TFM's profit squeezed by record fishmeal costs and weak shrimp feed demand
Fishmeal cost surge crushes margins Fishmeal prices jumped 59% from a year ago, pushing TFM's gross margin down to 16% — below its own 17-19% target. This squeezes profit: Q3 2026 profit is expected to fall 46% from last year. Higher costs mean less money left from each sale, which weighs on the stock price.
This is the single biggest force driving TFM's profit down and explains why the stock is under pressure.
Shrimp feed demand weakens amid competition Shrimp feed is 60-65% of TFM's sales, but it is struggling. Competitors are fighting harder for customers, and farmers are switching to cheaper soybean and poultry meal. This means lower sales volume and less pricing power for TFM's main product, dragging revenue and profit down.
It explains the demand-side weakness behind TFM's falling sales and profit, not just the cost side.
Growth plans expand but targets cut TFM set a 10 billion baht revenue goal by 2030 and is building a plant in Ecuador, but it cut this year's growth target to 5-7% from 8-10% and lowered its margin goal. The long-term expansion is positive, but near-term expectations are being scaled back, which limits upside.
It shows the tension between TFM's long-term growth ambitions and its reduced near-term outlook.
Halal certification opens new markets TFM received halal certification for 48 shrimp and fish feed products, opening doors to Middle Eastern and ASEAN markets like Malaysia and Bangladesh. This could bring new customers and diversify sales away from Thailand, supporting future revenue growth.
It is a new demand driver that could offset some weakness in TFM's core shrimp feed business.