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Tyson Foods Announces
Production Adjustment
Springdale, AR (March 1, 1996)óTyson Foods, Inc. (Nasdaq:TYSNA),
the Springdale, Arkansas-based food processor, announced today its intention
to adjust poultry production volume downward by approximately seven percent
due to uncertainties in the marketplace caused by the recent curtailment
of poultry shipments to Russia and the unprecedented high costs of grain
and other feed ingredients.
Tyson Chairman and CEO Leland Tollett said that, "While our company
has been profitable for each of the first five months of this fiscal year,
the outlook for the immediate future has changed as a result of the interruption
in the shipment of U.S.-produced poultry products to Russia. For more than
eight years, our industry and our company have been supplying Russian customers
with high-quality frozen poultry leg quarters. The possible loss of this
market and the resulting impact that the disruption has already had on the
domestic market come at a time when there is an abundant supply of all meat
proteins in the market, both red meat and poultry. Additionally, feed costs
are continuing to reach historic highs, which makes a difficult situation
worse," said Tollett.
"We believe that this action is in the best interest of our shareholders,
our contract grower community, and our people. Operationally, our company
is in very good condition. However, we do expect that our second quarter
and fiscal earnings will be less than recent financial analysts' estimates.
"Because of adverse economic conditions in all segments of the meat
producing industry, we believe that industry-wide production adjustments
will be made to more evenly match supply with demand and that these actions
will consequently reduce the demand for grain and other feedstuffs.
"Our focus for the foreseeable future will be on increasing our earning
power and improving total return to our shareholders, while providing a
dependable supply of quality products for our customers and a stable environment
for our growers and people. The company's continued sales growth momentum
in our poultry business will provide a strong base for improved performance
once feed price increases abate and as our cost/market ratio becomes more
favorable.
"We have a dedicated team of people and a solid core market. We have
always been able to come out of difficult business environments as a stronger,
more profitable company," said Tollett. "I can't see this situation
as being any different than those in the past."
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