Scarcity drives meat prices up – Meat giant Tyson sees profits double despite volume decline and meat shortage

US meat giant Tyson Foods’ revenue rose in its fiscal fourth quarter, which runs from July through September, by more than 10% to $12.8 billion. Profit even doubled (+103%) and rose to $1.358 billion. Tyson Foods owes the good benefits to the record high meat prices in the United States.

Sales volumes down
The increase in turnover is remarkable at first, given the slowdown in sales volumes. Pork volumes sold in the fourth quarter were 17.7% lower than in the same period last year. The volumes of beef sold fell by 15.4%, while the sales of poultry meat decreased by 5.9%. It should be noted, however, that the fourth quarter last year had an extra week.

But even if this is corrected for, sales in 2021 will lag considerably. In their own words, this is due to lower animal numbers in the United States and a tight labor market. The fact that the turnover is considerably higher is due to the meat prices, which have increased by 22.5% overall.

Stock market listing on the rise
Fiscal year 2021 has ended with the completion of the fourth quarter. Revenue is $47 billion, compared to $43 billion in 2020. Profits increased nearly 50% to $3.06 billion. The good results are reflected in the stock price of Tyson Foods. The stock is already up 30% this year to $84.

For fiscal year 2022, the Tyson board is positive. Sales are estimated to be between $49 million and $51 billion, as meat prices are likely to persist at high price levels. In addition, an austerity plan is ready with the aim of sanitizing $1 billion annually by 2024.

This article is part of the content collaboration between Foodlog, Foodbusiness and Boerenbusiness.