sustainability:
Animal welfare

Ensuring the well-being of the livestock and poultry under our care is an uncompromising commitment at JBS USA. Animal welfare is embedded in the framework of our culture, and we continually strive to improve our welfare efforts through the use of new technologies and the implementation of standards that meet and exceed regulatory requirements and industry guidelines.

The Company’s animal welfare programs are often reviewed by animal handling and welfare experts at Universities across the globe. These lasting academic partnerships have assisted JBS USA in identifying and investing in upgrades to both its facilities and team member training programs.

Proper treatment of animals is addressed through Standard Operating Procedures (SOPs), in addition to verification and process improvements designed to promote animal welfare and product quality. Animals processed at JBS USA facilities are treated in accordance with national and local regulations, such as the U.S. Department of Agriculture (USDA) and Food Safety and Inspection Services (FSIS), Canadian Food Inspection Agency (CFIA) Meat Inspection, Buenas Prácticas Pecuarias en Producción de Pollo de Engorda de SADER y SENASICA, Council Regulation N˚1099/2009, Australian Animal Welfare Standards and Guidelines and Australian Standard for the Hygienic Production and Transportation of Meat and Meat Products for Human Consumption.

To continually improve the care and well-being of our livestock and poultry, we have set aggressive 2020 animal welfare goals. The goals are based on our JBS USA Animal Health and Welfare Scorecard that is part of our Sustainable Management System. The scorecard uses a combined 19 indicators, selected for their importance to the health and welfare of animals. The indicators are weighted on a 100-point scale across eight main areas of importance, including compliance, annual audits (internal and third-party), losses, priority indicators, investment, transportation, management and health.

From procurement and transportation to operations and quality assurance, every JBS USA team member is accountable for treating our animals in a humane and ethical manner. We have a zero-tolerance policy for abuse of any kind, and all team members are required to report any violations directly to management, which they may do anonymously. Team members or family farm and ranch partners who violate our Animal Welfare Policy and associated procedures are subject to disciplinary action, up to and including termination of employment, termination of a supplier’s contract and/or reporting to the government authority responsible for overseeing animal welfare.

The goal at JBS USA is a score of 90% or better on their Animal Health and Welfare Scorecard.

Management

JBS USA has created management structures that encourage accountability and promote proactivity on quality assurance and humane handling teams. Nearly every production unit has a full-time Quality Assurance Manager, Animal Welfare Manager or Animal Welfare Officer (AWO) who is responsible for overseeing the implementation of the animal welfare program, which includes facility assessments, training programs and ongoing monitoring. For beef and pork production facilities in the United States and Canada, this team member is a PAACO-trained humane handling specialist. In Australia, Quality Assurance managers are trained according to industry AWO skills and are Australia Livestock Processing Industry Animal Welfare Certification System (AAWCS)-approved.

In Europe at our Moy Park facilities, our AWOs at our poultry facilities are certified through Animal Welfare Training Ltd. In addition, all personnel handling chickens must have a certificate of competency (COC), which is an assessed qualification issued by the regional regulatory authorities: Food Standards Agency (FSA) in Great Britain or the Department of Agriculture, Environment and Rural Affairs (DAERA) in Northern Ireland. At our Tulip pork facilities our AWOs are accredited according to Bristol University or Livestockwise.

Each production facility has team members from processing, quality assurance, operations, procurement and human resources, who make sure that the policies and procedures required by the Animal Welfare Program are being followed, including annual training of all team members.

 

JBS USA Hyrum, UT, Beef Production Facility

Certificates and audits

All of our facilities are audited regularly to guarantee compliance with our animal welfare programs. Quality assurance personnel conduct daily audits to verify adherence to USDA, NAMI (North American Meat Institute) Animal Handling Guidelines, National Chicken Council (NCC) Guidelines, CFIA Meat Inspection Regulations, Buenas Prácticas Pecuarias en la Producción de Pollo En Engorda de SAGARPA y SENASICA, Council Regulation N˚1099/2009 standards on animal welfare and Australian Meat Industry Council (AMIC) Industry Animal Welfare Standards for Livestock and Processing Establishments, depending on region and protein. Government inspectors also monitor animal welfare practices daily to guarantee compliance with regulations.

