According to the CEO of Tyson (TSN), Richard L. Bond, it is cheaper for Americans to cook most food at home, but the cost of food at the supermarket is rising faster than menu prices at restaurants; 4% at restaurants and nearly 8% in the retail grocery channel. TSN has raised prices on some products, but not at the same rate of inputs costs, especially chicken prices. According to Mr. Bond, the lag of higher priced corn is just now hitting the products that TSN is introducing to the market place. Four of the largest QSR restaurant companies have introduced chicken sandwiches at breakfast.
- Cutting production - TSN has taken three facilities out of operation decreasing its slaughter capacity by 8,000 a day.
- Shrinking Herd - The chart to the right is a graphic picture of the heard size going back to 1988. As you can see the inventory of cows peaked in the mid-90s and we have seen a continuous decline since then. In 2008, the inventory will be down about 1% and down about the same amount in 2009.
- Chicken and coffee are driving breakfast transactions.......