U.S. Protein Markets Diverge: Beef Prices Stable While Pork and Chicken Weaken, BofA Says

The U.S. animal protein market is showing divergent trends, with beef prices remaining relatively stable over the past four weeks while pork and chicken markets face significant pressure from oversupply and shifting demand, according to a new monthly monitor from Bank of America.

Beef Market Holds Firm Despite Margin Pressure

Beef prices demonstrated stability, though processors faced continued margin challenges. According to data from the United States Department of Agriculture (USDA), trailing four-week boxed choice beef prices averaged $368 per hundredweight, a slight decrease of 0.7% year-over-year, while select beef prices rose 1.0% to $354 per hundredweight.

Despite firm prices, beef packer margins remained deeply negative, averaging -$251 per head on a trailing four-week basis, a wider loss compared to -$177 per head in the same period last year, as reported by Hedgers Edge. A potential long-term tailwind for processors is the USDA's planned phased reopening of the U.S.-Mexico border for cattle imports, beginning August 24. Tyson Foods (TSN) noted on its recent earnings call that while resumed imports should improve cattle availability over time, it will take at least a year for the impact to materialize and will not be enough on its own to offset current cattle cycle headwinds.

Pork and Chicken Prices Weaken on Supply Glut

Pork and chicken markets are contending with oversupply, leading to significant price declines. Trailing four-week boxed pork prices fell 12% year-over-year to $102 per hundredweight, while lean hog spot prices dropped 9.3% to $98 per hundredweight, per USDA data. June cold storage data indicated that pork inventories, particularly hams and bellies, were building counter-seasonally, signaling weaker-than-expected spring demand from export and foodservice channels.

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The chicken market is similarly pressured by rising production that is outpacing demand. Key figures show:

• Ready-to-cook pounds were up 3.1% year-over-year on a trailing four-week basis.
• Egg sets, a leading indicator of production, rose 1.8% year-over-year.
• This supply growth continues to weigh on chicken pricing, especially for breast meat.

Mixed Outlook for Packaged Meats

The trends in raw protein costs are creating a mixed picture for packaged meat producers. While lower pork costs are providing some margin relief, weakness in categories like bacon is offsetting more stable performance in sausage and sliced lunchmeat. Conversely, elevated beef trim costs continue to pressure margins for beef-based products.