Tyson Foods slowed chicken processing after recalls, raising costs
By Tom Polansek, Reuters
via Investing.com - Sep 04, 2019
(Reuters) - Tyson Foods Inc (N:TSN) slowed chicken processing this year after it recalled millions of pounds of poultry over concerns they contained materials like rubber and metal, raising its costs, Chief Executive Noel White said on Wednesday.
The higher costs contributed to a $220-million cut to the company's expected adjusted earnings for 2019 on Tuesday, White said at an investor conference. Almost half of the cut was linked to Tyson's poultry business, he said, providing new details on the adjustment.
Tyson is also grappling with volatility in prices for grain used to feed chickens and a fire that shut a large beef plant in Holcomb, Kansas.
Shares of the company sank 5% to $88.56 in morning trading.
"It was extremely unusual to have that number of events within one quarter," White said.
The slowdown in chicken production shows the financial pain that can stem from recalls of products suspected of being contaminated with foreign objects.
Tyson recalled nearly 12 million pounds of frozen, ready-to-eat chicken strips in May and 40,000 pounds of chicken patties in August.
The company wanted to ensure its products are safe and has implemented "corrective measures" to get its chicken plants back at full production, White said.
"That came at a pretty significant cost," he said at the conference, without providing details...