Tyson Foods, which produces about one-fifth of the U.S. chicken supply, has struggled to meet demand and turn a consistent profit in recent years, according to a The Wall Street Journal report.
“We’ve not been where we want to be from a performance perspective, from an execution perspective,” said Donnie King, CEO of Tyson Foods, in a statement.
The largest issues that the company faces are inconsistent leadership caused by a revolving door of CEOs in the last few years, problems hatching chickens, and issues keeping up with competitors.
Recent steps under the newest CEO, who pledged to stay in the position for at least five years, are trying to breathe life back into the company, which is recovering from a $625 million operating loss in its chicken business for the 2021 fiscal year.
Plans to bring the company back on track include spending $1.3 billion to automate parts of the processing-plant production line, $1 billion in cuts in costs from the company overall by 2024, and enhanced process efficiencies like increased reclamation of oil from chicken nuggets which is expected to save $200,000 per month.
The decreased chicken hatch rates also found that a new male breeder made to produce more efficient chickens exhibited the negative externality of producing much more unhatched chickens, which Tyson indicates may be fixed by using two chicken breeds which had previous success.
Despite process improvements, analysts at Piper Sandler Cos. believe that Tyson’s progress in chicken will likely be “more than offset by declining profits from its beef and port divisions, according to the report. Full Story (Subscription Required)
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