Tyson Foods warns that coronavirus will restrict US meat supply despite Trump order
The COVID-19 crisis will continue to idle US meat plants and restrict production, Tyson Foods Inc says, signalling additional disruptions to the US food supply after President Trump ordered plants to stay open.
5 May 2020
2 minute read
According to Reuters, Tyson reported lower-than-expected earnings and revenue for the quarter ended on 28 March, before processors shut massive slaughterhouses as the coronavirus spread among workers. Shares fell more than 8 percent as Tyson also said meat sales will fall in the second half of the year because the outbreak has reduced restaurant demand.
Trump last week deemed meatpacking plants "critical infrastructure" that must stay open, in an executive order to protect the nation's food supply.
"There have been some shortages in some specific categories," Chief Executive Noel White told analysts on a conference call.
Tyson is working with government officials to resume operations at a massive beef plant it closed in Dakota City, Nebraska, White said. The company over the weekend was receiving results for COVID-19 tests it performed on employees of another shuttered beef plant in Pasco, Washington, he said.
Retail demand for Tyson's meat has increased 30-40 percent as consumers stay home, but the company said sales will decline in the second half of the year because of lost foodservice and restaurant business.
Before Trump's order, the company warned that millions of pounds of beef, pork and chicken would vanish from US grocery stores because of plant shutdowns. Its chairman said the US "food supply chain is breaking," as farmers began euthanising pigs because they lost markets for them.
Sales rose 4.3 percent to $10.89 billion, in the second quarter ended 28 March. Analysts had expected revenue of $10.96 billion, according to IBES data from Refinitiv.
Excluding items, the company earned 77 cents per share, missing estimates of a profit $1.04 per share.
Read more about this story here.
