In the protein business, we are venturing into a market with relatively inexpensive feed ingredients. The typical M.O. of producers is to dramatically increase production as a way of storing those cheap feed ingredients as protein. Historically, that has resulted in oversupplied markets and is also a major reason why chicken producers continue to steal market share from beef and pork producers. Chicken producers benefit from a much shorter lifecycles and can react more quickly to changing market conditions than large animal protein producers.
Many industry experts forget to factor in the average increase in weight per animal. I challenge my learned colleagues in the protein business to only build supply to a reasonably, realistic business plan and not be the one to oversupply, pushing the market lower. As Tyson Foods and JBS have significant shares in all three proteins, damages to any of the categories could negatively impact some portion of their company. They both have enough critical mass to create an oversupply in the market.