May 6, 2020

 

Tyson Foods: COVID-19 will continue to disrupt US meat plants

 

The company said the COVID-19 pandemic will continue to disrupt meat production in the United States despite an executive order from US President Donald Trump to keep plants open, reported Reuters.

 

Tyson Foods reported lower earnings and revenue that were projected for the quarter ending March 28, 2020 as major meat processors in the United States shut down facilities to stop the spread of COVID-19.

 

Tyson Foods shares dropped more than 8% as the company expects meat sales to decrease in the second half of 2020 as restaurant demand has plummeted due to the pandemic.

 

US President Donald Trump said meatpacking facilities are critical infrastructure and must remain opened to sustain the country's food supply.

 

Noel White, chief executive of Tyson Foods said the company is currently working with government officials in an effort to reopen its beef plant in Dakota City, Nebraska. Its workers from another closed beef plant in Pasco, Washington are undergoing COVID-19 tests.

 

Other Tyson plants under shutdown include its Waterloo and Perry plants in Iowa, although it is planning to reopen its Logansport, Indiana pork plant.

 

However, it is unknown how many workers will return to facilities once they reopen.

 

Dean Banks, Tyson president said swine slaughtering capacity in the United States has fallen 50%, adding that the company consolidated its product offerings to maintain retail supply for consumers. Demand for meat in retail has jumped 30% to 40% as consumers stay home.

 

Limited meat purchases have been announced by Costco Wholesale and Kroger.

 

Before US President Donald Trump's announcement, Tyson Foods said beef, pork and chicken in the millions of pounds will disappear from retail because of plant shutdowns.

 

Tyson sales increased US$10.89 billion, up 4.3% in the second quarter ending March 28. According to IBES data from Refinitiv, analysts expected US$10.96 billion in revenue. The company earned 77 cents per share, not hitting the US$1.04 profit target per share.

 

-      Reuters