Imitation meat may be all the rage at the moment, but producers of the real stuff are doing just fine.
Sure, vegan burger maker Beyond Meat Inc. stole the headlines this year with a wildly successful market debut and a dizzying 200% gain.
But conventional beef companies Minerva SA and JBS SA aren't too far behind. Even U.S. meat suppliers like Tyson Foods Inc., hamstrung by the China trade war, have posted their biggest stock gains in years.
Fueling the traditional meat rally is a protein shortage in Asia, which has seen demand for imported pork, chicken and beef surge. African swine fever is decimating hog herds from China to Vietnam, and the resulting shortfalls are poised to alter meat trade for years.
While the U.S. is seeing record meat supplies, demand has started to show signs of picking up. Ham prices are near seasonal records amid a frenzy in overseas purchasing, lifting pork values. Companies like Springdale, Ark.-based Tyson are reporting "extreme" interest in chicken from Chinese buyers after a multiyear ban ended.
Domestic demand is also robust, with meat consumption increasing along with consumer incomes, according to Mike Sands, owner of Memphis-based consulting firm MBS Research.
The rally has legs, according to Heather Jones, an equity analyst who owns Heather Jones Research. About 8% of global protein has been wiped out by swine fever, and supplies are expected to trough in the first half of next year.
The surge in animal-protein shares is coming just as faux meat enters a nascent boom. In November, alternative-meat sales surged 40% as more products hit shelves, according to data from researcher IRI. While plant-based substitutes make up just 1% of the $86 billion U.S. meat market, sales could reach as high as $15 billion in the next five to seven years, according to Hormel Foods Corp., which has introduced its own imitation product.
But meat producers also are looking at a swelling global population, which means a higher need for protein consumption.
Ham exports surged with holiday seasons being celebrated around the world amid the swine-fever-induced shortages. At the same time, the U.S. is seeing huge production, driving down live-animal prices. Chicken is expected to be the main substitute for pork, and China recently lifted a 2015 ban on U.S. exports.