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Restaurant Slowdown Slices Tyson's Earnings -- Update

Slower restaurant sales are making it harder for Tyson Foods Inc. to sell pizza toppings and processed meats.

Earnings in the meat giant's prepared foods division fell 29% in the most recent quarter, the company said on Monday, as it scaled back forecast profit margins for that business in the months ahead.

Tyson, the largest U.S. meat company by sales, is counting on the prepared foods business to expand outside its meatpacking roots. In April Tyson said it would pay $4.2 billion for sandwich maker AdvancePierre Foods Holdings Inc., part of a longer-term expansion into more profitable businesses that executives see as less prone to market swings.

Tyson CEO Sings Praises of Meatpacking -- Market Talk

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09:30 ET - Tyson Foods (TSN) has invested billions building a franchise in branded packaged foods products, including Ball Park hot dogs and Jimmy Dean sausages. But after a tough quarter for its prepared foods business, CEO Tom Hayes takes a moment on the 2Q conference call to praise TSN's legacy commodity meat-processing businesses as "great contributors." They're big cash generators, they're a reliable and low-cost source of raw materials for prepared foods, and they offer TSN's investors a "total portfolio," Hayes says. They're also volatile, and investors are seeing some of that with Tyson's prepared foods business, where 2Q profits fell by more than 50% from the prior year. TSN down 2.5% in early trading. (jacob.bunge@wsj.com; @jacobbunge)

STORIES OF INTEREST

Tyson Faces More Questions Over Poultry Pricing -- Market Talk

9:14 ET - Tyson Foods (TSN) says it's facing more questions over a controversial poultry pricing index that was widely used by US chicken processors to help set the price of poultry for retailers. The Arkansas company says the attorney general's office of Florida made a "civil investigative demand" to Tyson on March 1, which "related to possible anticompetitive conduct in connection with the Georgia Dock, a chicken products pricing index formerly published by the Georgia Department of Agriculture." Tyson says it's cooperating with the inquiry. The Georgia agency suspended the index in December, and rival Sanderson Farms (SAFM) in February disclosed a similar query from the Florida AG. (jacob.bunge@wsj.com; @jacobbunge)

US Corn Planting Approaches Halfway Mark -- Market Talk

16:32 ET - US farmers planted 47% of this year's corn crop as of Sunday, according to the USDA, largely in line with analyst expectations. Farmers took advantage of pockets of dry weather to proceed with fieldwork amid pouring rain in the Corn Belt. Corn planting increased from last week but is below this time last year. Farmers have planted 14% of the soybean crop and 54% of spring wheat, both behind last year. Winter wheat crop rated good or excellent declined one percentage point from last week to 53%, after late-season snow fell on the US Plains. (benjamin.parkin@wsj.com; @b_parkyn)

FUTURES MARKETS

Cattle Futures Mixed as Hogs Bounce

CHICAGO--Cattle futures were mixed on Monday as prices recovered from a sharp downward correction.

A supply pinch has sent cattle futures soaring recently. But a reversal on Friday dragged contracts down to their lower daily limits. Futures began to turn around again on Monday as wholesale beef prices rose.

CASH MARKETS

Zumbrota, Minn Hog $2.00 Higher At $40.00 - May 8

Barrow and gilt prices at the Zumbrota, Minn., livestock market today are

$2.00 higher at $40.00 per hundredweight.

Sow prices are $3.00 higher. Sows weighing under 450 pounds are $43.00-$45.00,

400-450 pounds are at $43.00-$45.00, 450-500 pounds are $43.00-$45.00

and those over 500 pounds are $47.00-$49.00.

The day's total run is estimated at 100 head.

Prices are provided by the Central Livestock Association.

Estimated U.S. Pork Packer Margin Index - May 8

All figures are on a per-head basis.

Date Standard Margin Estimated margin

Operating Index at vertically -

integrated operations

*

May 8 +$20.36 +$ 38.82

May 5 +$21.72 +$ 36.74

May 4 +$19.69 +$ 34.35

* Based on Iowa State University's latest estimated cost of production.

A positive number indicates a processing margin above the cost of

production of the animals.

Beef-O-Meter

This report compares the USDA's latest beef carcass composite

values as a percentage of their respective year-ago prices.

Beef

For Today Choice 118.1

(Percent of Year-Ago) Select 114.0

USDA Boxed Beef, Pork Reports

Wholesale choice-grade beef prices Monday rose $2.57 per hundred pounds, to $241.44, according to the USDA. Select-grade prices rose $3.32 per hundred pounds, to $222.89. The total load count was 80. Wholesale pork prices rose 97 cents, to $78.46 a hundred pounds, based on Omaha, Neb., price quotes.

(END) Dow Jones Newswires

May 08, 2017 17:25 ET (21:25 GMT)