News update:Mar 9, 2016

Tyson Foods benefit after China bird flu outbreak

US chicken producer Tyson Food, said its poultry business in China will benefit in the long-term as the bird-flu outbreak focuses attention on its food-safety procedures, reports Bloomberg.

Tyson’s chicken production in China hasn’t been directly affected by avian influenza, also known as the H7N9 virus, according to the Springdale, Arkansas-based company. Tyson is “getting recognition” for its food safety measures as chicken demand has dropped temporarily industry-wide in China, Chief Executive Officer Donnie Smith said during a call with analysts today after reporting fiscal second-quarter earnings

“The avian influenza outbreak in China is troubling and is detrimental to protein consumption in the short run,” Smith said. “The one thing that this unfortunate event has done is absolutely validated our model for extreme biosecurity.”

Tyson is increasing the number of company-owned birds it processes in the country as consumers there eat more chicken, Smith said. While many chickens in China are still raised by small farmers, Tyson is bringing technology and practices common in the U.S. to the Asian country.

To keep birds healthy, Tyson uses ventilation systems in the houses, mills its own feed, controls access to farms and requires anyone entering or leaving the buildings to shower, Smith said. Customers in the region will pay for the added food safety Tyson provides, Chief Financial Officer Dennis Leatherby said on the call.

Tyson took a US$56-million impairment in China during the quarter related to an older poultry complex and not connected to the bird flu outbreak, the company said. Revenue in the fiscal year through September will be about $34.5 billion, down from a February forecast of $35 billion, the company said in the statement.

Source: Tyson Foods

World Poultry

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