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and animal feed industries.
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Tyson China
Tyson Foods
on August 9, 2016

Feed prices challenge Tyson Foods in China

Corn and soybean meal prices are significantly higher in China than they are in the United States, Tyson CEO says

Tyson Foods’ operations in China has been hampered by high feed prices and a weak wholesale market for chicken, the company’s CEO said.

Donnie Smith, CEO of Tyson Foods, said during a quarterly earnings call on August 8 that the company’s business in China continues to improve over expectations every year, but it still has its challenges.

“The dynamics in that market are very difficult,” Smith said. “Corn and soybean meal are significantly higher than they are in the United States.”

Weak wholesale market in China

Tyson Foods has been moving from a more customer-driven business to a more consumer-centric business, but at the time, it is still operates largely in the wholesale market. And that market isn't as good as Smith would like it to be.

“The wholesale markets … continue to be weak and are quite a bit weaker than we would have thought the wholesale pork market would indicate. Usually those two markets move in concert. The wholesale pork market has moved up, and chicken has not moved up near as fast as the wholesale pork market has,” he said.

However, Smith expressed optimism that the company will make good strides in marketing more value-added products to the Chinese consumers. That effort is being led by Sally Grimes, Tyson’s president of international and chief global growth officer.

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