Americans are giving up steak for chicken
Tyson Foods is selling less beef and more chicken, which is hurting profit. The company cut its sales outlook for the rest of the year.
Shares of Tyson were down nearly 5% Monday after the company posted poor earnings and cut its sales outlook for the rest of the year.
Shoppers and restaurants are turning away from pricey beef and opting for chicken instead. Some appear to be moving away from meat altogether.
Tyson's beef volume in the second quarter fell 3.9%, while pork fell 2.2%. Chicken volume rose, but only by 0.1%.
And that's cutting into profit margins at Tyson. Gross margin fell to 4.85% from 6.47% a year earlier. "Our beef segment suffered margin compression as consumers opted for the relative value of chicken," CEO Donnie Smith said in a statement.
American shoppers will pay only so much for beef, and we may have hit that threshold. Wholesale beef prices hit an all-time high last week as summer approaches, Reuters reports. The price of choice beef, also called the "cutout," was nearly $202 per 100 pounds.
That record wholesale price will probably send the supermarket price for beef even higher. The average retail price for beef already hit a record $5.30 per pound in March, according to Reuters. The previous high was $5.15 per pound, set in November.
It doesn't help that the U.S. cattle population is at its smallest level in more than 60 years, one analyst told Reuters.
The trends were clear enough that Tyson cut its full-year sales forecast to $34.5 billion from $35 billion.
For the quarter, the company's profit fell 43% to $95 million, or 44 cents a share, from $166 million a year earlier. Sales rose by nearly 2% to $8.42 billion. Analysts were looking for profit of 45 cents a share on $8.58 billion in sales.
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Talk about a poor journalism job. If steak and pork are down, but the chicken rise is miniscule, obviously we aren't switching to chicken.
Maybe you should check out lettuce growers!
I like chicken well enough...quite well actually. But...replace my steak with it? ROTFLMAO! Not gonna happen! This article must have been commissioned by the chicken farmers or sellers of America!
Given a choice between a nice steak and a slab of chicken...the cow dies, the chicken lives! I'm eating the cow!
I'm not sure how good a measurement Tyson is since they're more well known for chicken, not beef.
Aside from price, on the one hand, beef needs to be eaten in moderation anyway; on the other hand, eating lean beef, baked potato and a salad a couple times a week can help in weight control(disclosure: I just have that meal once, but I notice the difference with that).
So, just like fish, once everyone 'figures' out that chicken is a better value, we will once again have supply and demand and then chicken won't be an affordable choice. So, what's next??? I guess we can all go vegetarian, and then, oh yeah, the cost of vegetables will be higher than they already are.
I thought that beef consumption had been falling, and chicken rising, for decades. Maybe its just my house.
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