Tyson Foods, Inc. (NYSE: TSN)released its outlook for its fiscal year 2018, reporting a lowered adjusted earnings for fiscal year 2018, between USD 5.70 to USD 6.00 per share, down from USD 6.55 to USD 6.70 per share. The Company attributes the lowered adjusted earnings to recent changes in global trade policies.
“The combination of changing global trade policies here and abroad, and the uncertainty of any resolution, have created a challenging market environment of increased volatility, lower prices and oversupply of protein. We will continue to watch these conditions carefully,” the Company said in a statement.
According to the Company’s updated fiscal outlook for fiscal 2018 statement, increased tariffs impacting domestic and export pork and chicken prices as well as uncertainty in trade policies, increased volatility in the commodity markets, and sluggish domestic chicken demand due to competitive prices are to blame for the lowered projections.
Mexico imposed a 10% tariff on chilled and frozen pork muscle cuts that became effective June 5, and increased the tariff to 20% earlier this month. China slapped an additional 25% retaliatory tariff on USD 34 Billion worth of U.S. imports in response to the Trump administration’s tariffs on Chinese imports. These actions affect U.S. agriculture directly as other countries attempt to have these newly imposed tariffs reversed.
Following the release of the updated outlook for fiscal year 2018, Tyson shares fell 7%, reaching a 52-week low on Monday.