May 3, 2006


Tyson says meat oversupply situation would ease in summer



For the first quarter of 2006, domestic US wholesale meat and poultry prices have been depressed by oversupply, due in part to increased production and disruptions in the export markets for beef and poultry, officials with Tyson Foods Inc said on Monday (May 2).


Tyson Chairman and Chief Executive John Tyson said the protein glut affected beef, pork and chicken sales during the company's fiscal second quarter.


Dick Bond, president of Tyson Foods, said demand for certain beef cuts, mainly the premium steaks, had begun to improve in April.


John Tyson said that grocers across the nation would now feature more meat and poultry than normal this summer due to the expected low wholesale prices.


Larger supplies of cattle are expected to be available to the processing plants into the late spring and summer months, so the facilities should be able to increase their capacity utilisation and operate at more efficient levels, Bond said.


Domestic chicken demand has been good, but excess meat supplies and international concerns over bird flu have channeled more chicken to the domestic markets, which depressed prices for both breast meat and leg-quarters.


Bond said the company is reducing bird weights and would not increase production for the summer season as it normally does.


These measures would reduce the company's chicken output by approximately 0.8 percent, he said.


The company warned that fewer leg-quarters would be available for export during the summer months due to more of them being used in other products.


In the pork sector, the company said average sales prices were down 12 percent from a year ago.


US pork production was record large in the first quarter, according to the USDA.


The company said its pork export sales in the quarter were up 17 percent, with the majority going to Mexico, Japan and South Korea.


Bond said that although beef production is expected to increase into the late spring and summer months, the overproduction that occurred earlier in the year was from chicken, turkey and pork.


Tyson officials said they believe that the Russian ban on poultry imports announced last week would be resolved soon and that Russia will issue new import licenses.


Russia will allow shipments of US poultry that are scheduled to depart from US ports through May 8. Therefore, the company does not expect chicken exports to be affected.


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