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Tyson Foods — the second-largest meat and poultry producer in the United States — is struggling to keep up with inflation.
In the company’s third-quarter earnings call, CEO Donnie King told investors that the company has “seen accelerating and unprecedented inflation” threatening all of its business units.
Fox Business explains:
The Springdale, Arkansas-based food products company last quarter hiked its average price for pork by 39%. Beef and chicken prices jumped by 12% and 16%, respectively.
Tyson is planning to raise retail prices on Sept. 5 after already having increased prices for restaurant customers. While grain costs and the cost of goods sold are projected to peak in the fourth quarter of this year, the company cannot rule out further price increases, according to King.
The firm’s $12.48 billion revenue greatly surpassed analysts’ prediction of $11.49 billion — a reality driven by higher prices for consumers.
Other food companies — including Nestlé, the world’s largest food and beverage company — unveiled price hikes to continue pacing with inflation. CEO Mark Schneider explained to journalists on Thursday that “what we’ve seen this year is some kind of a turning point, where after several years of low inflation, all of a sudden it accelerated very strongly.”
Some businesses are grappling with the rising price levels by selling their items in smaller packages while maintaining the same price — a phenomenon known as “shrinkflation.” Walmart’s Great Value Paper Towels did not alter prices while reducing the number of sheets per roll from 168 to 120; Frito-Lay reduced the typical bag of Doritos from 9.75 ounces to 9.25 ounces; General Mills shrank its “family size” boxes from 19.3 ounces to 18.1 ounces.
The aggregated effect of rising prices is impacting Americans’ budgets — despite robust nominal wage growth following COVID-19 and the lockdown-induced recession.
The Bureau of Labor Statistics recently found that “average hourly earnings” in the United States jumped by 3.6% between June 2020 and June 2021. However, when considering inflation — specifically through the Consumer Price Index, which has risen by 5.3% since June 2020 — “real average hourly earnings” have diminished by 1.7% over the past year.
The decline in real wages has been worsening for most of this year. As of December, real average hourly earnings had risen year-over-year by 4.2%. In January, February, March, April, and May, the year-over-year rates dropped to 3.8%, 3.4%, 1.6%, -1.7%, and -2.6%, respectively.
In an interview with The Daily Wire, Rep. Kevin Brady (R-TX) — the Ranking Member of the House Ways and Means Committee — told Americans to observe whether families would “continue falling farther behind with their buying power” under President Biden’s leadership.