(Reuters) — Tyson Foods expects pork supplies to fall as much as four percent this year because of the porcine epidemic diarrhea virus.
Tyson’s quarterly profit report rose to $213 million, an increase over last year but short of analysts’ expectations.
Shares of the largest U.S. meat processor plunged on the news.
PED reduced hog supplies in Tyson’s latest quarter, but that was partially offset by heavier animal weights.
Tyson expects PED to peak in August and begin to ease in October.
Read Also
Lethbridge Polytechnic receives major donation
Multimillion-dollar donation by Hranac family aids Lethbridge Polytechnic’s research in integrated food production systems, irrigation science and post-harvest technology in Alberta
Beef sales volumes slipped 1.8 percent in the second quarter, hurt by reduced slaughter to match falling export sales.
Beef prices have soared now that the U.S. cattle herd is the smallest since 1951.
International sales are struggling.
Continued weakness in China, where Tyson is making significant investments to build poultry operations, accounted for most of the $30 million loss in the company’s international business.
“We think the worst is over and it should get sequentially better from here, but we’ll need to see demand recovery before we can predict when we’ll reach profitability in China,” said Donnie Smith, Tyson’s chief executive officer.
The company also warned that overall domestic protein production for the year ending September would decrease about one percent, mostly due to lower hog supplies.
Tyson said it expect to see a reduction of fed cattle supplies for beef of three to four percent in fiscal 2014.
The company said it expected sales of about $37 billion for fiscal 2014, above the average analyst estimates of $35.94 billion, according to Thomson Reuters.
