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Weekly, Tyson Foods processes an average of more than 400,000 hogs. Tyson Foods

Tyson Foods: African swine fever could impact all proteins

To date, pork pricing hasn’t kept pace with increased hog costs, leading company executives to believe any positive ASF impact would occur in late fiscal 2019 into fiscal 2020 and beyond.

Tyson Foods Inc. has announced a strong second quarter Fiscal 2019, beating earlier Wall Street’s second-quarter earnings estimates. However, the recognized leader in protein with leading brands including Tyson, Jimmy Dean, Hillshire Farm, Ball Park, Wright, Aidells, ibp and State Fair warns the spread of African swine fever across eastern Asia may further influence food supplies across the world. 

The largest U.S. meatpacking company, based in Springsdale, Ark., reported net income of $426 million, or $1.17 a share, up from $315 million, or 85 cents a share over last year. Adjusted earnings were $1.20 a share, while analysts’ estimates were $1.14.

“I’m pleased with our direction as we begin the back half of the year,” says Noel White, Tyson’s president and CEO. “The prepared foods segment produced its second consecutive quarter of record return on sales. Both the beef and pork segments were solid performers, while the chicken segment is poised for improvement following what we believe are its margin lows for the year.

“Looking ahead, African swine fever has the potential to impact the global protein industry on a level that we have never experienced, and it is an event that will underscore the power of the Tyson business model. While Tyson’s diversity across segments provides stability and puts us in a position to capitalize when opportunities arise, all proteins could see a benefit. A worldwide decrease in pork supply would offer significant upside to our pork business, while also lifting the chicken and beef businesses as substitutes and increasing raw material costs in our prepared foods business.

“Our forecasts for the current fiscal year do not include any potential effects from ASF as we do not have clarity on when the impact might occur or what the magnitude could be. To date, pork pricing hasn’t kept pace with increased hog costs, leading us to believe any positive ASF impact would occur in late fiscal 2019 into fiscal 2020 and beyond. For these reasons, we are maintaining our guidance for fiscal 2019 in the range of $5.75-6.10 adjusted earnings per share, and we will stay focused on the long-term by growing our business on the strength of our leading brands and our diversified business model.”

Source: Tyson Foods, which is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.
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