Tyson Foods on Monday announced the closure of four chicken processing plants, and the meatpacking giant said it lost money on its chicken and pork business during the latest quarter while barely covering costs on its beef segment.
Tyson said it is shutting down plants during the first two quarters of fiscal 2024 at Corydon, Indiana; Dexter, Missouri; Noel, Missouri; and North Little Rock, Arkansas, ”to further optimize network asset utilization.” Tyson’s new fiscal year starts in October.
During the third quarter of fiscal 2023, the company reported an operating loss of $324 million, or 7.5%, on chicken, and $74 million, or 5.6%, on pork. The average sales price for pork dropped 16.4% during the quarter, while chicken prices slipped 5.5%.
Tyson had reported operating profits of 6.5% and 1.5% on chicken and pork respectively during the same quarter in 2022.
Tyson’s beef segment made an operating profit of 1.3%, or $66 million, on beef during the latest quarter, down from a return of 10.7%, or $533 million, for the same quarter last year.
Tyson notes that USDA is projecting domestic beef production will be down 3% for the current fiscal year, while pork production will be flat, and chicken production will be up 3%. For the full year, Tyson expects to show roughly breakeven operating margins for beef and chicken and negative margins of 2% to 4% for pork.
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Tyson CEO Donnie King told analysts Monday the company remains “optimistic about our long-term outlook. … We will continue to combat the current environment by focusing on what we can control.”
The company said in a press release that it has already surpassed its goal of implementing $1 billion in productivity savings relative to 2021 by the end of FY24.
King said the closure of the four chicken facilities “demonstrates our commitment to bold action and operational excellence as we drive performance, including lower costs and improving capacity utilization, and build on our strategy of making Tyson Foods stronger in the long-term.”
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