Every production facility also undergoes annual third-party animal handling audits. If a deficiency is identified, immediate corrective action is taken and internal follow-up audits are scheduled until the issue is resolved. We share corrective action strategies across the Company so that all facilities can benefit from new knowledge and perspectives to drive continuous improvement in our approach to animal welfare.

In addition, we have implemented a video auditing system in most of our beef, lamb and pork production facilities. This allows us to conduct real-time internal auditing from a viewing room and provide team members with immediate feedback for improvement. Our video footage and process is audited remotely by an independent third party and alerts and daily summaries are provided to facilities for process improvement.

Livestock transporters are audited daily to verify adherence to JBS USA humane handling standards, NAMI Transportation Guidelines, CFIA Health of Animal Regulations Livestock Transport Requirements and Australian Standard for the Hygienic Production and Transportation of Meat and Meat Products for Human Consumption, depending on the region.

We also prioritize animal welfare standards within our supply chain. In the U.S., we require all of our partners who raise the cattle and hogs that we purchase to be Beef Quality Assurance (BQA) certified or Pork Quality Assurance Plus (PQA+) certified and site assessed and verify compliance by conducting third-party audits according to the BQA Feedyard Assessment and the Common Swine Industry Audit (CSIA). Our sow and finishing farms are regularly assessed by field managers, veterinarians and the Director of Animal Welfare. When necessary, corrective actions are outlined with caretakers and additional training is administered as needed. The Director of Animal Welfare and Animal Welfare Manager conduct second-party site assessments as part of the National Pork Board’s Pork Quality Assurance Plus (PQA+) program to verify that caretakers are providing care in accordance to industry standards. In addition to internal audits, JBS USA Live Pork participates in third-party animal welfare audits using the PAACO- certified CSIA tool.

In Australia, our feedlots are subject to annual third-party audits as part of the National Feedlot Accreditation Scheme (NFAS), which includes mandatory biannual internal animal welfare audits according to Australian Animal Welfare Standards and Guidelines for Cattle.

At Pilgrim’s, farms are visited and assessed weekly according to our Animal Welfare Program by field technicians. In the U.S., a subset of farms are audited by a PACCO-certified auditor according to NCC guidelines. Our Mexico complexes are compliant with the Federally Inspected Type (TIF), a voluntary food-quality certification of the Mexican government. In Europe, poultry farms are Red Tractor approved and meet or exceed Red Tractor, Bord Bia or equivalent welfare standards. Annually, an external auditor audits each farm to Red Tractor standards, which results in Assured Chicken Production (ACP) Certification. Our Tulip higher welfare hogs are raised according to Royal Society for Prevention of Cruelty to Animals (RSPCA) higher welfare standards and all the hogs supplied to Tulip are either Red Tractor, Quality Meat Scotland (QMS) or Red Tractor/QMS and RSPCA Farm Assured.

 

JBS USA Carriers Headquarters, Greeley, CO

Humane handling

JBS USA animal welfare programs include specific requirements and procedures to protect the health and welfare of livestock and poultry during transportation, unloading, handling and processing, as well as the safety of team members.

During transport and handling, there are standard procedures for animal handling and delivery that include both daily operations and emergency situations. Mandatory reporting and regular auditing are used to make sure that these procedures are being followed. Any practice during transportation and handling that could cause harm to the animal is a major failure and corrective actions are implemented immediately. Team members who work with live animals are carefully trained on proper handling techniques.

Quality assurance personnel at each JBS USA production facility conduct daily audits to ensure adherence to industry standards and government regulations. Animal welfare performance is shared weekly with all facilities and senior management to guarantee constant and consistent oversight, sharing of best management practices and corrective actions, if necessary.

