An analyst says Tyson Foods Inc. could see weakness in demand for beef as consumers pull back on spending, but she is maintaining her "buy" rating on the meat producer because it's well diversified across the protein industries.

North America analyst Christina McGlone wrote in a note to investors late Monday that demand for meat is dropping as consumers eat more at home rather than in restaurants. Now that they're eating at home, they're looking to save money on that, which could affect meat consumption, especially for pricier cuts like beef.

"Sources indicate that while consumers had shifted from out-of-home eating to in-home eating, they are now shifting down in meat and other purchases," she writes.

In particular, she wrote, there was uncertainty about the ability of U.S. consumers to afford beef, especially as they cut back on discretionary spending and worry about job security. Couple that with a stronger U.S. dollar and declining global wealth, the outlook for beef and pork consumption is uncertain, she writes.

She notes that U.S. meat consumption grew in the 1990-1991 recession but fell in the 2001 recession.

"On the brink of consolidation and with production cuts now apparent and a steep drop in feed costs, we find the chicken sector appealing," she writes.

But she warned that low breast meat was still hurting the industry as was the current difficult market for credit. Tyson was in the best position relative to its poultry competitors, she says.

Meat producers have been hurt by high prices for commodities like oil and corn, which squeeze their margins. They are also hampered in their ability to raise prices they charge customers due to an oversupply of meat on the market, which they are trying to temper with production cuts.

McGlone retained her fiscal year 2008 earnings per share estimate of 32 cents - a penny below analyst estimates according to Thomson Reuters. But she cut the 2009 earnings per share estimate to 87 cents from $1.04. Thomson Reuters' poll shows analysts predicting 2009 earnings per share of $1.03.

Shares of Tyson fell 79 cents, or 7 percent, to $10.94 in midday trading