Tyson Foods chicken production levels maintain

Coming off a record-profit quarter in its long-struggling chicken segment, Tyson Foods will continue to take a disciplined approach to production, said the company's vice president and treasurer, Ted Jones.

A return to profitability in the chicken industry has some investors worried that companies will ramp up production and thereby throw off the balance of supply and demand; a problem that helped put many of them in dire straits during the deepest stages of the recession.

Jones noted that pullet production was up 2% year-on-year in February, prompting an investor to ask whether discipline in production would continue.

USDA's latest cold storage report showed total red meat and total poultry supplies in freezers as of February 28 were each down 13% from the same period last year.

Tyson's operating income in chicken was US$78 million, or 3.2% of sales, in the first quarter of fiscal 2010, compared with a loss of US$286 million, or -12.8% of sales, in same period last year, when feed and fuel costs took a heavy toll.

The company has said its chicken business will return to normalised operating margins of between 5% and 7% sometime in fiscal 2010. The number was -1.6% in fiscal 2009 and -1.3% in 2008.