Tyson's beef sales rose 7.3% to $6.33 billion in its third quarter, which ended June 28. But, overall, the Arkansas-based meat giant reported a decline in quarterly earnings as a plant closing and higher grain costs cut into its chicken segment's profit. Revenue from chicken accounts for 50% of Tyson's operating profit.
Overall, Tyson's profit for the quarter fell to $79 million, or 23¢/share, from $107 million a year ago, or 30¢/share.
But in the beef sector, Tyson benefited from record-high beef prices during the quarter, resulting from lower U.S. production and the closure of the U.S. border to Canadian beef and cattle exports. That ban also forced Tyson to cut production at its Lakeside Packing Plant in Brooks, Alberta, of which about half of its production was exported.
For Tyson Foods, beef prices, which rose 17.8% on average, more than offset a 1.1% decline in volume sold. Operating profit from the beef unit rose to $78 million from $63 million. Case-ready beef sales were $694 million and increased 16.1%, domestic fresh meat beef sales increased 8.4% and international beef sales increased 16.0%. Beef segment operating income increased $5 million. The beef segment sales increases were partially offset by an increase in live cattle prices.
Tyson Foods operates in five business segments: beef, chicken, pork, prepared foods and other. Tyson says profit from its prepared foods unit has been lower this past year, weighing on overall results. The company says it has yet to take advantage of rising chicken prices because of existing contracts with customers.