Tyson Foods posted sales of US$10.88 billion for its fiscal second-quarter, up 4% year-on-year. Net income declined to US$364m, or US$1 a share, down from US$426m, or US$1.17 a share, in the same quarter of the previous fiscal year. Shares of Tyson Foods are reported to have declined 8% upon the announcement of results. Overall, all meat segments combined, sales volume grew 2.6% and prices rose 1.6%, while beef sales volumes rose 2.7% in the quarter due to stronger demand for beef products, according to the meatpacker. However, beef sales volume decreased for the first six months of fiscal 2020, attributed to a reduction in live cattle harvest capacity as a result of a fire that caused the temporary closure of a production facility for the majority of the first quarter of fiscal 2020.

Average sales price for beef is said to have remained relatively flat in the second quarter and increased in the first fiscal half as beef demand remained strong. According to Tyson Foods, the beef segment’s operating income in the second quarter decreased as the result of volatile market conditions, increased operating costs and approximately US$55 million of derivative losses, but increased in the first six months of fiscal 2020 as the company continued to maximise its revenues relative to live fed cattle costs, partially offset by increased operating costs, derivative losses and US$16 million of net incremental costs from a production facility fire.

“During the quarter, we witnessed an unprecedented shift in demand from foodservice to retail, temporary plant closures, reduced team member attendance, and supply chain volatility as a result of the virus. Despite these challenges, we were able to adjust our product mix and redirect products to the appropriate channels”, said Noel White, CEO, Tyson Foods. “While we cannot anticipate how long the challenges presented by Covid-19 will persist, we remain focussed on driving long-term growth. Our solid balance sheet, ample liquidity, scale and diversity continue to give us confidence in our long-term outlook”, he added.

According to local media, Tyson Foods’ plant in the U.S. state of Tennessee currently has 298 cases of coronavirus, with outbreaks also reported at the company’s other plants, including in Illinois, Iowa, Kentucky, Maine, Nebraska and Washington.