Tyson On The Ropes But Not Chickening Out
Tyson Foods Inc. reports it has lost $118 million in the chicken industry over the past 12 months. Despite the losses, the company is not going to cut production levels.
Oversupply in the market and the high costs of fuel, have made the poultry trade extremely difficult on a global basis.
Dick Bond, chairman and CEO of the poultry division of Tyson, said, “that poultry customers have expressed concern about the financial health of some suppliers”.
The Russian poultry import quota for 2009 will be cut by 300,000 tons it has been announced this week, making the outlook in the poultry sector appear hazardous for the near future.
The good news for Tyson is that unlike its arch rival Pilgrim's Pride, it also sells beef and pork. Profits from these sectors helped Tyson report a $48 million fiscal fourth-quarter profit Monday, compared with $32 million for the same period in 2007.
Beef sales were $3.1 billion, which was an increase in revenue of 4.6%.
Meanwhile, Pilgrim's Pride, the No. 1 U.S. chicken processor by volume, last month had to obtain a temporary waiver under its credit facilities to give the company time to land a financing package.
Tyson shares dropped 10% Monday, to close at $6.69, 66% down on their 52-week high of $19.50.
Meanwhile Pilgrim's Pride fell 19% to 68c Monday, down 97.7% from a 52 week high of $29.59.
Oversupply in the market and the high costs of fuel, have made the poultry trade extremely difficult on a global basis.
Dick Bond, chairman and CEO of the poultry division of Tyson, said, “that poultry customers have expressed concern about the financial health of some suppliers”.
The Russian poultry import quota for 2009 will be cut by 300,000 tons it has been announced this week, making the outlook in the poultry sector appear hazardous for the near future.
The good news for Tyson is that unlike its arch rival Pilgrim's Pride, it also sells beef and pork. Profits from these sectors helped Tyson report a $48 million fiscal fourth-quarter profit Monday, compared with $32 million for the same period in 2007.
Beef sales were $3.1 billion, which was an increase in revenue of 4.6%.
Meanwhile, Pilgrim's Pride, the No. 1 U.S. chicken processor by volume, last month had to obtain a temporary waiver under its credit facilities to give the company time to land a financing package.
Tyson shares dropped 10% Monday, to close at $6.69, 66% down on their 52-week high of $19.50.
Meanwhile Pilgrim's Pride fell 19% to 68c Monday, down 97.7% from a 52 week high of $29.59.