As the cost of beef has climbed over the last few years, Americans have been swapping out their hamburgers for chicken sandwiches. But this year, Wall Street has taken an interest in America’s third-favorite meat, pork, which is also on the rise.
At the forefront of a consumer shift towards pork products is Smithfield Foods, Inc, the largest pork producer in the United States, whose stock has seen a 24% increase year-to-date closing Friday at $23.35, and is one of very few meatpacking companies currently outperforming the NASDAQ year-to-date.
“At retail they’re promoting pork more,” said Heather Jones, Analyst and Founder of Heather Jones Research LLC, a research firm specializing in the agricultural sector. “For instance, a lot of further processors are replacing beef trim with pork trim in some of their recipes. There is some shift,” said Jones. Further processors refers to facilities that turn raw meat into products like bacon and deli meats.
In a challenging climate for American meat producers, which have been wallopped not only by disease and drought, but also tariffs and inflation, Smithfield has edged ahead of the pack, and attracted investor attention. By owning their own hogs and producing primarily shelf-stable and value-added products like sausage, Smithfield has insulated themselves from current market volatility and capitalized on the opening in the market created by a consumer shift away from expensive beef.
After a promising first quarter earnings statement showed their operating profit increasing 97% from the first quarter of 2024, their stock shot up 10% in late April, eventually hitting a high of just over $25 per share in August, shortly after their second quarter earnings report.
Meanwhile, the American beef-producing giant Tyson has seen its stock drop 4.1% year-to-date. With a long-standing drought pushing up cattle feed and limiting supply, inflation has eaten away at profit margins while at the same time tariffs have brought uncertainty to an industry that depends on trade with Mexico and China. Tyson has been able to lean on their chicken production to shield them from major losses.
“Smithfield is only pork, and Tyson, they have all three: chicken, pork, and beef. Beef is in a very difficult situation, and Smithfield just doesn’t have that exposure,” said Daniel Biolsi, Managing Director of the Consumer Staples sector at Hedgeye Risk Management, LLC.
Where Tyson stock has struggled as they’ve had to shift tactics and rely more heavily on chicken sales, Smithfield Foods stands to gain from shifting consumer trends. According to Smithfield and investors bullish on their stock, the company is able to keep prices low enough that customers can choose pork over beef, capitalizing on a long-time consumer shift.
According to USDA projections, by 2034 Americans will be consuming three more pounds of pork and four fewer pounds of beef every year.
There are some other factors that have given Smithfield an edge, including the fact that they own their own hogs at a time when disease is tightening the hog market.
“So first of all, they sell. Hog prices go higher, so the profitability for their hog business is very strong. And they sell some of that outside. Assuming their operations aren’t disproportionately affected by disease, they would be in a better position than those who don’t control their own supply,” said Jones.
The second major factor driving earnings for Smithfield is their focus on private-label packaged meat, which according to their latest earnings call accounts for more than half of their overall sales.
“Smithfield has a pretty high percentage of private label,” said Biolsi. “You can add that value and you can charge a little bit higher of a price for not too much more of a cost.” Along with a greater profit margin, packaged meat like sausage and bacon has a significantly longer shelf life than fresh meat, and thus helps protect their earnings from some of the volatility on both the supply and demand sides of the market.
Smithfield went public in January of 2025, with shares pricing at $20, lower than the expected $23-$27 dollars that the company had announced earlier in the month. Stocks immediately fell slightly on their first day, down to $19.75, with lows of $19.10.
Analysts caution that some of Smithfield stock’s success in the past year is deceptive, thanks to an artificial boost after their lackluster IPO. But looking at performance over the last 6-month and 3-month periods shows Smithfield is still ahead of its competitors.
As analysts look to the future, escalating tariffs pose the most significant potential threat to the delicate but so far successful model attracting investors. Despite looming threats of a trade war with Mexico and Canada, there are currently no tariffs placed on the many hogs that the United States imports from Canada, nor on the processed meat it exports to Mexico.
Reciprocal tariffs currently in place from China, however, could pose a more serious threat to Smithfield’s current model, which involves exporting offal to Chinese markets who are willing to pay more.
“They’re a high value market for something that you normally would have to sell for 15, 20 cents a pound. So right now demand from China’s been okay because on pork the tariffs are rolled back some from the levels that were originally proposed in April,” said Biolsi.