In addition to properly training team members, the design and maintenance of pens is critical to low-stress handling. Pens are designed to ensure smooth livestock flow along with team member training to identify and correct potential problems.

In the United States, beef and pork production facilities implement animal welfare programs that align with the NAMI guidelines and are compliant with USDA FSIS Directives 6,100.1, 6,900.2 and 9 CFR Part 313. Compliance with our programs is verified through daily and third-party audits. Ourall facilities have also voluntarily implemented the USDA’s recommended program for animal handling: “A Systematic Approach to Humane Handling and Slaughter.”

In Canada, the beef production unit implements animal welfare programs that align with NAMI guidelines and comply with Canadian Food Inspection Agency (CFIA) Meat Inspection Regulations.

In Australia, the production facilities implement animal welfare programs that comply with the AMIC Industry Animal Welfare Standard – Livestock Processing Establishments and The Australian Standard for Hygienic Production and Transportation of Meat and Meat Products for Human Consumption AS4696.

Regarding Pilgrim’s chickens, the U.S. animal welfare programs exceed or meet PACCO-certified NCC Guidelines for our breeders, hatcheries, broilers and at slaughter. Our Mexico complexes are compliant with the Federally Inspected Type (TIF), a voluntary food-quality certification of the Mexican government. Our facilities in Europe are compliant with Council Regulation N˚1099/2009 standards on animal welfare. In two poultry production facilities in the U.S. and all production facilities in Europe, controlled atmospheric stunning methods are used, and the chickens are not handled before being stunned.

Pilgrim’s Tulip higher welfare supply chain raises hogs according to the RSPCA higher welfare standards as a minimum and has been awarded the highest ranking, Tier 1, by the global ‘Business Benchmark on Farm Animal Welfare’ (BBFAW) for its animal welfare performance, through an independently commissioned private review. Tulip approved processing facilities also process lambs. Handling of hogs and lambs is done using low-stress techniques and facilities are maintained to ensure appropriate animal flow. Controlled atmospheric stunning is utilized for all hogs. Animal welfare practices at production facilities are in compliance with Council Regulation N˚1099/2009 standards which are monitored daily by Food Standards Agency (FSA) inspectors.

Pilgrim's Sanford, NC, Family Farm Partner Barn

Housing

JBS USA is committed to providing the animals under its care with comfortable and safe housing that meets their needs. Housing is key to protecting and improving the health and well-being of our animals.

The Company’s facilities meet or exceed industry guidelines to make sure that the animals are comfortable and safeguarded from extreme weather events, predators and vermin. In beef and pork production facilities, pen stocking rates are set according to NAMI Animal Handling Guidelines, CFIA Meat Inspection Regulations and AMIC Industry Animal Welfare Standards, and livestock have access to clean water at all times.

Cattle in JBS Australia feedlots are housed in groups in open-pen, dirt lots. Pen stocking rates meet or exceed industry standards and are based on the animal’s expected final weight. Cattle have access to an unlimited supply of clean water and are fed twice daily. The pens are sloped for proper drainage during winter months and wet periods to provide cattle a dry place to lie down and reduce mud in the pens. For feedlots that are located in regions with extreme weather, shade is provided to prevent heat stress, and bedding is supplied to provide a dry and warm place to lie down in winter months. Most of our feedlots are also equipped with a sprinkler system to reduce dust.

The hogs raised in the U.S. are housed indoors and health and welfare are prioritized. Sows are provided with unlimited access to clean water and are fed a nutritionally balanced diet based on life stage and individual body condition. Weaned and growing hogs in the nursery and finishing stages of production are provided with unlimited access to clean water and feed. Specific SOPs for maintaining animal comfort and housing are further defined in the Live Pork Production Manuals. Climate-controlled ventilation systems are expected to be maintained to promote animal comfort, control humidity, deliver quality air and maintain desirable temperature according to hog size and life stage. One hundred percent of U.S. owned sows are housed in open pen systems.

