Tyson to close 2 chicken plants to boost margins


Production will be shifted to idle capacity in other plants to increase margins.

'Tyson will shut a plant in Glen Allen, Virginia, with 692 employees and a plant in Van Buren, Arkansas, with 969 employees"

“Overall sales missed analyst estimates for the quarter ending Dec. 31, when total operating margins dropped to 3.5% from 11.3% a year earlier. The company at the time said the current quarter would be weaker than the end of 2022.”


So people have decided to not eat?

How is it they have sustained over capacity with a growing population?

He is no fool who gives what he cannot keep to gain what he cannot lose.

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This is not clear at all. Until you know NO machinery was added to otherwise active plants there is no telling the output of the remaining plants.

Chicken is a commodity product. You might surmise extremely competitive. Low cost producer usually wins. Cost cutting (and improving efficiency) is necessary to survive.

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Maybe capacity was reduced based on COVID restrictions on how close workers could be arranged and now those restrictions are not required


I just wonder if there is another country bringing chickens into the USA cheaper! I may have to research this…doc

The price of chicken has come down, so I imagine plants with marginal production costs would be closed.

Evidently the USA is rapidly increasing the importation of fresh and frozen chicken. It’s to the tune of 100~200 million dollars (small number) but increasing rapidly…doc


Chicken processing is usually done close to the corn belt (ie Arkansas) or close to the customer (Delmarva).

If processing is labor intensive, you would think production in Mexico would be a big deal. Abundant low cost manpower coupled with shipping cost for corn and processed chicken.

People must be looking at it. Maybe that will be next.

Processing happens in the vicinity of where the chickens are raised for slaughter. Usually, there are a number of contracted growers in an area, so a processing plant near there is what gets built and staffed. Far cheaper to bring people into the area than ship massive volumes of live chickens long distances so they can be slaughtered and processed.

Ditto the cost of shipping corn long distances. Chicken is low cost protein. Its also a regional business. National players have multiple regional operations. Bean counters need sharp pencils.

I wonder if the Tyson plants being closed are hot spots for potential “woke/SJW outrage focus”.
Ie are the workers mostly undocumented, with some “children”?

The chicken processing plants in TX employed lots of “under the table” people.
There were lots of “estamos contratando” signs along the highways near the plants.

That was 10 years ago, last I remember paying attention.

Recently, the media outrage focus has been on plants employing “children”. Kia in Alabama. Some animal processors in IN, IA, area.
These were “under the table” children.

I wonder.

As I was reading about chicken processing, it seems that one of the big chicken companies has Chinese ownership and will be sending chickens to china for processing and then returned to the USA for sale. That makes a lot of sense. And then they guarantee that the same chickens that go over will come back. Thats what the article says anyways…doc


I think the best known Chinese player is Smithfield, who was acquired a few years ago. They are best known for their pork processing especially hams. But also engage in other meat businesses.

Chicken processed in China is likely to be exported as frozen chicken.

We have also discussed whether a robot can butcher a chicken. Most recent article said US companies are looking into it. A skilled meat cutter can get more of the high value cuts. So far robots have not been able to match human performance. But they are working on it. Getting chickens that are all the same size and uniform probably makes it easier for robots. But you see potential for AI technology to adapt.


Remember when Chicago was famous for meat packing? Twenty years ago, I was reading how beef processing had been moved out of unionized plants in places like Chicago, and into plants in union hostile “right to work” states, and filled with…lets say “not necessarily US citizen or legal resident” labor. The result was meat packing job pay dropped some 40%.

Would Mexico allow US animals, which have been pumped full of hormones and anti-biotics, in to the country? Or would they only allow it in for processing, and immediate export back to the US.

…for those who never read “The Jungle”, adulterated food is a Shiny-land “traditional value”.


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I just posted a review of the biography of Swift recently–

His strategy is pretty well described. It applies especially to beef. Only 50% of the cattle wt is beef. His very efficient plant in Chicago could ship beef sides in refrigerated rail cars east and compete with beef butchered there by selling the byproducts as margarine, buttons, fertilizer, hides, etc. Eventually he moved west to be closer to the cattle. Even now much beef is processed in Iowa and Nebraska. Now usually cut to marketable cuts packaged and ready for sale.

Missouri has pork processing and we are not right to work.

For chickens, I think you raise your own eggs in Mexico. They are now extremely careful about infections but hormone free poultry is readily available.

Swift was very demanding in keeping his plants spotless. I suspect he would deny that Swift plants were the ones described in The Jungle. He died a few years before its publication.

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Every Shiny CEO insists, in public, that his employees “are our greatest asset”. In one manager’s meeting, when I was at RS, the District Manager started talking about the “open door policy” where people, like store managers, are invited to bring their concerns to top management. A wave of derisive laughter swept the room, because we had all seen how top management reacted when someone said something management did not want to hear. I wouldn’t give a bucket of warm spit for touchy-feely things a CEO says for public consumption.

Nebraska and Iowa are “right to work” states, as is Kansas.



I didn’t know that margarine could be made with animal fat, now margarine is considered vegan…

How times change! In Two Years Before the Mast Richard Dana tells about eating tons of beef in California. The ships transported cow rawhide to the East Coast, the rest of the carcass was mostly left to rot, it had little commercial value. At least the adventurous Dana was well fed!

Despite his social standing which allowed him to join the officers aboard, Dana chose to become an ordinary seaman, that is the meaning of “before the mast.”

Richard Henry Dana Jr. (August 1, 1815 – January 6, 1882) was an American lawyer and politician from Massachusetts, a descendant of a colonial family, who gained renown as the author of the classic American memoir Two Years Before the Mast. Both as a writer and as a lawyer, he was a champion of the downtrodden, from seamen to fugitive slaves and freedmen.

Richard Henry Dana Jr. - Wikipedia.

The Captain


It still amazes me that they could take six months to sail around South America, spend a year collecting hides, sail back around to Boston and still make a profit selling to the shoe industry.


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Margarine was originally made with animal fats. The technology to harden and stabilize vegetable oils–by hydrogenation–became available after 1900. Margarine was around sooner.

Before passage of the Pure Food and Drug act (abt 1907, after The Jungle) butter was often extended with animal fats.

Lots of progress has been made but some say not enough.

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