Protein Fundamentals: Full Speed Ahead. JBS+, HRL+, Protein Sector+, Wing Restaurants+

By Jonathan Feeney and David Schick and David Katzman and Jack Hermann Published on April 9, 2026 PDF

Protein stands out – especially JBS & HRL – in an otherwise dreary & overvalued food sector. Increased consumer interest in protein, adoption of GLP-1 drugs, the high value ceiling set by high beef prices relative to pork, poultry & eggs, and historically high feed ratios make a macro resilient case for outperformance. Protein cuts with significant recent price declines (e.g. wings) offer trade down upside. Eat up.

Steady Demand, Increased Consumer Interest. U.S. consumers’ interest in getting more protein has grown steadily – epitomized by 300% growth in related Google searches over the last decade noted by Hormel in February. More recently, while other food categories have struggled, tracked volumes of U.S. meats & poultry have climbed steadily (roughly +1% annually) – even since the COVID-driven peak for many food categories in 2020.

Multiple Indicators GLP-1 Usage Will Expand & Skew Higher. The explosion in use of GLP-1 drugs to 12.4% of U.S. households (Gallup, October 2025) has helped protein outpace other food categories in both in grocery and foodservice. We think Novo Nordisk’s record-breaking Wegovy pill launch in January – with a staggering 9 in 10 of early prescriptions paid for out of pocket – is a harbinger of broader adoption, especially among higher income households. Furthermore, the Centers for Medicare & Medicaid Services (CMS)’ new BALANCE model promises to increase reimbursement and affordability in 2026 for Medicaid & 2027 for Medicare.

Sky High Beef Prices Set the Tone for Substitution. Composite retail beef prices are drastically above long-term (since 1980) averages with respect to pork (46%) and chicken (70%). Presently, beef is 2.0x the price (per lb.) of pork and 4.2x the price of chicken, well above the long-term averages of 1.4x and 2.5x respectively. We think emerging threats to consumer spending (e.g. macro, energy prices) could be a long overdue trigger for consumer trade down in 2026.

Feed Ratios Suggest Tame Supply Outlook for Pork & Poultry. Besides beef, all other protein forms have price/feed ratios (the key indicator of supplier profitability) that are at or around long-term averages, indicating no outsized impetus for additional supply. This is particularly important for chicken businesses & Hormel’s vertically integrated turkey business. Notably, beef prices are significantly elevated with respect to feed – suggesting gradually increasing supply – but that could take years to manifest given unique aspects of the beef supply chain.

Tailwinds for All Protein, But JBS & HRL Stand Out. While positive protein fundamentals could lift any sector participant, we see a particularly bright outlook for JBS despite its recent move (+28% YTD) – based on accelerating revenue, margin improvement and improving shareholder dynamics (e.g. GAAP statements) as potential catalysts. We also see a brightening outlook for Hormel that is not nearly as well recognized (-7.5% YTD), with improving protein margins & some signs of stabilization in their center store grocery products offering hope for profit acceleration and a return to its historic premium valuation.

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