Predicted: A 'Massive Shift to Chicken'

Last month, Robert Feldman, Morgan Stanley's chief economist and co-director of research, predicted a coming "massive shift to chicken" as beef and pork prices continue to soar.

Chicken prices are soaring too, of course, but not by as much. And the inputs that go into the production of all three meats -- feed and energy â€" are less expensive for chicken than for the other two.

What does this mean for American chicken processors? Eoin Gleeson of Moneyweek notes that, even as American companies like Tyson and Pilgrim's Pride have been taking a pounding, the Mexican firm Industrias Bachoco has been flourishing, thanks to rising consumption in Mexico, its high-quality distribution network and the fact that it caters to Mexican tastes by, for example, selling chickens whole rather than in parts as most of American processors do.

Hence, Industrias Bachoco is swimming in cash, with $300 million set aside for acquisitions. Will it pick up one of the big American firms? Gleeson thinks it might. It is "in a superb position to tap the ten-million-plus Mexican expatriates living in America," he writes.