By Karen Graham
Published August 7, 2023
Tyson Foods is closing four more chicken processing plants. Credit - Fkbowen, CC SA 4.0.
Tyson Foods, hurt by falling chicken and pork prices as well as slowing demand for its beef products, is closing four chicken plants.
Tyson Foods missed Wall Street expectations for third-quarter revenue and profit on Monday, with shares down nearly 6 percent premarket.
Net quarterly sales fell 3% to $13.14 billion, below analysts’ expectations of $13.59 billion, according to Refinitiv data. The company’s average sales prices fell 16.4% for pork and 5.5% for chicken while rising 5.2% for beef.
The company said Monday that the four chicken processing plants being closed are located in North Little Rock, Arkansas; Corydon, Indiana; Dexter, Missouri and Noel, Missouri.
In its attempt to lower costs this year, Tyson has already cut corporate jobs and shuttered other chicken plants, as it struggles with declining profits and reduced demand from consumers squeezed by inflation and higher interest rates.
Last year, the company hiked prices due to spiraling feed and labor costs, but in 2023, it was hit by lower prices in core protein segments, such as pork.
The company has also struggled to predict sales and previously said reduced demand for beef made it difficult to pass on higher costs to consumers.
“Chicken, beef, and pork all face different types of macro and market challenges,” Chief Financial Officer John R. Tyson said in an interview. “That’s persisted for a little while.”
Tyson expects the closing chicken plants to stop operating in the company’s first two quarters of fiscal 2024. It estimates total charges of $300 million to $400 million from the closures.
Tyson wrongly predicted last year that demand for chicken would be strong at supermarkets in November and December, Chief Executive Donnie King said in February. In January, the company replaced the president of its poultry business.
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