High Beef Costs Hurt Tyson Foods

Tyson Foods cautioned that tariffs and economic uncertainty are cutting into Americans’ appetite for steaks and high-price beef cuts.

Tyson said its beef prices rose 8% in its most recent quarter, while its sales volumes slipped 1%. Rising costs are turning more Americans toward cheaper options, including ground beef, chicken and precooked meals, executives for the Arkansas meat company said Monday.

“Beef is experiencing the most challenging market conditions we have ever seen,” Tyson Chief Executive Donnie King said on a conference call.

Large meatpackers such as Tyson are contending with the lowest cattle supply since 1951. The livestock shortage has driven up the cost to secure cattle from ranchers and pressured meat companies’ bottom lines over the past year. Tyson said its cattle costs jumped by about $470 million during the three months ended March 29.

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Tyson, the largest American meat supplier, said the rising costs and slower sales led to a $258 million loss in its beef business for the quarter, compared with a $35 million loss a year ago. The company’s stock was nearly 8% lower in early afternoon trading Monday.

Tyson said it is relying on its poultry business to help offset the beef-market turbulence. Its operating profit from chicken rose about 66% to $262 million during the quarter.