One of the world’s largest meat producers, Tyson Foods, has reported a US$5 million loss in its second quarter. This, according to the company, is a result of high feed and fuel costs.
Last year, in the same period, a profit of $68 million was made. The loss includes $47 million in charges for plant closings and asset impairments. The loss came even as revenues rose to $6.6 billion in the quarter from $6.5 billion in the year-earlier period.
Tyson well positioned
Tyson Foods president and CEO Richard L. Bond said that, despite the increased costs, the company had a strong quarter. He did, however, criticise government policy on ethanol production, saying the amount of fuel produced has a negligible impact on oil imports while the price of corn is skyrocketing, driving up the cost of food.
Prices have not caught up to the added costs that Tyson is facing, and Bond said prices on the consumer end will continue to rise. As those prices go up, Bond said Tyson will be well positioned as consumers try to save money.
Pork delivers best quarter
Tyson’s pork segment reported its best performance ever in the quarter with an operating profit of $63 million, compared with $35 million in the same quarter last year, commenting that “our pork segment did very well, delivering its best January-March quarter ever.”
Bond cited strong pork exports and low pig prices, which widened processor margins. Looking to the third quarter, Bond said he expects the Pork segment should do well again, although not as well as the second quarter because swine prices will climb in the face of supply declines.
Bond added that Tyson’s pork facilities are running at about 90% capacity.
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