Pilgrim’s Pride Could Boost Margins As Beef Hits Record $6.67 On 1951 Herd Low
U.S. ground beef reached a record $6.67 per pound, a 20.5% annual rise driven by shrinking cattle inventories. Forecast feed cost declines in 2026 could bolster Pilgrim’s Pride margins even as limited beef exposure caps upside from tighter cattle supplies.
1. Record Ground Beef Prices
U.S. ground beef averaged $6.67 per pound in January, a 20.5% year-over-year increase and up roughly 72% since January 2020, marking the fastest annual gain since 2018.
2. Historic Herd Contraction
The U.S. cattle and calves inventory fell to about 85 million head, the lowest level since 1951, down roughly 45 million from the 1975 peak and nearly 10 million since 2020, with herd rebuilds unlikely to boost supply before 2028.
3. USDA 2026 Livestock Outlook
Total red meat and poultry production is forecast at 108.4 billion pounds in 2026, while beef output is expected to decline; the 5-area steer price is projected at $240 per cwt, up 7% year-over-year, and feed costs are set to fall on large corn and soybean crops.
4. Implications for Pilgrim's Pride
Pilgrim’s Pride’s portfolio is heavily weighted to poultry with limited beef processing, so rising beef prices may shift consumer demand toward chicken, while projected declines in feed costs could support its margins despite minimal direct cattle exposure.