In this file:
· Tyson Proving It Doesn’t Need Vegan Burgers to Make Big Bucks
· Tyson Foods Reports No Major Financial Gains from ASF Yet
· China Might Need More Pork, But U.S. Farmers Are Unlikely To Benefit
· Tyson Foods hits record high after beating estimates, prepares for China profit boost
Tyson Proving It Doesn’t Need Vegan Burgers to Make Big Bucks
Lydia Mulvany, Bloomberg Quint
August 05 2019
(Bloomberg) -- Tyson Foods Inc. is raking it in on a tried-and-true staple: old-fashioned burgers and steaks made of actual beef.
The top U.S. meat producer made a notable exit from Beyond Meat Inc.’s shareholder register right before the start-up’s stellar initial public offering in May. Soon after, Tyson announced its own faux-meat products, which are starting to flow into retail stores. But the Springdale, Arkansas-based company posted record sales and beat earnings expectations in its third quarter largely because Americans are gobbling up beef.
The robust demand sent operating margins for the red meat to a record. Moreover, the hog-killing African swine fever that’s raging in China is set to boost all parts of Tyson’s operations in 2020, including chicken, pork, beef and prepared foods. Seeing all its units, which provide diversification for the company, improve in unison is a rarity, Chief Executive Officer Noel White said on a call with analysts.
China, the biggest pork consumer, is pulling protein from around the world to make up for the supply gap. The increased exports will probably start to materialize later in the year, White said, and the company has been in talks with Chinese buyers in recent months.
“All of the proteins will benefit,” White said on the call. “Somewhere around 5% of global protein has disappeared, so whether it’s a direct benefit or an indirect benefit, regardless, it will be beneficial to us.”
Admittedly, Tyson has yet to see any real boost from the disease, and its pork business was negatively impacted in the quarter, due to rising live hog costs. Volatility is rising as trade flows shift, and no one really knows when any business boosts from the disease will come.
But the company says it expects to see the positive impacts next year. U.S. domestic protein production will rise 2%, and Tyson said export markets will absorb it. The company’s operating margins for chicken -- the cheapest substitute for pork -- will improve over this year’s 6%, while beef and pork margins will be the same or better, it said.
Meanwhile, revenues are at a record for Tyson at almost $11 billion last quarter. There’s more cattle available in the U.S., and stronger demand for beef, which lifted prices for the red meat. The company’s prepared-foods segment also saw robust demand in the first nine months of the fiscal year.
Third-quarter adjusted earnings came in at $1.47 a share, exceeding the $1.44 average analyst estimate. A lower-than-expected tax rate helped, according to JPMorgan Chase & Co. On a net basis, earnings rose 25% from the same period last year and Tyson maintained its 2019 guidance...
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Tyson Foods Reports No Major Financial Gains from ASF Yet
by Jennifer Shike, AgWeb
Aug 05, 2019
Although Tyson Foods Inc projected in May that it’s pork, chicken and beef units could all benefit late in fiscal year 2019 from increased meat demand from China, the company said on Monday that it has not reaped major financial gains yet.
The deadly swine virus, African swine fever (ASF), that has killed millions of hogs in China and is expected to create a global shortfall in pork, has kept investors and American farmers waiting to benefit from the outbreak, Reuters reported.
U.S. pork shipments to China have suffered since Beijing imposed retaliatory duties on imports last year as part of the escalating trade war between the U.S. and China.
Still, Tyson reported better profits than expected for the quarter ended June 29, as sales volumes and average prices increased for its beef and pork products.
“The African swine fever outbreak continues to take its toll on hog supplies in Asia,” said Noel White, Tyson’s president and chief executive...
China Might Need More Pork, But U.S. Farmers Are Unlikely To Benefit
Jenny Splitter, Contributor, Forbes
Aug 6, 2019
Tyson Foods released its third quarter earnings this Monday with a statement from CEO Noel White on African Swine Fever and the Chinese import market. “Given the magnitude of the losses in China’s hog and pork supplies, the impending impact on global protein supply...is likely to be a multi-year event,” said White. But don’t count on African Swine Fever to benefit U.S. pork farmers anytime soon, as barriers between between U.S. pork exports and the Chinese consumer remain firmly in place. And with China’s most recent decision to halt imports of all U.S. agricultural products, commodities like soy are threatened too.
