How Tyson Foods Is Dealing With Inflation On Ground Beef

The ongoing inflation has finally hit Tyson. In a piece scanning the horizon for the beef and pork industry's future in June, Supermarket Perimeter wrote that pressure had began to weigh on meat businesses. At that time, retailers noted how customers switched from beef in favor of cheaper chicken and pork. And, those that did stick with beef decided to shop for lower grade ground beef instead of higher quality products. 

Now, in a more recent publication, Bloomberg has reported that as Tyson entered their third financial quarter, the company has announced that their meat sales would be slowing due to the higher prices presented to the public. Such a lack of confidence caused shares to fall by 9.8%, the biggest one-day drop Tyson has suffered in two years.

Despite these issues, Reuters said Tyson has actually seen a 1.3% increase to their quarterly beef sales. Still, Bloomberg added that even the increased volume of beef sold did not reach the amount of beef Tyson sold in 2021. Yet for all the gloom of Bloomberg's coverage and the shareholders fleeing, Tyson exceeded the estimated quarterly sales number of $13.31 billion, reaching $13.5 billion.

In fact, as dour as Bloomberg is in their coverage, Forbes reported in February that the onset of inflation has led to good things for Tyson. Even though the cost of feed had risen at that time, Tyson was still making a larger operating margin than during the heyday of the pandemic. The chairman John Tyson even made $300 million more, reportedly due to inflation and a 13% increase in meat prices. 

Tyson argues that the raised prices were to offset the increased cost of production. However, the fact that the company has made a profit has brought charges of price gouging. "This is nothing new because what they've done is they've monopolized and they've monopolized on the backs of their workers, the consumers, the grocers, and all of us," State Representative Timi Brown-Powers told CBS Iowa. 

Tyson has repeatedly made the argument that market forces are to blame for this (per MarketWatch). But regardless of whether you believe Tyson or not, Tysons's fortune speaks to the fact that they have risen prices near to edge of what can be accommodated.