Most consumers likely think of Tyson Foods Inc. as "those chicken folks," but a third-quarter report from the food giant signaled it plans to continue to prioritize its focus on beef.
Third-quarter beef sales volume for the corporation, based at Springdale, Arkansas, jumped 24% to $4.95 million. A year ago, that number was $3.65 million. No other product in the report came close to beef's numbers -- even while all marked improvements over year-earlier levels. Pork sales for the third quarter were reported at $1.71 million (up from $1.11 million); chicken was at $3.47 million (up from $3.11 million); and prepared foods were at $2.32 million (up from $2.03 million).
Donnie King, CEO of Tyson Foods, said 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. Add to this $545 million paid in legal contingency costs over allegations of price fixing on the chicken side of the business, and overall losses in operations for fiscal 2021 came in at $489 million. A year ago, the segment was showing a profit level on the operating income side of $36 million.
Tyson's plan to emphasize beef production is in line with USDA projections for 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. At the time this article was published, the publicly traded company was showing at $79.61 per share, compared to $64.56 a year ago.
Overall, even with the challenges, Tyson's gross profits were increasing. Third-quarter gross profits were at $1.62 million (a year ago, they were at $1.31 million); and fiscal 2021 gross profits were at $4.05 million (up from $3.77 a year earlier).
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