SPRINGDALE, Ark. - Tyson Foods Inc. said yesterday that it expects its profit in the current quarter to fall as much as 41 percent as the world's largest meat producer spends money to close hog farms and discontinue a brand it bought last year.
Profit for the quarter that will end Sept. 28 will range from 13 cents to 15 cents a share, Tyson said in a news release. That would be 22 cents less than in the year-earlier period.
Tyson, Smithfield Foods Inc., Hormel Foods Inc. and other meat companies have been hurt by a drought in the United States that has raised prices for grain-based animal feed and by a Russian ban on U.S. poultry imports imposed in March because of food-safety concerns.
The ban, which was lifted Aug. 23, created a glut of cheap chicken in the U.S. market that depressed demand and prices for pork and beef. Farmers had increased their hog herds in the first half of the year, adding to the surfeit of meat.
The projected decline in profit stems mostly from higher grain prices that are making it more expensive to raise chickens and hogs, said Kyle Evans, an associate analyst at Stephens Inc. in Little Rock, Ark. "It's a drought, a once-in-seven-years event they can't control," he said.
Tyson shares fell 22 cents, or 1.8 percent, to $12.19 on the New York Stock Exchange. They are up 5.5 percent this year.