I've previously addressed the impact of the corn crunch on ethanol producers like Archer Daniels Midland
Shares of Tyson Foods
In Tyson's fiscal third quarter, gross margin ran a thin 3.8%, and net margin was virtually zero. Let's look at each segment to gauge where the company needs to beef up profitability.
While Tyson's chicken segment passed the biggest price hikes on to customers, the 6.9% improvement wasn't nearly enough to offset the huge jump in grain costs. The chicken business ran at a loss for a second straight quarter.
Mark-to-market accounting belied some brawny beef results. With the recent lifting of the South Korean import ban, management has a new international outlet for its choice cuts, and expects to make much moo-lah going forward.
Pork also turned in a praiseworthy performance, with particularly strong exports to places like Mexico and Japan. The internationalization of Tyson is a major theme lately. The company has already established two joint ventures this year, in China and India, and says there are more waiting in the wings. Exports, along with renewable energy projects with the likes of ConocoPhillips
I'm not tripping over myself to pick up shares of Tyson, or any other name in the poultry or livestock spaces today, for that matter. Those input costs are simply killer. If I had to buy something today, it would probably be Sanderson Farms