Source:  Chris Scott, MEATINGPLACE.COM, 5/17/11

Cold weather in April, record-high corn feed prices and recent flooding in the corn belt are among several factors influencing higher protein prices, Tyson Foods CEO Donnie Smith told an audience this morning at the BMP Capital Markets Farm to Market Conference in New York.

“We had a late Easter and bad, rainy weather in April, but demand (for protein) is improving,” Smith told the conference audience. “We had planned for soft demand, but we can see good results despite continued unemployment, higher grain prices and higher costs for gasoline and energy.”

Smith added that the high corn prices will continue to have an impact on protein, especially as planting so far this year is well below spring 2010 levels (63 percent vs. 87 percent last year) and floods — man-made and natural — aren’t helping. Smith also noted that 2011 is the fourth consecutive year of reduced domestic protein availability as beef exports continue to rise. He cited USDA estimates that per-capital domestic availability for beef, pork, chicken and turkey will drop to 263 pounds this year, down 7.4 percent from 2006 levels.

Noel White, Tyson’s senior group vice president of fresh meats, echoed Smith’s sentiments by noting that the uptick in demand for protein in the last few weeks is encouraging for this summer. He warned, though, that processors and retailers may hear more consumers saying that they won’t pay beyond a certain price point for meat, if those voices aren’t already being raised.

Separately, analyst Kenneth B. Zaslow of BMO Capital Markets this morning maintained the market perform rating on Tyson, with fiscal 2011 earnings of at least $2 per share achievable despite poor margins for chicken across the industry.

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