Meat demand is still going strong despite soaring inflation, according to second-quarter results from Tyson Foods Inc.
The biggest U.S. meat company by sales said a pick up in beef and chicken volumes boosted returns, and it raised its full-year revenue outlook to a range of $52 billion to $54 billion, from $49 billion to $51 billion previously.
“Although we continue to see inflationary pressures across the supply chain, we are working to drive costs down by continuing to increase our efficiency, productivity and bringing more capacity on line,” Chief Executive Officer Donnie King said in a statement Monday.
The top U.S. chicken producer and owner of Hillshire Farms and Ball Park hot dogs has been raising prices to offset a tight labor market and soaring costs. Chicken breasts were fetching record prices at supermarkets.
Tyson pointed to higher prices for cattle, hogs, animal feed, freight and labor. Beef prices were up 24% in the second quarter, while chicken was up 14% and pork 11% higher. With only small expansion in total U.S. beef supplies this year, Tyson expects “another strong year,” while its chicken segment is expected to have a better second half of the year, the company said in a release.
Adjusted earnings in the second quarter of $2.29 per share topped analyst estimates for $1.90. Sales of $13.12 billion compared with estimates for $12.8 billion.
Tyson, based in Springdale, Arkansas, has also been under pressure by politicians in Washington for elevated meat prices, with executives from the four biggest U.S. beef companies denying a conspiracy to fix prices.
Tyson shares climbed 3.4% before the start of normal trading in New York. The stock has climbed over 4% so far this year, even though it remains shy of the record high of $99.09 reached when it reported results Feb. 7.
