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At a time when demand from restaurants is rebounding as they launch new menu items to bring back customers lost during the pandemic, raising meat prices to combat higher labor and transportation costs has greatly benefited U.S. meatpackers.
In the quarter, Tyson said average beef prices were up nearly 32%, offseting a decline in volume caused by supply chain constraints. This helped Tyson’s operating margin grow to 11.3%, up from 6.7%, a year earlier.
The higher meat prices has, however, had the Biden administration concerned as profits continue to mount at meatpackers.
Analysts have said increased operating margins could attract more unwanted scrutiny from Washington for Tyson and three other industry behemoths that slaughter about 85% of grain-fattened cattle carved into steaks for consumers.
Overall sales for beef rose about 25% to $5 billion, helping Springdale, Arkansas-based Tyson’s sales rise 23.6% to $12.93 billion in the first quarter ended Jan. 1. Analysts on average were expecting revenue of $12.18 billion, according to IBES data from Refinitiv.
Net income attributable jumped to $1.12 billion and excluding items, Tyson earned $2.87 per share, also beating estimates of $1.95 per share.
