Market News & Headlines >> Tyson Foods to Slow China Poultry Expansion
Tyson Foods, which has embarked on a plan to rapidly expand its poultry production in China, is taking its foot off the gas temporarily due to weaker demand there.
CEO Donnie Smith told investors following quarterly earnings Friday that the Avian flu virus and a slowdown in China’s economy has caused demand to soften. Smith said the company would not proceed with plans to build new chicken houses beyond what was already planned for the current fiscal year, although he added that Tyson would continue to secure the necessary permits so that it could start building when demand improves.
The issues in China helped cause a $28 million loss in its international business in the first quarter.
Overall, the company reported earnings of $254 million, or 72 cents a share, up from $173 million, or 49 cents a share, a year earlier. The results beat Wall Street expectations.
Domestically, Mr. Smith noted the record high beef prices that should continue through 2014, and said pork prices will remain high due to tighter supplies. The company said the ongoing PED virus will cut pork supplies this fiscal year by 2-4%.
For consumers, “chicken should continue to be the winner,” Mr. Smith said.