ST. LOUIS (AP) - Tyson Foods said Monday that its second-quarter earnings were flat compared with last year, as higher feed costs offset improving demand and higher meat prices.
The company raised prices for chicken, beef and pork, indicating that higher global grain costs are finally working their way to the grocery store meat counter. Shell-shocked consumers have been slow to start spending again on restaurant meals and prepared foods, dragging down Tyson's sales.
Despite the profitable quarter, CEO Donnie Smith warned investors that the meat industry is still facing at least months of volatility. Higher gasoline prices could crimp consumer demand. At the same time, Tyson's profits could be squeezed by higher input costs. The company expects feed costs alone to be about $500 million higher during the second half of the fiscal year than in 2010.