Real and fake meat share problems

TORONTO, Feb 6 (Reuters Breakingviews) - Pain in the fake meat market is starting to spread to the real one. Shares in Tyson Foods (TSN.N) fell nearly 6% in morning trade after the meat producer said earnings tanked over 70% year-over-year in the three months ended Dec. 31. The Springdale, Arkansas-based company’s operating margin was squeezed to 3.5% from 11.3% in the same quarter of the previous year, partly because prices for beef inputs spiked. That’s still much better than Beyond Meat (BYND.O), which isn’t even booking an operating profit at this point. But the two companies share a few of the same problems that aren’t going away.

The U.S. beef cow herd fell to its lowest level since 1962, according to data from the U.S. Department of Agriculture, partly because drought cut into the supply of the crop that is used to feed cows. Pea protein, a main input for Beyond’s burgers, was also hit by drought in 2021. Though the vegan version of the burger has hustled to solve its own garden-variety shortages, rising costs generally are a risk. With prices along the supply chain going up, including for transportation, consumers are making other choices. Forgoing meat – no matter the consistency – is a real problem. (By Sharon Lam)

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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