Tyson Foods said this week that it will continue to experience short-term disruptions because of COVID-19, and demand for food and protein will shift, "but over time we expect worldwide demand to continue to increase."
The company, which is based in Springdale, Arkansas, and has poultry processing plants in Noel and Monett, released its second-quarter numbers Monday.
"We are experiencing multiple challenges related to the pandemic," the company said in a statement. "These challenges are anticipated to increase our operating costs and negatively impact our volumes for the remainder of fiscal 2020. Operationally, we have and expect to continue to face slowdowns and temporary idling of production facilities from team member shortages or choices we make to ensure operational safety. The lower levels of productivity and higher costs of production we have experienced will likely continue in the short term until the effects of COVID-19 diminish."
The company, which operates in beef, pork and prepared food segments, as well as poultry, also said each of its segments has seen demand shift from food service to retail, but the volume increases in retail have not offset the losses in food service, and as a result it expects additional decline in volumes in the second half of fiscal 2020.
"We cannot currently predict the ultimate impact that COVID-19 will have on our short- and long-term demand at this time, as it will depend on, among other things, the severity and duration of the COVID-19 crisis," the company said in a statement.
Tyson reported sales for the second quarter of $10.9 billion, up slightly from the $10.4 billion reported for the same period a year earlier, and it reported sales for the first six months of its fiscal year of $21.7 billion, compared to $20.6 billion a year earlier.
Net income came in at $364 million for the second quarter, or 77 cents per share, and $921 million for the six-month period, or $2.43 per share. That compares to net income for the second quarter of 2019 of $426 million, or $1.20 per share, and $977 million, or $2.78 per share, for the first half of 2019.
According to Tyson's statement, the U.S. Department of Agriculture has projected an increase of 3% to 4% in chicken production in fiscal 2020 as compared to fiscal 2019.
"However, more recent data indicates that chicken production for the remainder of fiscal 2020 will be lower than those projections," the company said. "For the remainder of fiscal 2020, we do not believe pricing will improve, and we do not expect increased demand in consumer products to completely offset the expected decrease in food service."
Tyson has suspended or idled operations at several of its plants since the pandemic, including beef and pork operations in Washington, Nebraska, Iowa and Indiana. Some of those plants have resumed limited production after implementing testing and other safety protocols for workers.
It also shut down last month its Waterloo, Iowa, pork plant that is critical to the nation’s pork supply but was blamed for fueling a massive coronavirus outbreak in that region. The plant can process 19,500 hogs per day, accounting for 3.9% of U.S. pork processing capacity, according to the National Pork Board.
There has been no outbreak at the company's plants in Noel or Monett, according to the Missouri Department of Health and Senior Services, although the company has acknowledged COVID-19 deaths at a Georgia poultry plant.