Dive Brief:
- Tyson Foods Inc.'s beef sector has hurt its financial outlook for the year, which the company has lowered to $3.10 to $3.20 a share, down from its previous range of $3.30 to $3.40.
- Tyson attributes its weaker beef performance to high cattle costs and export-market disruptions. The company reported a $7 million operating loss in its beef business as a result for the third quarter.
- Not all was bad news for Tyson in this latest report, as the company also reported $343 million in net income for the quarter over $260 million for the same period last year.
Dive Insight:
"U.S. beef prices have been at record highs since last year as the cattle population fell to its lowest level in 63 years after several years of drought," Reuters reported. Coinciding with decline in cattle populations are demand increases for beef, which has caused the skyrocketing prices. Whether beef demand will remain high is unclear as the 2015 Dietary Guidelines Advisory Committee (DGAC) Scientific Report recommended that consumers cut back on eating red meat. Potentially even worse for the beef industry, the World Health Organization's cancer research arm could release a report in the fall linking red meat to cancer.
Tyson also increased its fiscal 2015 cost savings estimate for its 2014 acquisition of Hillshire Brands Co. from $250 million to $300 million.