THE PROTEIN PULSE

Thursday Margin Monitor | October 22nd, 2026

Full Executive Briefing — Spoken Script

HOST: Welcome to The Protein Pulse Podcast, your daily market update on all things protein. This is Thursday Margin Monitor for October 22nd, 2026, from The Sparks Group.

SHAWN: I don't care how strong the rib is if the rest of the carcass isn't pulling its weight. That's where I think this beef market is getting tested. Cattle remain scarce. That is real. But scarcity doesn't force a restaurant to keep a steak on the menu, a retailer to feature the same cut, or a grinder to ignore imported lean. Customers have choices, and they're using them. Look at pork. Bellies just took a hard hit. Chicken production is expanding. Both are competing for the same food dollar while beef packers are trying to protect the value of every animal they harvest. To me, this is where experience matters. You can't buy the headline and hope the customer follows. You have to know which product will move, what it really costs you, and how long you'll own it. The profit is in the decision, not the prediction.

HOST: A nationwide ready-to-eat meat and poultry recall has exposed a warehouse cold-chain failure, with affected product shipped to retail and foodservice customers. Restaurant performance also offers a revealing contrast. LongHorn Steakhouse gained guests while Olive Garden lost traffic. Meanwhile, Hormel is moving to expand in value-added chicken as wholesale beef and pork values diverge. Animal health and trade remain consequential. A Texas screwworm detection raises regional livestock-movement questions, while Brazil faces new poultry restrictions in some markets even as the European Union considers restoring access for Brazilian poultry. Across the industry, the bigger picture is clear. Food safety, shifting consumer demand, changing trade relationships and uneven protein markets are creating new challenges and opportunities for businesses throughout the supply chain.

SHAWN: The October 21st afternoon Choice cutout closed at three seventy-two fifty-nine, down seventy-one cents. Select fell six twenty to three fifty-five thirty-four, widening the Choice Select spread to seventeen twenty-five. Grade-flexible buyers should revisit offers. Choice heavy boneless ribeyes averaged fifteen fifty-four, while blended steer heifer cow-source eighty-one percent ground beef stood at three forty-five. Demand remains uneven across cuts. Grinding beef requires separate calculations. National fresh nineties averaged three eighty-five, eighty-fives three eighteen and fifties eighty-four. Grinders must evaluate formulation yields, origin, freight, storage and handling before switching supply. The five-area live F-O-B steer average for the week ended October 18th was two twenty-four nineteen. Wednesday cattle slaughter was estimated at one hundred ten thousand head, bringing the week-to-date total to three hundred twenty-seven thousand. Sterling estimates packer margins at positive one hundred fifty-five oh six per head and feedlot margins at negative two hundred forty-four seventy per head. Those are modeled results, not actual company earnings. December live cattle futures settled at two thirty-one thirteen, up ninety-five cents, while October feeder cattle reached three forty-seven eighty-three, up one ninety-three, on October 21st. Replacement costs remain firm despite wholesale weakness. In results released September 24th for the fiscal quarter ended August 30th, LongHorn Steakhouse posted six point two percent same-restaurant sales growth, including one point six percent higher guest counts and a four point five percent larger average check. Olive Garden increased same-restaurant sales one point one percent, but guest counts declined two point two percent while the average check rose three point four percent. The difference matters. Some diners are still choosing steak while other restaurant formats depend more on pricing than additional visits.

HOST: The October 21st pork cutout dropped four oh three to seventy-four fifty. Bellies fell twelve oh one to seventy-seven sixty-six. Picnics declined nine seventeen to fifty-five fifty-one. Butts eased just forty-six cents to one oh two sixty-two. For bacon processors, the belly break creates negotiating leverage. For butt buyers, the same broad concession is not supported. Purchasing decisions should follow primal specifications, shipment timing and actual customer commitments. For October 9th to 15th, pork net export sales totaled thirty-seven thousand five hundred metric tons, up three percent from the previous week. Mexico, South Korea and China led the commitments. Physical exports totaled thirty-two thousand seven hundred metric tons. Export commitments temper the belly signal without proving wider demand strength. Wednesday hog slaughter was estimated at four hundred ninety-five thousand head, bringing the week-to-date count to one point four five nine million. Sterling estimates farrow-to-finish profits at seven eighty-four per head and packer margins at twelve sixty-two per head for the week ended October 17th. December lean hog futures settled at sixty-five seventy-three, down one forty-three, and February at sixty-seven ninety-three, down one twenty-five, on October 21st. Producers should assess forward hedging separately from current cash trade. Bacon buyers can seek concessions without assuming another wholesale decline.

