The diversity of the company’s portfolio prompted an analyst to ask during Tyson Foods’ May 17 presentation at the BMO Capital Markets Farm to Market Conference if management would ever consider divesting or spinning off its fresh beef and pork operations. Thomas P. Hayes, president and CEO of Tyson Foods, said it is a question that is constantly asked of the company’s management team.
|Thomas Hayes, president and CEO of Tyson Foods|
“What I would share is that, as we continue to drive the business and be the most efficient we possibly can, we have a great position to continue to generate a lot of cash from that business …,” Hayes said.
During fiscal 2016, ended Oct. 1, Tyson’s Beef and Pork business units generated 49 percent of the company’s total sales volume of approximately $37 billion. The company operates 12 beef plants and 9 pork plants and it averaged a slaughter rate of 125,000 cattle and 415,000 hogs per week during fiscal 2016. In comparison to its peers, Tyson Foods ranks as the No. 1 beef packer and the No. 3 pork packer in the United States.
“Those items have been very, very, well, embraced by all retailers and it’s increasing as a percentage of the total volume,” Hayes said.
While he expects management will continue to get the question, because of the stark differences between the prepared foods and commodity businesses, Hayes said it makes sense to keep the fresh meat business in the portfolio.