Higher Cattle Prices Trample Tyson Beef Profits

US - It's possible that the beef segment for Tyson Foods Inc. lost about $1.9 million this week.
calendar icon 3 September 2007
clock icon 1 minute read
1.9$ million lost

Springdale-based Tyson Foods rode the beef train to three profitable fiscal quarters but cattle prices that are up 18 percent for the year and excess processing capacity in the beef industry have pushed beef margins into negative territory.

Tyson Foods -- the nation's largest beef packer -- slaughters roughly 32,500 head per day, according to HedgersEdge.com LLC, a Colorado-based livestock marketing research firm.

Average beef packer margins are running at losses of $12 per head this week, said Andy Gottschalk, analyst and owner of HedgersEdge.com.

For Tyson Foods' beef segment that spells operating losses of roughly $1.9 million this week, based on the above statistics. (The estimated losses do not take into account any hedging strategies the company may have employed.)

Citing "competitive reasons," Tyson Foods would not discuss figures related to its beef sector.

Source: The Morning News

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