Sales volume for beef products at Tyson Foods Inc. jumped 24% for third-quarter 2021. And, while most consumers think of Tyson Foods Inc. as "those chicken folks," a third-quarter report from the food giant signaled it plans to continue prioritizing its focus on beef.
Yes, third-quarter beef sales volume for the corporation, based at Springdale, Arkansas, jumped 24% to $4.95 billion. A year ago, that number was $3.65 billion. No other product in the report came close to the numbers for beef – despite the fact that all Tyson products showed marked improvement over year-earlier levels. Pork sales for the third quarter were reported at $1.71 billion (up from $1.11 billion); chicken was at $3.47 billion (up from $3.11 billion); prepared foods were at $2.32 billion (up from $2.03 billion).
Donnie King, CEO of Tyson Foods, indicated that the reopening of food service businesses had helped boost sales volumes across the board, but that the beef business side, especially, had been working to increase production to meet growing U.S. and international demand.
Tyson's flagship protein, chicken, struggled with operating income losses reported for the third quarter of $279 million. A year earlier, the same segment posted operating income losses of $120 million. One reason cited for the losses was an increase in feed costs in addition to legal contingency costs over allegations of price-fixing on the chicken side of the business.
Tyson's plan to emphasize beef production is in line with USDA projections for beef in fiscal 2021. The agency projected domestic beef production will increase 3%, pork production will be flat, and chicken production will decrease slightly.
The announcement that Tyson was doubling down on beef production was well received by shareholders, who saw prices bump up on the news. Recently, the publicly-traded company’s stock was selling at $79.61 per share, compared to $64.56 a year ago.
EDITOR’S TAKE:
This is where things can get a little tricky for Tyson’s plan. The extreme drought in the northern plains and the western U.S. is forcing many ranchers to downsize their herds at a time when demand is increasing. Not enough quality hay and pasture is a limiting factor. That said, there is plenty of demand for beef. Once the drought subsides and things return to normal, beef producers should once again realize the prices and income they deserve. When that occurs, these producers will be ready for new trucks. That’s precisely why your CAD team encourages all our members to assess who will be your best customer prospects in the weeks and months ahead.
