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· Tyson Fresh Meats and Jacob Stern & Sons launch fats and oils JV
· Tyson CEO highlights reasons for optimism in red meat sector
Tyson Fresh Meats and Jacob Stern & Sons launch fats and oils JV
Food Ingredients 1st
11 Feb 2020
Tyson Fresh Meats, the beef and pork subsidiary of Tyson Foods , and Jacob Stern & Sons have launched a joint venture (JV), JST Global, LLC, to serve worldwide fats and oils markets. Tyson Fresh Meats, based in South Dakota, currently operates six beef plants and six pork plants in the US. Jacob Stern & Sons is among Tyson’s largest customers for animal by-products and is the largest US processor and marketer of animal fats. Specific terms of the venture have not been disclosed.
Beef and pork by-products of the fresh meats business, along with fats and oils derived from other sources, are key ingredients in thousands of products in such diverse industries as pharmaceuticals, personal care and animal nutrition, plus the rapidly developing field of renewable fuels.
“Jacob Stern and Tyson Fresh Meats have enjoyed a strong relationship for over 50 years. Combining Tyson’s vast supply of animal fats with Jacob Stern’s Texas operations is a natural evolution and positions JST Global to meet growing worldwide demand,” explains Phil Bernstein, Chairman, Jacob Stern & Sons.
“We maximize the value of every animal we harvest so that no part of the animal goes to waste,” adds Steve Stouffer, Group President, Tyson Fresh Meats. “Responsibly processing fats and oils are a key part of our business and our commitment to sustainability. This JV gives us the opportunity to continue to value-up our beef and pork production, enabling us to innovate in new untapped markets while continuing to work directly with existing animal fat customers and the emerging renewable energy market.”
Following a transition period, the marketing of all animal fats generated by Tyson Fresh Meats will be conducted by JST Global teams in Houston, Dakota Dunes and Omaha (US).
Jay Van Valen, formerly President of Jacob Stern & Sons’ Texas Division, will serve as CEO of JST Global, which will maintain its headquarters in Houston. The Jacob Stern & Sons and Tyson Fresh Meats sales teams will collaborate and the company stresses there will be a “seamless transition for customers.”
“With a secured supply, JST Global is strongly positioned to address the global demand for commodity and value-added animal fats. JST Global’s scale and broad capabilities are key differentiators that will allow us to deliver customized solutions, particularly in highly specialized markets such as renewable energy,” Van Valen adds.
Tyson Foods has been sharpening its focus on sustainable protein for some time. Last month...
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Tyson CEO highlights reasons for optimism in red meat sector
By Joel Crews, Meat+Poultry
SPRINGDALE, Ark. – In a Feb. 6 conference call with financial analysts, Noel White, Tyson Foods Inc.’s CEO, detailed how the company’s red meat segments have fared in a somewhat volatile global marketplace where animal disease, the threat of an epidemic and looming trade agreements are creating conditions that are swirling with challenges, but also opportunities. For the first quarter ended Dec. 28, 2019, Tyson earned $557 million, equal to $1.56 per share on the common stock, up from $551 million, or $1.54 per share, in the same period a year ago.
While recent trade agreements between the United States and China are allowing for more shipments of US protein to the country, remaining tariffs are preventing an even playing field with China’s other trading partners.
“If tariffs are lifted or reduced, we would likely see an acceleration of already increased global demand for US pork, beef, and chicken,” White said.
Another potential factor that could have an impact on international trade is the coronavirus outbreak. While the financial impact of the epidemic has not been determined, “We're closely monitoring news of the coronavirus,” White said. “We're actively assessing what this outbreak may mean for us.”
While Beef segment sales declined to $3.83 billion in the 2020 first quarter from $3.93 billion during the same period last year, White pointed out some bright spots in the company’s red meat sector.
“Our Beef segment produced a record adjusted operating margin of 11.2 percent in the first quarter,” he said, adding that the quality of domestic fed cattle has been excellent, which serves to add value throughout the supply chain, from producers to retailers. The higher quality benefits Tyson Fresh Meats business and especially its high-end brands, such as the Chairman’s Reserve line of beef.
“The premium programs continue to grow as a percentage of sales. Our customers and consumers are seeing the value in our quality and it's translating into increased revenue,” White said.
He added: “Our fresh meats premium programs have nearly doubled over the last five years to approximately 1 billion lbs.”
During his comments regarding the company’s outlook for the remainder of the year, White reiterated that in terms of its beef business, the company’s second quarter is traditionally lackluster. In addition to the challenges caused by winter weather in the Midwest, the drought in Australia has resulted in unexpected liquidation of herds and pushing more beef into global trade.
Looking ahead, exports from Australia are expected to decline as the country’s drought and wildfires are expected to hinder herd rebuilding there and could benefit Tyson. Meanwhile, “Our export sales continue to equal or exceed the industry growth rates,” White said, adding that for the fiscal 2020 Tyson expects its beef segment’s adjusted operating margin to be as high as 7.5 percent.
As for the other white meat, White said an ample supply of hogs and solid pork demand resulted in a 14 percent adjusted operating margin for the segment in Q1. Pork sales rose to $1.38 billion from $1.18 billion, and operating income spiked to $191 million from $95 million the year prior. Operating income for the segment is expected to be in the range of six percent to 8 percent.
While pork exports to China, where African Swine Fever has had devastating consequences, are fueling exponential growth in the company’s Pork segment, Tyson hopes to broaden its product appeal in other markets by implementing new production requirements beginning this month.
“We progress towards a ractopamine-free hog supply,” White said...