Source: Susan Kelly, MEATINGPLACE, 4/22/19


Chicken producers are expected to be the largest beneficiaries of African swine fever due to expected significant shortages of protein on the global market, according to analysts at Stephens Inc.

“We think there could be increased export pull for chicken from international markets and a pivot domestically in feature activity from retailers and foodservice operators that could promote consumer switching down the protein ladder from pork to chicken,” the analysts wrote in a recent report to clients.

Chicken producers are able to ramp production the fastest of the three proteins, as it takes six weeks to grow a chicken to market weight once the chick hatches, they said. Chicken producers also are not vulnerable to the threat of ASF coming to the United States because the disease does not impact chickens.

Tyson Foods, Pilgrim’s Pride and Sanderson Farms are poised to gain from the dynamics, with Tyson and Pilgrim’s stock having the farthest to climb, the analysts predicted.

China has a ban on U.S. chicken stemming from the avian flu outbreak in 2015 but could lift it to combat food inflation. Tyson’s beef and chicken segments both should benefit from ASF given expectations for protein inflation and benign feed costs, the report said.

Pork margins may face pressure initially because gains in pork prices usually lag hog price increases, but the segment should benefit from very strong demand for U.S. pork as long as the disease stays out of the country, the analysts said.

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