SPRINGDALE, ARK. — In the face of higher feed costs offsetting improved demand plus higher meat prices, Tyson Foods Inc. posted flat income for the second quarter. For the quarter ended April 2, the company achieved income of $159 million, equal to 42c per share on the common stock, unchanged from the second quarter of fiscal 2010. Second-quarter sales totaled $8,000 million, up 16 percent from $6,916 million during the same quarter last year.

“Overall, it was a solid quarter, and I’m pleased with the results,” said Donnie Smith, president and CEO. “We produced record sales for the second quarter on substantially higher sales prices in addition to increased volume. All segments except chicken were within or above their normalized operating margin ranges. While chicken was well below its normalized range, it was profitable, and we believe it will continue to be profitable in the third and fourth quarters. Our beef segment remains solid, and our pork segment continues to produce outstanding returns. Prepared foods is moving in the right direction, and we’ve got more work to do in this segment.

“Most exciting to me is that we still have a significant amount of opportunity to increase profitability throughout Tyson Foods,” he added. “We will continue to face challenging and volatile market conditions in fiscal 2011, but we maintain our belief that earnings should be comparable to 2010 due to our on-going operational improvements and focus on execution.”

For the six months ended April 2, the company had income of $457 million, or $1.20 per share, up 43 percent from $319 million, or 84c per share, during the same period of the previous year. Sales for the six months were $15,615 million, up 15 percent from $13,551 million during the same period of the previous year.

For the full-year 2011 the company expects sales to exceed $32 billion as the result of price increases associated with the rising raw material costs.

During a media teleconference on May 9, Smith said Tyson leadership was shocked by the devastation left by the tornados that happened several weeks ago, but he was proud of his company’s response and efforts to pitch in help in disaster relief efforts in Alabama, Arkansas, Iowa and North Carolina. “In Alabama alone, we donated 240,000 lbs. of food, about $140,000 of water and 150,000 lbs. of ice,” he said. “We also had 150 Tyson team members from seven states deployed to various locations in northern Alabama to prepare meals for those in need,” he added. “There were as many as 18 separate cooking teams operating at different times during the week following the disaster.”

When asked if Tyson processing facilities suffered any damage from the storms, Smith told MEATPOULTRY.COM, “No, we did not. Our Blountsville, Ala., plant was down a shift-and-a-half, or no more than a couple of days. And the Albertville, Ala. plant came up beginning of the middle of the week after the storm...so that plant was down five working days. The physical structures themselves did not receive an damage at all. [The temporary downtime was] purely from the electricity outage.”

When asked if he was concerned consumers will trade off on beef due to escalating beef prices, COO Jim Lochner responded, “They already have. Look at your middle meat prices compared to [before]. I think they’ll continue to shop for ground beef. I think it’s going to be supportive of chicken prices overall because that will still be a better value protein.

“It’s the interrelationship of all of [proteins] that are the most interesting,” he added. “Many people like to just think in terms of one [protein] segment. But every segment has its interesting differences. In the case of beef, middle meat is down, ground beef is up. In the case of chicken, leg quarter prices are much higher than forecasted. Breast meat prices haven’t responded yet. In the case of pork, boneless pork loins are up, they’re fairly high; they haven’t necessarily corrected ....and turkey prices have stayed high.

“For the consumer as well as our customers, who have had the luxury of having very, very favorable meat prices for a very long period of time, that has changed and will continue [to change] going forward,” he concluded.