Chicken Prices Are Inflation Hedge

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Patrick Thomas, Chicken Prices Are Inflation Hedge; Rising demand and lower animal-feed costs help sales for meatpackers. Wall Street Journal, May 13, 2024, at page B1.
https://www.wsj.com/business/chi ... tion-hedge-669738e9

excerpt in the window of print: Shoppers trade down to chicken from pricier meat cuts when prices rise.

Quote:

"Stung by the rising prices of beef, diners are buying more wings at fast-food chains and frozen tenders at grocery stores. Meat giants like Tyson Foods and Pilgrim's Pride, in turn, are bringing in higher profits from poultry as demand rises for their products and costs fall for livestock feed." paragraph 2.

"The share of US consumers' incomes spent on food is at a three-decade high, prompting people to shift spending toward cheaper, private-label items and cut back on some well-known brands. * * * " paragraph 4.

" * * * The retail price of ground beef was up about 12% in March compared with a year ago, according to federal data." paragraph 6. (The article did not give the figure for chicken, but a figure in print shows that both chicken and beef prices rose in the past year, but beef much more steeply (but only 12% after all).)

"Working in the chicken industry's favor is falling grain prices. Tyson said it saved about $190 million in its poultry business on declining feed-ingredient costs in its most recent quarter, according to a securities filing." paragraph 17.

"Corn and soybeans are two of the main livestock-feed ingredients that chicken companies supply to farmers. Corn prices are down more than 20% over the past 12 months, while soybeans are down roughly 15%, according to FactSet." paragraph 18.

"Chicken prices aren't likely to remain depressed for long. * * * [due to supply and demand law in economics]" paragraph 19.