Good News For Tyson Foods On Monday As They Hit Record High Sales
According to activity on the US Stock Exchange on Monday, Tyson Foods Logged a better than expected quarterly earnings. Some experts believe the profit margin for Tyson is a direct result of the African Swine Flu, The flu has cost millions of dollars of hog revenue to China and other countries around the globe.
The CEO of Tyson Foods, Noel White, wanted it made clear, these profits are not a direct result of the fatal hog disease. White said that China is still utilizing their frozen pork meat supply.
They have not yet had to deal with new pork sources outside of their frozen supply. However White said he has had indicators that China would be buying pork from Tyson and other American farmers in October.
Trade relations between China and the U.S. remain frosty as the two countries exchange jabs. White also said other countries who normally buy pork from China will find their way to Tyson too.
Shares Of Tyson Foods Hit A Record High Of $87.27 Per Share On Monday
The African Swine Flu is fatal when a pig catches it, it’s harmless to humans. There has been no evidence of the disease in the United States thus far.
Industry experts on Monday surmised that China may start to export more pork and chicken in response to the African Swine Flu. Chinese consumers are very ‘leery of pork right now’, so they are looking for other protein sources.
Tyson also produces beef and pork in addition to their flagship chicken. White participated in a conference call with analysts on Monday. He said all different types of protein producers will gain as a result of the African Swine Flu.
White during the call revealed that Tyson officials have been in talks with Chinese pork buyers. An analyst with Bernstein, Alexia Howard, believes that China is nearing the end of it’s frozen pork supply.
Up to this point China’s purchase of pork from U.S. Farmers has not come to close to expectations. Many blame the trade wars on the lack of sales. However Howard says ‘as soon as China’s frozen pork supply dwindles and ends, other sources have to be found.
Experts Believe U.S. Pork Farmers Will See Increased Purchases From China
Howard predicts that China will be buying pork from the U.S. As there appears no sign of stopping the disease there. She said, “as China depletes it’s frozen units, and starts tapping into the global pork supply in a more meaningful way. We do expect that Tyson to start realizing meaningful upside, likely in early 2020.
One wrinkle in these positive predictions is the higher price of corn, chickens feed on corn, it’s their man food source. As far as Tyson, the higher corn prices, could figure into their final profits. Another issue is how much corn will be available after a frustrating planting seasons due to unseasonable high rain levels.