Pilgrim’s contracts with more than 4,900 family farm partners who raise breeder hens and broiler chickens. From the farmers’ barns to the Pilgrim’s production facilities, we require our team members and family farm partners to provide proper care to our chickens. Our family farm partners who raise our breeder hens which produce hatching eggs use fresh shavings as bedding material in hen houses. These shavings are clean, absorbent, free of sharp objects and resistant to fungal growth. Across all of our farms, our service technicians visit our breeders weekly to monitor chicken health. At our hatcheries, the temperature in the chick-holding room is targeted for chick comfort based on the chicks’ internal temperature. We monitor and document temperatures on an hourly basis, making any needed changes as soon as possible. We make sure our chicks have enough space and are not under direct air flow to prevent overheating. Before placing any chicks at a farmer’s broiler farm, we go through our Pre-Placement Checklist to make sure the farm and houses are neat and orderly, ventilation is ideal for brooding, ammonia levels are appropriate and lighting and bedding are in line with program requirements. In addition, in Europe, we are pioneering industry-leading initiatives to continually improve the housing of our poultry by providing environmental enrichment, windows and provision activities, such as perches and bales.

Pilgrim’s Tulip higher welfare supply chain contracts with farmers who raise all sows according to the RSPCA higher welfare outdoor bred standards as a minimum. Sows are free from confinement during gestation and farrowing. Hogs are born outdoors and are provided with shelter, where they remain until they are weaned at approximately 28 days of age. All of hogs in higher welfare supply chain have permanent access to environmental enrichment. Tulip also sources hogs from independent farm partners. Those partners meet, and often exceed, the requirements of the Red Tractor or QMS assurance schemes and must provide hogs with permanent access to environmental enrichment. Tulip also requires that sows are housed in open pen systems during gestation.

Tulip Higher Welfare Hogs

Animal health

At JBS USA, all antibiotics are used under the supervision of licensed and accredited doctors of veterinary medicine and only for the purposes of preventing, controlling or treating disease, rather than growth promotion or feed efficiency. The Company’s antibiotic policies also requires written veterinary permission before the use of any antibiotics, enhanced record-keeping and tracking of all antibiotic use and training programs for JBS USA team members to guarantee compliance with our comprehensive health and disease-prevention programs, including animal husbandry, hygiene, monitoring and vaccination.

Pilgrim’s does not administer antibiotics for routine medical treatment and is focused on producing healthy chickens through good hygiene and husbandry practices. Any use of antibiotics is strictly governed by national regulations and requires authorization by the overseeing doctor of veterinary medicine or veterinary surgeon who care for the poultry. Any medication used is licensed by the FDA or U.K. Veterinary Medicines Directorate and undergoes intense scrutiny before being approved for use.

In the U.S., Pilgrims’ has been antibiotic free in all Company hatcheries since 2016 and is fully compliant with the FDA Guidance 209 and 213 VFD rule. Any antibiotic use is under the strict guidance of the Company’s licensed, USDA accredited and board certified veterinarians and is strictly for disease prevention, control or treatment. The Pilgrim’s antibiotic policy is reviewed annually.

In Europe, records of medications used on farms are inspected by the auditors of the Red Tractor Scheme and by the local authority Animal Health inspectors as legally required. In addition, Pilgrim’s Moy Park has an Antimicrobial Stewardship Forum focused on the education of poultry producers in antimicrobial resistance and best practices to reduce antimicrobial usage and collects comprehensive data to give the poultry industry and regulators a clear picture of poultry-usage trends. Pilgrim’s Moy Park established a Food Safety Forum and Antibiotics Stewardship Forum, to ensure that our chickens are healthy and our products are safe. These forums include external experts who assist us with the latest scientific developments.

