September 10, 2007

Tyson Foods cutting beef production due to margins

Chicken giant Tyson Foods Inc said on Friday (Sep 7) it would reduce beef production on certain days this month to manage its operating margins.

US beef companies have been struggling lately due to an oversupply situation.

Tyson said beef production on Saturday (Sep 8) would be reduced and it will not operate three of its eight US beef plants on Monday (Sep 10).

Analysts are expecting other companies to begin scaling back production as well.

Processors are incurring losses on each head of cattle they process and the magnitude of these losses have doubled in recent weeks.

The large inventories of beef should soon cause a drop in wholesale beef prices, they said.