US food stocks are approaching multi-year lows again. McDonald’s just had its worst month since March 2020. The Fed hiked, the 10-year hit a 24-year high, oil is over $100 again, and the equal-weight S&P is on pace for a losing streak seen only in 2002 and 2022… while the S&P 500 itself sits just below a record. Lately every business built to serve the “middle” of America has been repriced. Now the stock market itself has a missing middle.
We’ve been sitting on this piece since July.
Every time we got close to hitting send, something else happened… like a dividend cut, a take-private, Fed decisions, earnings season.. plus new client onboardings and personal trips. So this is now the very long version of the thing. It’s a massive catch up since our last update on May 18. It opens with where things stand today, October 1, because the last six weeks changed the backdrop more than the previous twelve.
Here’s what’s changed…
US food stocks restarted their decline. There was a brief rally in July and August… some of it investors temporarily rotating out of AI stocks into safer, dividend-paying names, and some of it “clearing the air” after the dividend cuts finally started to arrive.
That’s gone now.
The Consumer Staples Select Sector SPDR (ticker XLP) fell roughly 5-6% in September alone while tech (XLK) rose about 5% and was the only sector up for the month. XLP is up only 3-4% now for the year against roughly 12% for the S&P 500. But the XLP includes a lot, including retailers, so many key individual names have fared far worse than the ETF…
Campbell’s (CPB) hit a 52-week low on September 25, down nearly 39% in a year… it was already at a 23-year low back in March
Conagra (CAG) closed below $14 on September 30, trading below its book value of $13.29 per share
Hormel (HRL) hit a 52-week low below $20 on September 24
Kraft Heinz (KHC) closed below $23 on September 30, a few percent off its 52-week low
General Mills (GIS) fell almost 5% yesterday alone around earnings and a new CEO announcement, and is back approaching its 52-week low.
Post Holdings (POST), once a darling consistent compounder, is down 33% over the past year.
Hershey (HSY) has erased all of its cacao price-easing gains since early 2025, and is down 17% over the past year.
Smucker (SJM) is a rare standout due in large part to Uncrustables growth and its coffee price-through efforts which defend gross margins. The stock is up 23% YTD and up about 10% over the past year. Still, performance lags dramatically across the board relative to the S&P500. Take a look at this chart….
