Tyson Foods CEO Noel White said the African swine fever (ASF) outbreak is unlike any other event he has ever experienced, and that it has the potential to forever change production and consumption trends.
White discussed the outbreak while speaking during the Tyson Foods second quarter earnings call on May 6.
“This is an unusual, perhaps unprecedented time for the protein industry,” said White. “In my 39 years in the business, I have never seen an event that had the potential to change global protein production and consumption patterns as African swine fever does. The situation is fluid and fast-moving.”
Lessons learned from avian influenza outbreak
White pointed out that Tyson Foods, a major pork producer, has been working with others in the industry, as well as government agencies and pig producers, to prepare in case ASF spreads to North America.
“The threat is real, and I do think there is a distinct possibility of it coming to the United States, and we need to be prepared for that. We need to be prepared for that from a regulatory standpoint,” he said.
White does have confidence that if ASF does reach North America, or more specifically, the United States, stakeholders will work together much like they did in 2014 and 2015 when the continent was hit by a highly pathogenic avian influenza (AI) outbreak.
“When we had high path AI a few years ago, the industry and government quickly mobilized. We need to take that as a lesson and use that in case it does come here, as well as from a trade standpoint, and be talking to our trade partners,” he said.
Financial impact on Tyson Foods
The outbreak of ASF and subsequent reduction in overall animal protein supply can have both positive and negative impacts on Tyson Foods.
“The worldwide decrease in pork supply could put pressure on our Prepared Foods business, by increasing raw material costs, while offering significant upside to our Pork, Chicken and Beef businesses,” he said. “The power of our diversified business model and broad product portfolio across multiple geographies will be even more important under these circumstances.”
White anticipates that ASF will lead to increased costs for raw materials for its Prepared Foods products, to be seen in the company’s third quarter, which is underway, as well as the fourth quarter.
White said the company hopes to recover those additional costs through pricing.
View our continuing coverage of the African swine fever outbreak.