African Swine Fever, or ASF, is a highly contagious virus that has the potential to do serious damage, with some researchers estimating Chinese pork production could fall by as much as a third because of the disease. That’s significant for a country that produces almost half of the 114 million metric tons of pork produced globally each year. At the same time, the impact may not be felt right away, if it’s even felt at all.
Lucinda Cramsey, an eighth generation hog farmer from La Belle, Missouri, says the Chinese still have plenty of untainted pork in reserve. “They’re going to make their way through those frozen pork bellies first,” she says, before we “find out where they’re going to pull their protein.” With animal scientists working tirelessly to develop a vaccine, it’s possible the virus could be wiped out before those stores are fully depleted.
If China does end up increasing its pork imports, it’s unlikely it would turn to the U.S. at this point. David Ortega, PhD, an agricultural economist at Michigan State University who has researched Chinese consumer pork preferences, says a sizable portion of U.S. pork is ineligible for export to China. “The Chinese currently prohibit imports of pork that have been given ractopamine, [a feed additive and growth additive] used readily in U.S. pork production,” says Ortega.
In July, China suspended all pork imports from Canada after finding ractopamine in a pork shipment from Canadian producer Frigo Royal Inc, as well as a number of other discrepancies. China also canceled pork orders from the U.S., which prompted a tweet from President Trump threatening a further retaliatory tariff. Now, just this week, China announced a halt to all U.S. agricultural imports, Bloomberg reports.
Thanks to the 2013 ban, European pork producers have fared far better than U.S. companies like Tyson Foods in capturing the Chinese import market. Though some U.S. pork producers have moved to phase out ractopamine from at least some of their pork production (companies like Smithfield Foods, for example, which was purchased by a Chinese firm in 2013, have partly phased it out), that’s not an industry-wide standard.
Tyson does produce some ractopamine-free pork but the company has not provided any exact numbers. “How much production Tyson has shifted to ractopamine-free...will determine how much they can supply to the Chinese market,” says Ortega, but there are other challenges too. “Even then,” he says, “the recent trade war is creating a lot of uncertainty and affecting U.S. pork exports.” Tyson, along with other chicken producers, were hoping cheap chicken exports could fill the void. But worsening trade relations may make that impossible now too.
Cramsey, who farms 200 acres and sells her pork domestically, says she created Moink, an online retail site for small farmers, as a way to decouple her business from the wins and losses of the Tyson Foods of the world. “Part of the reason we did that is to make us immune to all of these things we can’t control. I can’t control global markets, and I can’t play in them either,” she says. “So to take that control and give it back to the independent producer, we had to find a way to bypass all this other stuff.”
Despite rising expectations for pork and poultry exports, Tyson’s third quarter earnings were primarily boosted by sales of beef, Bloomberg reports...
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Tyson Foods hits record high after beating estimates, prepares for China profit boost
Tom Polansek, Reuters
August 5, 2019
(Reuters) - Tyson Foods Inc (TSN.N) reported better-than-expected quarterly earnings on Monday and reaffirmed expectations it will profit from the spread of a fatal hog disease in China, sending shares to a record high.
Tyson has not yet reaped major financial gains from the deaths of millions of pigs in China’s outbreak of African swine fever, Chief Executive Noel White said. China is still working its way through frozen meat supplies, but could begin to increase imports of U.S. pork to fill a shortfall as soon as October, he said.
Shares hit a record high of $87.27.
African swine fever is fatal to pigs but harmless to humans and has not been found in the United States.
China could also ramp up total imports of beef and poultry meat as Chinese consumers look for other sources of protein. That could help Tyson, which produces beef and chicken as well as pork.
“I think that all of the proteins will benefit,” White told analysts on a conference call.
Tyson has already held discussions with meat buyers in China, the world’s largest hog producer and pork consumer, White said.
But China’s purchases so far have fallen short of industry expectations so far after Beijing last year imposed retaliatory duties on imports of American farm products including pork as part of the escalating U.S.-China trade war.
“As China depletes its frozen inventory and starts tapping into the global pork supply in a more meaningful way, we expect Tyson to start realizing meaningful upside, likely in early FY20,” Bernstein analyst Alexia Howard said.
Higher corn prices could limit profits for Tyson...