Sector Snap: Meat shares plunge after crop report

Tyson's shares fell 82 cents, or 11.1 percent, to $6.64 in midday trading. The Springdale, Ark.-based company, the world's largest meat producer, said higher sales drove fiscal fourth-quarter profit to $48 million from $32 million a year ago and it saw gains in beef and pork but continued to struggle with poultry.

High commodity prices for corn, oil and other ingredients, are hurting meat producers. Their margins are further squeezed by an oversupply of meat on the market, which keeps prices down, and floundering demand in the restaurant industry as consumers seek to eat more at home.

But the report from the Agriculture Department on Monday predicted lower prices for corn and soybeans, even as it lowered its forecasts for this year's harvests.

Corn production now expected to be 12.02 billion bushels, below analysts' estimates of 12.08 billion and down from last month's revised estimate of 12.03 billion, the USDA said.

The soybean harvest is forecast to be 2.92 billion bushels, down from 2.94 billion, according to the USDA's November report. The new projection matched analysts' estimates.

The USDA said the average price of corn for the year is expected to be in a range of $4 to $4.80 per bushel, down from $4.25 to $5.25 per bushel last month.

Feed corn prices are likely to be pushed down with increasing global supply and expected reductions in demand, the USDA said.

Even with all that, the markets are still volatile and the costs high.

Tyson said its input costs for the year for chicken were $900 million above last year's numbers.