Beef: varied diet - FT.com A good thing meatpackers such as Tyson Foods and JBS also have exposure to chicken Where's the beef? Stampeding higher, as it happens. US cattle prices have risen to fresh highs at the start of 2014, building on a multiyear climb as the US herd has shrunk. The question for meatpackers such as Tyson Foods and Brazil's JBS is whether they can pass on the higher prices in an environment where US consumers remain constrained. An annual USDA survey from January 2013 showed 89m head of cattle and calves, the lowest inventory since 1952. Ranchers have culled in response to lower demand - consumers are favouring chicken as a cheaper and healthier alternative - and elevated feed costs in recent years. The price of corn soared in 2012 when a severe drought hit the Midwest of the US. The 2013 corn crop was particularly good, and prices have fallen sharply, but it takes three to five years for cattle prices to adjust, according to JPMorgan. Gestation alone is nine months for cows. The timeline for chicken, by contrast, is a matter of months. This, and the greater demand, mean the outlook for chicken is much better than for beef. Any increases to the herd also mean an initial decline in supply as ranchers hold some lucky cows back from the slaughterhouse for breeding. Good thing, then, for shareholders of Tyson and JBS that each has exposure to chicken, too, which should help offset some of the pressure on beef. At Tyson beef contributed 42 per cent of sales in 2013, but with margins at about half those of chicken, operating income from beef was 22 per cent of the total against 47 per cent for chicken. JBS, which controls Pilgrim's Pride, can also steer towards its Brazil beef business where exports should benefit from the real's declines. Sometimes investors want pure plays, but the dynamics in animal protein show diversification can have meaty benefits.