Speaking at the J.P.Morgan Global High Yield & Leveraged Finance Conference, Tyson Foods Chief Financial Officer, Dennis Leatherby, said the company recently re-opened an idle plant and reconfigured it to produce high-end pet treats.

Dynamic Fuels, Tyson’s joint venture with Syntroleum Corp., is expected to bring its renewable diesel plant online this summer, the first of its kind in the United States.

Mr Leatherby said that Tyson has alson made significant progress in its day-to-day operations and is committed to improving its competitive position.

Mr Leatherby said in the first quarter of the financial year, Tyson Foods:

• set a first-quarter record of $0.42 earnings per share
• posted return on sales above the normalized ranges for its Beef, Pork and Prepared Foods segments
• continued the turnaround of its Chicken segment operations
• generated cash from operations of nearly $550 million
• bought back $64 million of its bonds
• reduced net debt to under $1.9 billion, down $400 million since the end of the previous quarter
• exceeded $1.5 billion in cash and restricted cash, up almost $340 million from the end of the previous quarter, and
• improved net debt/EBITDA to 1.4 times, down from 2.8 times at the end of the previous quarter

While improving its operations, Tyson also expects to benefit from market fundamentals, Mr Leatherby said.

With lower overall industry production levels, decreased imports, increased exports and lower cold storage inventories, according to USDA data, the availability of chicken, beef, pork and turkey in the US appears to be declining for the second year in a row.

“This is the first time that has happened in 40 years,” Mr Leatherby said.

“Although demand is down, supplies are down more, making for what should be a favourable pricing environment. Prices for corn and soybean meal – key inputs in chicken production – are expected to be favourable as well.”