Tyson Foods' Earnings Beat Estimates on Soaring Meat Prices
(Bloomberg) -- Americans are paying so much for beef that Tyson Foods Inc. was able to bank record-large profits even as it grapples with rising labor costs, all while selling fewer steaks and burgers.
Shoppers are increasingly footing the bill for the skyrocketing costs of producing all meat, which include bigger wages for workers, pricey feed for animals and elevated freight costs. Yet so far the price tags haven’t slowed down consumers’ purchases, keeping margins fat for Tyson, the biggest U.S. meat producer.
“We have very strong demand in both our retail and food-service business,” in retail prices, Chief Executive Officer Donnie King said on a call with reporters.
Meat is just one of many commodities in an inflationary environment that’s making every plate of food more expensive.
The Springdale, Arkansas-based company beat estimates for its fiscal fourth-quarter earnings Monday and its shares rose as much as 4.4%.
Beef prices were up by a third, and Tyson’s margins in the segment were at a record, the company said Monday in a statement. Pork prices climbed 38% and chicken rose 19% in the quarter. At the same time, sales volumes mostly dropped. Tyson’s results follow record earnings reported last week by rival JBS SA.
There’s little relief seen ahead. Prices for corn and soybean meal fed to chickens are expected to remain near the high levels of this year in fiscal 2022, King said.
Tyson said it expects chicken production to increase slightly in the next fiscal year, while output of beef and pork will decline. With meat markets likely to remain tight, margins for Tyson are projected to stay high.
For the first time since the pandemic’s start, Tyson’s facilities were nearly fully staffed and the company, which has a vaccine mandate, said 96% of its workers were inoculated. The company also said it was implementing a productivity program that will allow it to save $1 billion by 2024.
- Adjusted fourth-quarter earnings per share of $2.30 compared to an average analyst estimate of $2.16.
- Sales of $12.81 billion were up from estimates for $12.75 billion.
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