BOSTON —Tyson Foods’ challenged chicken business is improving and is a little more than halfway to where Leland Tollett, chief executive officer, wants it to be, according to The Associated Press.
In January, Mr. Tollett returned to the Springdale, Ark.-based company he used to lead to help weather the downturn in the meat industry. He told investors on Sept. 9 at the Barclays Capital Back to School Consumer Conference in Boston that Tyson continues to improve its chicken business, but it still has a long way to go. Tyson is using industry statistics, showing things like decreased supply, as a guide to make sure it is running the business well, he said.
"We're looking at every single dynamic or every single parameter that you measure in a business, if it's yield or eggs produced or all that sort of thing, and we measure ourselves against the very best high standard we can find," he said.
Since at least last year, the U.S. meat industry has been hurting, after feed costs soared to record highs in the summer. An oversupply of meat on the market meant companies weren't able to raise prices to help offset the, causing their profits to shrink or in some cases, disappear. Particularly hard-hit was the chicken industry because it is considered a low-margin business. However, ingredient costs have since fallen and supply cuts are taking place, which means the chicken business is starting to become profitable again.
Last week, rumors in the media claimed Brazilian beef giant JBS SA was close to buying Pilgrim's Pride in a deal worth as much as $2.5 billion. These rumors prompted concerns by analysts that such a buyout would restore Pilgrim's Pride to its previous size and reverse supply cuts the industry has taken.
Mr. Tollett, however, said he expects Pilgrim's Pride — no matter who owns it — to keep the cuts in place. "The company closed some factories and seem to be very disciplined about the idea of leaving them closed," he added.