CHICAGO (Reuters) – Tyson Foods Inc plans to resume slaughtering pigs in mid-May at a Madison, Nebraska, pork plant damaged by fire two weeks ago, the meatpacker said on Tuesday.
The extended halt to slaughtering comes as weak consumer demand for pork and low prices are squeezing margins for meatpackers and hurting hog farmers.
Tyson is continuing to divert hogs to other pork plants that would normally be slaughtered in Madison since the April 23 fire, spokesperson Liz Croston said. The Madison plant is doing limited “further processing” work, she said, after hogs are slaughtered elsewhere.
The company previously said it was repairing the plant and expected it to resume production the second week of May.
Tyson’s pork business lost $31 million in the quarter that ended on April 1, compared to a profit of $59 million a year earlier. Average sales prices for the company’s pork tumbled by 10.3% in the quarter due to reduced global demand, while sales volumes edged up because more hogs were available for slaughtering, Tyson said in an earnings report on Monday.
The meatpacker lowered its forecast for its pork unit’s adjusted operating margins to a loss of 2% to breaking even for fiscal year 2023. In February, the company projected full-year margins would be 0% to 2%.
On Tuesday, the amount of money meatpackers earn buying hogs and converting them into meat was about $5.05 per hog, compared to $7.70 per hog on Monday, analysts at HedgersEdge.com said.
U.S. meatpackers slaughtered an estimated 451,000 hogs on Tuesday, down from 470,000 hogs a week ago and 478,000 hogs a year ago, the U.S. Department of Agriculture said.
(Reporting by Tom Polansek; Editing by Bill Berkrot)