February 8, 2022

 

Tyson Foods' reports nearly double first-quarter profits

 

 

Tyson Foods reported nearly double first-quarter profits, pushing its share price 11% up to a record high thanks to rising meat prices in the US, Reuters reported.

 

The company's shares reached US$99.20, 14% higher compared to the start of 2022.

 

Donnie King, chief executive of Tyson Foods, said high customer demand surpassed its ability to supply product. The US labour shortage has limited meat production, resulting in soaring prices for Tyson Foods' beef, pork and chicken products.

 

Tyson Foods' beef average price increased 31.7% in the quarter ended January 1, 2022, while the beef unit's operating margins rose 19.1% compared to 13.2% the year prior. The average prices for all Tyson Foods' products increased 19.6%.

 

The company's overall beef sales was 25% up to US$5 billion, helping the company's sales increase 24% to US$12.93 billion in the quarter. According to IBES data from Refinitiv, analysts expected revenue of US$12.18 billion.

 

Tyson Foods increased meat prices to offset higher costs for labour, transportation, and livestock feed. The company said its cost of goods rose 18% in the quarter. King said grain prices for livestock feed will continue to go up.

 

King said the company restricted its chicken pricing strategy, so customers pay only for the freight rates that have increased 32%.

 

US President Joe Biden's administration has criticised a lack of competition in the country's meat industry. 85% of grain-fattened cattle are slaughtered by Tyson Foods and three other major meatpackers.

 

-      Reuters

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