TSN Tyson Foods

By Jacob Bunge and Micah Maidenberg 

Tyson Foods Inc. expects meat prices to face continued pressure over the next year, as the U.S. protein industry grapples with rising supplies and trade disputes, executives said.

Lower meat prices led the Arkansas-based company to reduce its 2019 sales forecast by $1 billion to $41 billion. The company expects a continued boom in beef profits to offset challenges facing its poultry and pork divisions, keeping its profit steady in fiscal 2019.

Tyson, the largest U.S. meat supplier by sales, this year has dealt with rising freight costs, swinging agricultural commodity markets and trade disputes that have pushed domestic meat stockpiles higher.

While Tyson has been able to raise prices on some of its own products and its beef and pork export volumes have been strong, pressure on prices will continue, said Noel White, Tyson's chief executive.

"We expect another good year, but not without challenges," Mr. White said Tuesday on a conference call.

U.S. production of poultry and red meat are set to rise this year by a combined 2.4%, according to U.S. Agriculture Department estimates. New and expanded processing plants are projected to drive pork and chicken production to record levels this year, while beef supplies have also grown. That has ramped up competition between products such as ground beef and chicken breasts in grocery store meat cases and on restaurant menus.

For the year ahead, Tyson projected that its adjusted profit would be $5.75 to $6.10 a share, comparable to 2018's level. That projection, Tyson Chief Financial Officer Stewart Glendinning said, depended on no major shifts in the cost of grain required to feed poultry and livestock, and no further deterioration in chicken prices.

Tyson shares fell 6.7% to $57.40 in morning trading Tuesday.

Tyson said Tuesday it booked $9.99 billion in sales during its fiscal fourth quarter, less than the $10.3 billion analysts polled by FactSet were expecting.

Overall, the company said average prices for its products fell 4.1% during the quarter.

For the period ended Sept. 29, Tyson reported a profit of $537 million, or $1.47 a share, compared with $394 million, or a $1.07 a share, a year earlier. On an adjusted basis, Tyson earned $1.58 a share, compared with expectations of $1.33 a share.

Write to Jacob Bunge at jacob.bunge@wsj.com and Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

November 13, 2018 12:08 ET (17:08 GMT)

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