Tyson stock falls in response to higher corn prices
Speculation regarding increased feed costs leads to biggest drop in 13 months
Tyson Foods Inc. saw its stock fall the most in 13 months due to speculation that raising corn prices will lead to higher animal feed costs.
The company fell 6.9% to $15.85, the biggest drop since July 20, 2009. Corn futures, meanwhile, rose to $5.1725 a bushel, the highest price since Sept. 30, 2008. "We believe rising grain costs are likely weighing on protein margins," said Morgan Stanley Analyst Vincent Andrews. "The bias to corn prices remains to the upside, and we do not expect protein players to fully pass through higher feed costs." Andrews also said that slow food service demand might make it difficult for meat processors to pass on higher costs to customers, and that record levels of so-called choice beef may weigh on prices for all meats.