(Bloomberg) -- Tyson Foods Inc (NYSE:TSN) said it’s expanding efforts to boost productivity as a tight labor market and smaller livestock herds prompt the biggest U.S. meat company to raise prices for consumers.
Tyson is targeting $1 billion in productivity savings by the end of fiscal 2024 and $300 million to $400 million in fiscal 2022, relative to a fiscal 2021 cost baseline, according to a statement Monday.
The company is kicking off earnings for meat producers, with rising prices for beef, pork and poultry helping offset pressure from tight labor markets that have impeded production and hit supplies. Tyson has been investing to build new chicken plants and increase use of automated technology to boost output.
“We’re pleased with the results of the first quarter and of the steps that we are taking to improve productivity,” Chief Executive Officer Donnie King said in the statement.
The company reported adjusted earnings per share of $2.87 a share for the fiscal first quarter, compared with $1.94 a year ago. The average of analysts’ estimate compiled by Bloomberg was $1.93. Sales for the quarter were $12.9 billion, compared with estimates for $12.2 billion.
For the quarter, beef prices jumped by 32% with chicken up about 20% and pork 13%.
Shares rose 3.3% before the start of regular trading in New York.
Meat companies including Tyson have been under scrutiny from the Biden Administration for the tightly concentrated industry in which a small handful of companies turn big profits while consumers pay higher food prices and farmers lose out on their share. The meat industry blames a lack of labor, high transportation costs and strong consumer demand for the upward pressure on prices.
Tyson will host a conference call with analysts at 9 a.m. New York time.
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