Tyson plans to open $320M chicken processing plant in Kansas
- Citing the strong U.S. market for fresh chicken, Tyson Foods said it plans to build a poultry plant in eastern Kansas capable of processing 1.25 million birds per week. The $320-million facility will go up on about 300 acres south in Tonganoxie, about a half hour west of Kansas City, Kansas. Groundbreaking is scheduled for this fall.
- The company said the new plant would be part of its Tyson-branded No Antibiotics Ever (NAE) retail chicken line, making the meat processor the world’s largest producer of NAE.
- The processing plant, hatchery and feed mill will employ approximately 1,600 people and contract with northeast Kansas farmers and ranchers to raise the chickens, according to the company. “More people want fresh food and as one of the world’s leading protein companies, we’re well-positioned to provide it,” Tom Hayes, president and CEO of Tyson Foods, said in a statement.
Tyson has been expanding its processing operations as more consumers flock to poultry-based protein. The company is putting an additional $84 million into its chicken plant in Union City, Tennessee, in order to double the capacity there. The Arkansas-based company also is opening a 75,000 square foot Incubation Technology Center in Springdale, Arkansas that replaces two other nearby hatcheries.
CEO Tom Hayes has been busy transforming Tyson despite only being in the position since the beginning of the year. Along with these facilities decisions, Tyson announced plans to divest its non-meat businesses — Kettle, Van's and Sara Lee Frozen Bakery — and has reorganized around its core units of chicken, beef, pork and prepared foods. Tyson also purchased convenience and ready-to-eat foods company AdvancePierre for $4.2 billion.
Tyson's competitors also have been busy. Costco is building its first chicken hatchery and processing plant in Freemont, Nebraska, with the $300-million facility scheduled to open in April 2019. And Foster Farms is investing $30 million to expand its poultry processing facility in Farmerville, Louisiana.
While per-capita chicken consumption in the U.S. is up — Americans eat nearly twice as much chicken (89 pounds per year) than they do beef and pork (54 and 50 pounds, respectively) — the increase may be partly due to dropping chicken prices that are being blamed on oversupply.
So even though the supply of fresh chicken, and the demand for it, have both increased in the U.S., prices for the relatively inexpensive protein source are likely to fall even more once the new and expanded production capacity comes on line, with or without antibiotics.
Tyson is clearly looking to further cement is status as a major player in the protein space, and its recent facility announcements are further evidence of that. It hasn't been shy about embracing meatless proteins either.
Last year, Tyson took a 5% stake in Beyond Meat, the first time a major meat company invested in a plant protein-based company. The company also has a $150 million venture capital fund that invests in companies developing meat substitutes.
“I think the migration [toward meatless proteins] may continue in that direction,” Hayes told Fox Business Network in March. “It’s hot everywhere, people want protein, so whether it’s animal-based protein or plant-based protein, they have an appetite for it.”