Tyson posts another loss, warns of higher prices

Tyson Foods Inc., the world’s largest meat processor, warned Monday that rising corn prices could mean U.S. consumers would have to pay more for chicken, beef and pork next year as it ended its fiscal year with a third straight quarterly loss.

The Springdale, Ark.-based company forecast a return to profitability in the new fiscal year, which started Oct. 1, as it got a grip on costs and focused on more efficient operations. Its shares rose 4%.

“The best thing I can say about fiscal 2006 is, it’s over,” President and Chief Executive Richard L. Bond said.

Bond said the price of corn, which is used as animal feed, was going up because of demand from ethanol plants that were springing up to provide alternative fuel sources to oil.

Corn prices recently reached 10-year highs.

“I believe the American consumer is going to have to pay more for protein. We are at new levels on corn that are not likely going to be retrenching back to ’06 levels,” Bond said.

Bond said meat producers, processors and retailers would have to pass the higher grain price on to consumers because they could not absorb it in their profit margins.

Bond suggested that higher consumer prices could come when meat demand typically increases during the spring and summer.

Tyson is pursuing joint ventures in South America and China and creating a renewable energy division to generate new revenue sources.

On renewable energy, Tyson said it has created a new business unit to find ways to make money from its byproducts by converting animal fats and possibly chicken litter into biofuels.

Tyson said the loss for the quarter ended Sept. 30 was $56 million, or 17 cents a share, compared with a profit of $117 million, or 33 cents, a year earlier.

Fourth-quarter revenue was flat at about $6.5 billion in both periods.

Results were hurt by charges of 6 cents a share related to tax and accounting changes and 4 cents a share related to a cost-cutting program.

Tyson said in July that it would cut $200 million in costs, including slashing 420 jobs.

Tyson said it expected fiscal 2007 earnings per share in a range of 50 cents to 80 cents.

Its shares rose 58 cents to $14.93.