Higher operating costs and losses at its Lakeside Packers plant at Brooks, Alta., have hit U.S. meat packer Tyson Foods in its second-quarter results, the company reported Monday.
The company said in its report for the second quarter ending March 29 that its operating results for Q2 and for the first half of the year were “negatively impacted” by higher costs at Lakeside, one of Canada’s largest beef packing plants.
Tyson’s overall beef sector posted an operating loss of $11 million on $3 billion in sales (all figures US$) for the quarter. Across all its divisions, the company posted a Q2 net loss of $5 million on $6.61 billion in sales. That’s down from a net profit of $68 million on $6.5 billion in the year-earlier period.
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Tyson CEO Richard Bond was quoted Monday by Reuters as saying Canada was “a major detractor to our overall beef segment.
“We are working to resolve these problems, but it is going be a slow process,” the news agency quoted Bond as saying, citing high labour costs due to the attraction of Alberta’s oil patch, as well as increased costs and lower-valued exports due to the rising loonie.
Furthermore, Bond was reported as saying during a conference call on Tyson’s earnings, “there is a declining number of cattle that are going to be available for slaughter in Canada. That is a problem and it is going to be a continuing problem.”
Tyson said in a release that its Q2 operating results on the beef side also included charges of $17 million for restructuring of its plant at Emporia, Kansas, plant, plus $8 million related to an “impairment of packaging equipment.”