SHAWN: Broiler chick placements reached one hundred ninety-three point two nine eight million for the week ended October 17th, up two percent year over year, while eggs set reached two hundred forty-five point seven six four million, up three percent. Those birds cannot fill today's orders. Processors must assess when they reach market, at what weights and in which product mix. Buyers should not convert higher placements directly into expectations for cheaper breasts or wings. Breasts, tenders and wings were described as barely steady Wednesday, with dark meat fully steady. For October 12th to 16th, weekly fresh F-O-B averages were one seventeen for boneless skinless breasts and one oh nine for whole wings. On September 30th, Hormel Foods announced an agreement to acquire Brakebush Brothers for approximately one point oh six billion, subject to regulatory approval and other closing conditions. The proposed deal would add value-added chicken products and deepen Hormel's foodservice customer relationships. It is not a completed acquisition. Wisconsin's HPAI detection still warrants regional supply and movement checks. Buyers should cover nearby requirements against current offers, then reassess longer commitments as production reaches processing plants. A Newcastle disease outbreak involving turkeys in Santa Catarina has changed Brazilian poultry export eligibility. Brazil's agriculture ministry reported restrictions by Saudi Arabia and China on specified products originating in that state. Mexico and Malaysia imposed broader Brazil-origin restrictions covering specified poultry categories. Importers and distributors should review outstanding purchase contracts for eligible origin, product classification and shipment status. Where supply no longer qualifies, buyers must check eligible replacement suppliers. Canada remains a competitive destination for U.S. beef. Canadian imports of U.S. beef and beef products were valued at eight hundred sixty-nine point two million dollars in 2025, representing forty-three percent of the category's imports. Exporters should protect account-level economics against competing origins and changing delivered terms. Separately, the European Commission said it intends to propose restoring Brazilian poultry and honey import eligibility, subject to a member-state vote. Its position on Brazilian beef remains different. Importers must distinguish proposed approvals from permissions already in force.

HOST: Procurement radar. Beef trim. Watch. Compare domestic fresh nineties against equivalent delivered imported frozen offers. Switch only when formulation yield and total cost justify it. Pork bellies. Wait. Negotiate against Wednesday's wholesale decline without extending inventory beyond confirmed bacon requirements. Chicken breast and wings. Hold. Cover immediate needs at current offers. Reassess longer commitments when additional placements reach processing plants. Cash cattle. Watch. Confirm negotiated trade, processing schedules and delivery availability. In affected screwworm territories, verify movement and inspection requirements before committing cattle. Freight and fuel. Watch. Review current diesel surcharges and refrigerated freight quotes before committing delivered purchases. Falling Ultra-Low Sulfur Diesel futures do not guarantee lower carrier charges. Texas wildlife authorities confirmed New World screwworm in a hunter-harvested elk in Pecos County on October 21st. The Texas Animal Health Commission will revise an existing infested zone, with additional surveillance planned. Regional feeders, packers and transporters should check affected shipments. On October 17th, USDA FSIS announced a Class I recall of approximately one point five eight million pounds of Kayem ready-to-eat meat and poultry distributed to retail and foodservice customers nationwide and in Hong Kong. A customer complained of warm product at delivery. The subsequent investigation identified temperature deviations in a warehouse cooler. At the time of the announcement, no associated illnesses had been confirmed. The recall highlights the importance of cold-chain controls, traceability and removing affected products from distribution. Additional product-identification details are available in FSIS recall zero two six dash two zero two six. Mexican cattle-import reopening arrangements remain conditional. A new detection does not independently establish that a crossing schedule has changed. Operators should rely on current agency instructions rather than assumptions about border access. USDA's planned regional negotiated-cattle reporting expansion on October 26th could improve cash-market visibility. Buyers must still verify actual trades and cattle availability. December corn settled at four sixty-three Wednesday, up one and a quarter cents, while December soybean meal closed at three forty-eight thirty, down forty cents, on October 21st. For October 9th to 15th, soybean net export sales totaled two million eight hundred forty-one thousand two hundred metric tons and corn net export sales totaled one million five hundred twenty-seven thousand one hundred metric tons. Feed buyers should measure those demand signals against local basis and delivered offers rather than assume futures changes equal feed-cost changes. Transportation presents a sharper immediate cost problem. The October 19th U.S. on-highway diesel average rose ten cents to six twenty-eight a gallon, while November NY Harbor Ultra-Low Sulfur Diesel futures fell sixteen cents on October 21st to four seventy-six. Lower distillate futures do not reduce carrier invoices immediately.

SHAWN: Confirm affected recall lots, traceability and product disposition under FSIS instructions. In foodservice, distinguish traffic growth from higher average checks when estimating protein demand. The two signals support different volume plans. Protect regional livestock movements through current animal-health instructions and keep Brazilian poultry orders contingent on actual import eligibility, not proposed approvals. With cattle costs firm, bellies weaker and diesel elevated, purchasing discipline depends on specifications, inventory exposure and delivered economics. The executive priority is to act on product safety and verified access conditions while resisting broad demand assumptions drawn from a single market or restaurant brand. Stay disciplined.

HOST: That's The Protein Pulse, Thursday Margin Monitor for October 22nd. From Shawn Sparks and The Sparks Group.

SHAWN: Stay disciplined.