Tyson Foods FY 4Q15 Earnings Call Notes

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Tyson Foods’ (TSN) CEO Donnie Smith on Q4 2015 Results

Big decline in cattle futures at the end of the fiscal year

“in the last couple of weeks of the fiscal year, there was an unprecedented decline in the live cattle futures market, resulting in $70 million in losses from mark-to-market positions and an LCM inventory charge.”

Pork volume up as pricing down

“In the retail channel, we are seeing increase featuring of Pork as pricing has come down. For the most recent year-over-year comparison, fresh Pork volume was up 6% on 2% lower pricing. ”

Beef margins will be pressured because low cattle supply but excess industry capacity

“You’ve got relatively low cattle supply, you’ve got too much — well, not to say too much, probably not the right way to say it, but you’ve got excess industry capacity. And that limits our ability to drive margins above the 1.5% to 3%, we think. ”

We feel good about pork but there is competition from forex impacts

“We feel very good about pork. There’s going to be good hog availability which by the way provides good cheap raw materials for our Prepared Foods business. But this is just a cautionary note on exports and the high dollar and competition from other regions in the world for some primary markets. So that’s the cautionary note there. If some of that changes, then obviously there’s upside in our Pork segment.”