On 8th May 2023, the giant American meatpacker company Tyson Foods Inc (TSN.N) saw its shares plunge 16% to a three-year low as it cut its full-year revenue forecast amid slowing consumer demand. It is believed the reasons for this decline are consumers are cutting back on meat spending in a high-inflation environment, cows’ herds have been reduced so Tyson has to pay more per animal, and an increase in the cost of animal feed. It is unlikely the increase of vegans and reducetarians may have had any effect on this decline, as the company may be compensating for that with the creation of its own fake meats (which some vegans may buy and become new clients for the company).
John R. Tyson, Chief Financial Officer, said, “Many of the headwinds experienced are likely to persist for the remainder of the fiscal year.”
The company lowered its forecast for full-year sales to $53 billion to $54 billion from $55 billion to $57 billion, after adjusted operating income for the first half of fiscal year 2023 sank 80% to $518 million. Sales volumes in Tyson’s bull meat segment fell 8.3% to $4.62 billion.
It seems that the elevated feed costs and drought have driven farmers to send animals to slaughter instead of keeping them for breeding. Tyson’s costs to buy live cows increased by $305 million and its bull meat unit’s operating margins fell to 0.2% from 12.7% a year earlier. In Tyson’s chicken business, margins were negative 3.7% as feed costs jumped by $145 million. Tyson recorded $92 million in charges related to the planned closure of two processing plants.
Although for vegans this news may be encouraging, Tyson remains a very strong company causing a great deal of suffering, and if the economic factors responsible for this decline shift again, it may easily recover to previous levels.
