Tyson Reports Decreased Sales Volume Due to Reduced Live Cattle Harvest Capacity

US - Tyson Foods today reported that beef sales volume decreased due to a reduction in live cattle harvest capacity as a result of a fire that caused the temporary closure of a production facility for the majority of the first quarter of fiscal 2020.
calendar icon 6 February 2020
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Average sales price increased as beef demand remained strong. Operating income increased as we continued to maximize our revenues relative to live fed cattle costs, partially offset by increased operating costs and $16 million of net incremental costs from a production facility fire.

According to Tyson, for fiscal 2020, USDA indicates domestic protein production (beef, pork, chicken and turkey) should increase approximately 3-4 percent from fiscal 2019 levels, but the company expects export markets to absorb the increased production.

Tyson expects industry fed cattle supplies to increase approximately 1 percent in fiscal 2020 as compared to fiscal 2019. It expects ample supplies in regions where it operates its plants.

For fiscal 2020, Tyson Foods believes that its Beef segment's adjusted operating margin will be toward the upper end of 6.5 percent to 7.5 percent, absent additional impacts from ASF.

"Our overall results in the first quarter of fiscal 2020 were in line with expectations," said Noel White, Tyson Foods’ CEO.

"Our Beef and Pork segments performed well as the effects of African swine fever are beginning to materialize. Our Chicken segment performed better operationally, although in a soft pricing environment.

"Our Prepared Foods segment produced its sixth consecutive quarter of retail consumption growth, demonstrating the strength of our brands and innovation as we grew or held market share in all core categories.

"With improved access to global markets resulting from recent trade developments, there are reasons to be optimistic about fiscal 2020 and beyond and we are well-positioned to capitalize on opportunities in the global marketplace.

"Although we anticipate the challenges and volatility typical in our second fiscal quarter, our long-term outlook remains positive."

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