Pilgrim’s Tulip has introduced an industry leading initiative in our own higher welfare farming supply chains to reduce the need for antibiotic use by improving hog management and health. We have voluntarily implemented stringent controls on the use of Critically Important Antibiotics (CIA’s). Since implementing our antibiotic stewardship strategy in 2013, we have reduced use by more than 70 percent. Antibiotic usage within our own higher welfare supply chain has been consistently below the U.K. swine sector target for 2020. Tulip’s independent supply partners, as part of the U.K. swine industry, have achieved the Responsible Use of Medicines in Agriculture Alliance (RUMA) target for the responsible use of antibiotics since its start in 2017.

As part of our long-standing commitment to safeguard the welfare of our livestock and poultry, we treat all sick animals with antibiotics if necessary and then remove them from our antibiotic-free/NAE, natural and organic programs. We do not allow sick animals to suffer.

The commitment by JBS USA to reducing antibiotic use in raising animals is limited by the fact that it is still not possible to fully replace these medications to treat and prevent diseases. JBS USA veterinary and nutrition teams continue to work closely with companies that produce alternative compounds, as well as with universities and private researchers, ensuring that the Company is on the leading edge of innovation in this area.

Veterinarians work to mitigate or eliminate pain for the animals. In the U.S. the procedures performed on our hogs prevent injuries later in life and improve meat quality and include tail docking and castration and are consistent with our animal welfare program. At JBS Australia feedlots, we work diligently to purchase cattle that have been pre-conditioned, which means that cattle have been previously castrated and disbudded (if necessary) at a young age, vaccinated and weaned before arriving at our feedlots.

At Tulip, routine tail docking is not performed and is only permitted with veterinary approval and castration is not permitted. Tulip continues to lead the industry in research to advance animal welfare, for example, our current research includes a project examining hog behavior and its impact upon tail biting. The objective is to understand more about causal factors associated with tail biting and how tail docking can be reduced.

JBS USA Carriers Livestock Trailer

Transportation

As a component of the animal welfare programs at each production facility, livestock transporters are audited daily to verify adherence to JBS USA humane handling standards, and, depending on the country, the NAMI Transportation Guidelines, CFIA Humane Transport Guidelines, Australian Welfare Standards and Guidelines – Land Transport of Livestock and RSPCA, Red Tractor or QMS.

U.S. beef and pork production facilities also require all transporters to present documentation that demonstrates their understanding of and adherence to the JBS USA guidelines and in the U.S. certification with Beef Quality Assurance Transportation (BQAT) the Canadian Livestock Transport (CLT) and the National Pork Board’s Transport Quality Assurance (TQA) programs. Improper handling of livestock results in immediate corrective actions and can result in the transporter being permanently banned from delivering livestock to JBS USA facilities in the future.

In Europe, our pork and approved lamb production facilities require that livestock are moved in their social groups, and hog trailers are equipped with lifting decks to make loading as stress free as possible. Trailers are bedded with straw and in the summer months extra drinking water is provided. We monitor transport time, current average journey times are four hours and our position is that no animal should be in transit to a Tulip production facility for longer than eight hours.

JBS USA Carriers business is responsible for providing safe transportation to more than 1.5 million cattle each year. Delivering cattle in a manner that promotes humane handling during loading at the feedyard, a safe journey for both drivers and animals and minimal stress on cattle during unloading at our facilities is our priority. JBS USA Carriers takes pride in the safe and efficient transport of animals to production facilities across the country, and our drivers bring a passion for the industry to work with them every day.

JBS USA Carriers, in conjunction with Five Rivers Cattle Feeding (JBS USA’s largest producer partner) and both of their animal welfare teams, provides drivers with animal-handling and safety training. The training materials are based on the BQAT program, which is widely recognized as the industry standard for truck driver training.

During transport at Pilgrim’s, we work to protect our chickens from temperature extremes and provide them with adequate ventilation. During cold weather, we add side and front panels to the transport cages to keep chickens warm. During the summer months, we reduce the number of chickens per cage, keep them shaded and provide fans and misters to keep them cool and minimize heat stress. We strive to minimize the amount of time chickens spend in cages, consistent with regionally appropriate animal welfare practices. We also monitor handling and transport animal welfare metrics of our chickens.

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