Tyson Foods, the largest meat processor in the US, is forecasting that its beef operation will lose between $300m and $400m, the equivalent of between €274m and €365m this financial year. This outlook was delivered earlier this week at the release of its third quarter results, which cover the period between 1 April and 30 June.

During this quarter, the beef business recorded an operating loss of $69m (€63m) on sales of $5.241bn (€4.786bn) and the year-to-date losses in beef are $310m (€283m). In the third quarter of last year, the business recorded an operating profit of $66m (€60m) and after three quarters of the 2023 financial year, operating profit in its beef division was $232m (€212m).

Rest of the business

Beef processing represents 38% of Tyson’s total business in the current financial year-to-date, followed by chicken which accounts for 31%, pork at 11%, prepared foods at 19% and other business at 1%. The pork business also returned a negative operating margin of $62m (€56.6m) in the third quarter and $24m (€21.9m for the year-to-date.

However, the chicken-processing business posted a relatively strong €244m (€223m) operating margin, having had a $314m (€287m) operating loss in the same quarter last year.

Prepared foods remain a consistent performer for the business, returning an operating margin of $203m (€185m) for the third quarter and $676m (€617m) for the year-to-date.

Comment

Explaining the weak performance, Tyson refers to the tight supplies of raw materials, citing USDA forecasts of a 2% reduction in beef supply this year. This has been reflected in the farmgate cattle price, which is currently the equivalent of €6.25/kg on a carcase with a 60% kill-out. The Irish cattle price is running 20-25% behind this, for a much tighter carcase trim and lower kill-out percentage. US beef factories are paying by a distance the highest carcase price of any major beef-exporting country and are struggling to compete internationally. It is different for Irish beef processors, as currently not only is the price they pay for cattle significantly lower, they also face less competition in their main UK and EU export markets.