Tyson Foods To Raise Prices "Substantially" As Profit Suffers

[Purveyor]

SAN FRANCISCO (Dow Jones) -- Tyson Foods Inc. reported Monday its quarterly profit fell 40% from a year ago, dragged down by wider losses in its beef business and surging grain and fuel costs.

Near record-level costs for corn and soybean meal is taking its toll, and Tyson said it plans to raise costs for its chicken and beef products that account for 78% of its total sales.

"We have no other choice but to raise prices substantially," CEO Richard Bond said in a conference call. "We are raising prices because we can't absorb these costs. Despite concerns about the economy, people have to eat, and they will continue to eat protein."

Tyson boosted its fiscal 2008 grain-cost forecast to more than $500 million, 67% higher than its prior outlook issued in November. Demand for corn-based ethanol used as an alternative for gasoline is hurting Tyson's profit. It's a situation the company hasn't faced before. In the past, higher grain prices were due to supplies and were short-term, Bond explained.

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Meanwhile, the company is facing more beef slaughter capacity than available cattle as well as sluggish demand for U.S. beef overseas. It plans to cease slaughter operations at its Emporia, Kansas, beef plant in the next few weeks, resulting in 1,500 lost jobs.

---eoe---

http://money.cnn.com/news/newsfeeds/articles/djf500/200801281357DOWJONESDJONLINE000587_FORTUNE5.htm

[thereismore]

1. corn into fuel = idiotic idea. nt

[jody]

2. Related article "The Ethanol Effect: When Alternative Fuels Go Bad" and corn.

The Ethanol Effect: When Alternative Fuels Go Bad

[VP505]

3. Scratch

chicken off the shopping list. Time to start eating rabbit. :cry:

[tridim]

4. As if beef prices haven't already been on the rise?

Retail beef prices have almost doubled since 2000.

[grasswire]

5. what?

"Meanwhile, the company is facing more beef slaughter capacity than available cattle as well as sluggish demand for U.S. beef overseas. It plans to cease slaughter operations at its Emporia, Kansas, beef plant in the next few weeks, resulting in 1,500 lost jobs."

Overseas demand for U.S. beef is down? Why is that? And if that is the case, then why has hamburger in the U.S. gone up 35 percent?!

[earth mom]

6. Mad Cow. nt

[Kansas Wyatt]

10. Packing plants are grinding a lot of beef up into hamburger

Because choice cuts are not selling. Just more proof that BushCo's grandiose economy is a fraud.

[catmandu57]

11. Besides using the wrong thing to make ethanol

there was a bad ice and snow storm that devastated the feed lot herds a couple of years ago that the cattle industry has yet to recover from. Now they have a double whammy of competing with the energy market for corn, and rebuilding herds that haven't reached slaughter age yet.
I don't know why they won't give in and use hemp and switchgrass to make ethanol, it's a better ingredient and doesn't cost us our food stocks.

[notadmblnd]

7. Yeah, it's too bad they don't find some sort of common weed

to make ethanol from. something that would grow every where. Something that's not currently used currently as a food source... wonder what it could be....

[elehhhhna]

8. KUDZU! It's going places!

ding ding I win.

Actually, IIRC it's sorghum that converts best and cheaply, too.

[VP505]

9. Um, could it be

OH, I don't know, maybe hemp? No, No we can't have that Dow Chen wouldn't like that, besides someone might confuse it with another popular WEED.

[VotesForWomen]

12. companies demand ever-increasing profits, that of course come off the backs of consumers

and workers.