Thanks for the response. I've also looked into the grayscale function but have not been able to batch process the transformation of individual jpg grids to grayscale geotiffs.
I created a sample mosaic of 5 of the 400 jpgs and inserted a grayscale function through the image analysis window. I then used right click -> export data. This successfully created a 1-band geotiff. The problem is that this merges the images into a single raster, but I want the result to be a collection of 400 1-band geotiffs with the same extents as the initial 3-band jpgs, not one huge geotiff. Can you advise? Maybe I need a Python script to average the three bands?