Analysis Feature
Tyson makes profit due to poultry meat market
Tyson is profitable again after difficult years. The success is exclusively attributed to the poultry meat market. Particularly the beef market was not favorable to the company, but the pork meat division also reported losses.
For the fiscal year 2023/24, the company made a profit of $1.4 billion. Last year, Tyson was still in the red with a negative balance of $395 million. Revenue slightly increased. In 2024, total revenue reached $53.3 billion, compared to $52.9 billion the previous year.
Strong poultry meat market
Tyson owes its strong performance to good results in the poultry meat market. The company made a profit of $988 million in its poultry meat department. This is significantly better than last year's result. The American poultry meat market is clearly showing better results.
Feed prices improved significantly (read: lower) in the 2024 fiscal year. As a result, the slaughter rate increased by 0.7% compared to the previous year, and slaughter weights also increased by an additional 2%. Moreover, the sector easily managed to sell the increased supply. The American poultry meat market also benefits from consumers who, after two years of strong inflation, still choose affordable alternatives.
Beef market proves to be weak spot
Both the beef and pork meat departments experienced losses. Particularly the beef market is eating into the companies' profits. The tight American beef market is the cause of this. Earlier this year, the beef cattle herd was the smallest since 1951. As a result, beef prices have risen significantly more than pork prices. Substantial exports from Brazil and Australia are putting significant pressure on beef prices. The company lost a total of $381 million in the beef division.
The pork meat division incurred a loss of $40 million. This is significantly better than the previous year when the loss was $139 million. In addition to the recovery of pork prices, stronger exports contribute to the recovery. Compared to last year, the situation has clearly turned around. In 2023, Tyson lost $770 million in the poultry meat market, while the loss in the beef market of $91 million was the lowest.
Beef market deteriorates, pork market improves
Tyson expects the American beef market to remain the bottleneck for the meat sector. The USDA expects American beef production to decline by another 2%. As a result, Tyson anticipates a loss of $200 to $400 million for the beef division.
On the other hand, the American pork market seems to be improving. With prices rising, Tyson expects an improvement in pork supply. The company predicts that American pork production will increase by about 2%. Therefore, the company expects the pork division to be profitable again. Tyson foresees a profit of $100 to $200 million.
Poultry meat remains the driver of success
Meanwhile, poultry meat production continues to be the driver of success in 2025. The USDA expects meat production to increase by 3% in 2025. Tyson expects this growth to translate into a profit of between $1 and $1.2 billion in the fiscal year 2025. This prediction comes with some caveats. In the fiscal years 2022 and 2023, bird flu caused significant problems. Tysons fiscal year 2024 was calmer in that regard, but bird flu has returned. It is therefore not unlikely that the disease will impact profits in the American poultry sector.
Matthijs Bremer
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