Please ensure Javascript is enabled for purposes of website accessibility

Tyson Warns That the Meat Supply Chain Is Cracking

By Demitri Kalogeropoulos – Apr 27, 2020 at 10:21AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It could be a while before many popular pork, chicken, and beef products are back in supermarkets.

Tyson Foods (TSN -1.51%) is experiencing a major disruption to its meat supply chain. The producer of pork, beef, and chicken brands including Jimmy Dean, Hillshire Farm, and Ball Park said in a Sunday advertisement in national newspapers that consumers can expect significant shortages across its product line due to COVID-19 challenges.

"The food supply chain is breaking," an executive explained, due to the temporary closure of meat processing plants like the one in Waterloo, Iowa, that shut down on April 22.

That closure removed a major source of demand for farmers who raise chickens, cows, and pigs for commercial processing, Tyson said at the time, and the inventory pressure has only increased since then. "There will be limited supply of our products available in grocery stores until we are able to reopen our facilities," executives explained in the weekend ad.

A woman shops for meat at the supermarket.

Image source: Getty Images.

While the supply chain challenge has pressured Tyson's stock in recent weeks, it has added to investor enthusiasm for Beyond Meat (BYND 2.88%). The plant-based meat substitute specialist recently announced a new partnership with Starbucks and is expected to report a more than 100% sales increase when it announces its quarterly earnings results on Tuesday, May 5.

Demitrios Kalogeropoulos owns shares of Starbucks. The Motley Fool owns shares of and recommends Starbucks. The Motley Fool recommends Beyond Meat, Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tyson Foods, Inc. Stock Quote
Tyson Foods, Inc.
TSN
$69.94 (-1.51%) $-1.07
Beyond Meat Stock Quote
Beyond Meat
BYND
$15.69 (2.88%) $0.44

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.