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.

By Kim Peterson May 6, 2013 12:22PM
Image: Close up of steak and salad © Image Studios, UpperCut Images, Getty ImagesAs the largest meat processor in the country, Tyson Foods (TSN) knows exactly what Americans are serving for dinner. And increasingly, steak is dropping off the menu at home.

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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Tags: FoodTSN
29Comments
May 6, 2013 1:34PM
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And I thought I was just mimicking my grandparents when complaining about a $30 6oz filet mignon last week. The same cut at the same resto was $18.95 just a couple of years ago. Dinner for three plus drinks and tip came out to $50 total. Now it's over $100. Glad to know it's not just that I'm getting old.
May 6, 2013 2:52PM
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In today's economy there isn't many working families that can afford beef  {except ground } on a regular basis. Now that the beef prices are rising hamburger helper will become chicken helper soon to be just helper. It's so nice of the White House to give out food stamps, ebt, snap to illegal aliens " sorry undocumented democratic voters" while legal citizens are struggling to put healthy food on their tables. Check out fruit prices is you want sticker shock just make sure you don't have a heart condition first.
May 6, 2013 1:11PM
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Coming soon to stores near you -  Chicken pieces @ $4.99 lb....... Whole chickens @ $13.99 each. Squirrel and possum are looking better all the time. What's next - an existence fee for air consumption?
May 6, 2013 3:13PM
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You can still find affordable beef, but you have to stray away from the more common cuts like Strip, Filet, and Ribeye. Flank steak, round steak and Sirloin Tip steak are much more affordable and with a little tenderizing, cook up to phenomenally tender and flavorful.
May 6, 2013 2:59PM
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Buy it when it is on sale and freeze or buy it in the mark down case.  I do that with all meat and you save a bunch of $$!
May 6, 2013 2:02PM
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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!

Kathy

May 6, 2013 3:16PM
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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!

May 6, 2013 1:54PM
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They still profited 95 million dollars.....next, the workers will pay for that "cut the workforce" they're probably already getting screwed @ $9.00 an hr.
May 6, 2013 7:12PM
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The biggest cause is high grain prices. Turning half our corn into bio fuel and China's growing demand for our grains, it's only going to get worse. Not sure what the solution is. We need the exports, not so sure using grain to make ethanol is a good idea.
May 6, 2013 3:03PM
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Beef just isn't worth the price the grocery stores are charging for it. Many people can only afford it when it gets a little older and gets a "reduced" price.
May 6, 2013 1:52PM
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Awwww poor babies, cutting into profits.....since they already made huge profits on beef sold previously, maybe they could give us a break and drop the price of their beef so we can start serving it more frequently.
May 6, 2013 3:41PM
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good americans  getting smart stay away from beef  that cloggs arteries  and sends  health cost threw the roof  eat your veggies  and chicken  spice it up  save your health  and your wallet
May 6, 2013 2:40PM
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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).

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I prefer a porter house smothered in BBQ chicken.
May 6, 2013 4:20PM
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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.

May 6, 2013 4:38PM
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I thought that beef consumption had been falling, and chicken rising, for decades.   Maybe its just my house.

 

May 7, 2013 9:49AM
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From the pasture,moooooo; Where happy cows live, mooooo eat mo chikin', mooooo !!
May 7, 2013 7:29AM
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Soon we will all be enjoying Soylent green. Thanks a pant load for the inflation, Bernanke!
May 6, 2013 5:45PM
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The super market for many these days is a major investment and I love whole foods but can the average person really shop there
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