Better operations helped Tyson turn around its poultry business

While the rest of the market was melting down on Monday, Tyson Foods had some positive nuggets to share with investors.

America’s largest meat company has improved how it runs its massive poultry business, including better demand forecasting, CEO Donnie King said on an earnings call, and that’s “enabling us to benefit from the market tailwinds” like falling grain prices for chicken feed.

It all made for a much better-than-expected quarter for Tyson, which posted adjusted earnings per share of 87 cents for the June quarter, “almost six times higher than a year earlier,” according to Bloomberg on August 5.

Lean meat. Raising chickens for slaughter was much costlier just a year ago, Bloomberg reported at the end of July. Tyson faced higher feed prices and was sitting on a lot of extra chicken parts after it overestimated demand. Now that’s changed, and the Arkansas-based company reported $307 million in operating profits on its chicken business, which Bloomberg this week said was “the highest since 2016 for a fiscal third quarter.” Tyson has also gotten leaner, offloading “nearly a dozen of its facilities” and cutting staff, the Wall Street Journal reported.

Where’s John? Interim CFO Curt Calaway was on the call to share results with investors while the permanent CFO, John Tyson, remains suspended since his charge, in June, for driving while intoxicated. It was the second alcohol-related charge that Tyson, whose great-grandfather started the company, has faced since taking the CFO role in 2022.

Unherd of. It’s a good thing that, as King put it, “chicken had one of its best quarters in some time,” because Tyson is losing money on beef. The US has a cattle shortage and they’re getting more expensive to raise, Bloomberg reported this week. Fixing the shortage is a long project: “The cattle inventory in the US still has not recovered from the great recession,” Ricky Volpe, a Cal Poly agribusiness professor, told CFO Brew. That’s the result of many factors, he said, including biology: “A head of cattle takes up to a year to be market-ready,” Volpe said, while a chicken raised for meat takes about six weeks.