US pork, chicken and beef producer Tyson Foods reported that the skyrocketing price of poultry feed hurt its business in the latest quarter, triggering a 92% drop in profits.
The company warned that rising grain costs could lead to more losses in its chicken unit.
The chicken unit suffered from a $44 million loss in the fiscal third quarter, compared to a $95 million profit in that same period in 2007, as prices for corn and soybeans rose rapidly after flooding damaged crops and delayed plantings in the United States.
According to Tyson, the company paid $140 million more for grain during the quarter to feed its poultry compared to last year. In addition, it is expected that grain costs will cost up to $550 million this fiscal year.
The Tyson pork business wasn’t hit as hard, since Tyson buys swine for its beef and pork operations, contrary to its poultry business – which are raised by the company and consequently have to be fed.
Operating income for Tyson’s Pork business was $54 million compared to $37 million during the third quarter of fiscal 2007. Sales for the segment during the quarter were $926 million compared with $857 million during the previous year.
â€¢ Tyson Foods
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