Tyson profits fall, poultry income weakens
Tyson Foods, the US's largestmeat producer, has reported reduced third-quarter profits amid weak chicken prices and high feed costs. The group revealed smaller profits for all three main divisions – beef, chicken and pork – for the three months to July 2, reporting earnings down 21% at $196m.
The decrease was biggest in chicken, where operating profits fell 85% to $186m, despite a small increase in divisional revenues.
"We feel good about our performance in the chicken segment while experiencing extremely volatile input costs and market prices at or near historical lows,” said Donnie Smith, president and chief executive officer of Tyson Foods.
“The fact that we remained profitable in such a difficult environment demonstrates how much our chicken business has improved in the past three years. There appears to be improvement in market fundamentals on the horizon, but the next few months will be very challenging, and it is likely our Chicken segment will experience a loss in the fiscal fourth quarter.”
“For Chicken, we expect weak market pricing conditions to continue as a result of an imbalance of available supply relative to customer demand. Current USDA data indicates reduced broiler egg sets and placements in the fourth quarter of fiscal 2011. However, we do not expect to see a meaningful impact of the reduced supply in our results until late in our fourth quarter of fiscal 2011 and continuing into fiscal 2012. Because of these factors, we expect our Chicken segment will likely experience a loss for the fourth quarter of fiscal 2011.”
Source: Tyson Foods
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