Tyson Foods blames biofuels for profit slide
Tyson Foods blamed ethanol for a drop in profits of 10 cents a share, or $23 million, in its first fiscal quarter, and the company said that uncertainty over grain prices made it impossible for the company to issue earnings guidance to analysts. Tyson said that its costs rose 3.9 percent in the first quarter compared to the same period last year, while sales increased 3.2 percent.
Ethanol was priced at $2.202 yesterday at the Chicago Board of Trade, while corn closed at $5.02 per bushel for the March contract.
Meanwhile, Tyson has stepped up its efforts to become a biofuels producer, with construction of the Dynamic Fuels biodiesel project scheduled to begin this year. The $150 million project, a joint venture between Tyson Foods and Syntroleum, is expected to be completed by 2010. The state of Louisiana recently pledged $400,000 towards construction of a rail spur serving the plant.
Also, ConocoPhillips has a partnership with Tyson to develop chicken-fat based biodiesel.
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