Tyson Foods warns on grain prices
Tyson Foods, the US meat producer, has warned that consumer confidence has been battered by rising food costs - and that higher grain prices could cost it half a billion dollars in the year ahead.
The company raised prices for chicken, beef and pork, and said higher global grain costs were finally working their way to the grocery store meat counter.
Tyson Foods on Monday reported net income was flat at $156m (£95.39m), or 42 cents per share, in the three months ended March 31.
During the second quarter Tyson raised prices by 12.3 per cent from a year ago and on Monday maintained its 2011 outlook of $32bn in sales, up from $28.4bn last year.
Donald Smith, Tyson’s chief executive, said US consumers were making more frequent trips to smaller retail stores in an effort to manage cash flow more efficiently but that the company would continue raising prices to combat the soaring costs it faces for animal feed.
“Consumers are likely to remain conservative and hold on to many of the behaviours they adopted in the early stages of the recession,” he added.