Tyson Foods 2015 Annual Report Download - page 4
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Please find page 4 of the 2015 Tyson Foods annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Pork: Porkincludesouroperationsrelatedtoprocessinglivemarkethogsandfabricatingporkcarcassesintoprimalandsub-primalcutsandcase-readyproducts.
Productsaremarketeddomesticallytofoodretailers,foodservicedistributors,restaurantoperators,hotelchainsandnoncommercialfoodserviceestablishments
suchasschools,healthcarefacilities,themilitaryandotherfoodprocessors,aswellastointernationalexportmarkets.Thissegmentalsoincludesourliveswine
group,relatedalliedproductprocessingactivitiesandlogisticsoperationstomoveproductsthroughthesupplychain.
Prepared Foods: PreparedFoodsincludesouroperationsrelatedtomanufacturingandmarketingfrozenandrefrigeratedfoodproductsandlogisticsoperationsto
moveproductsthroughthesupplychain.OnAugust28,2014,wecompletedtheacquisitionofHillshireBrands,amanufacturerandmarketerofbranded,
convenientfoodswhichincludesbrandssuchasJimmyDean®,BallPark®,HillshireFarm®,StateFair®,Van's®,SaraLee®andChefPierre®piesaswellas
artisanalbrandsAidells®,GalloSalame®,andGoldenIsland®premiumjerky.HillshireBrands'resultsfromoperationsarereportedinthePreparedFoods
segmentfromthedateofacquisition.Productsprimarilyincludepepperoni,bacon,breakfastsausage,turkey,lunchmeat,hotdogs,pizzacrustsandtoppings,flour
andcorntortillaproducts,desserts,appetizers,preparedmeals,ethnicfoods,soups,sauces,sidedishes,meatdishes,breadsticksandprocessedmeats.Productsare
marketeddomesticallytofoodretailers,foodservicedistributors,restaurantoperators,hotelchainsandnoncommercialfoodserviceestablishmentssuchasschools,
healthcarefacilities,themilitaryandotherfoodprocessors,aswellastointernationalexportmarkets.
RAW MATERIALS AND SOURCES OF SUPPLY
Chicken: Theprimaryrawmaterialsusedinourdomesticchickenoperationsarecornandsoybeanmealusedasfeedandlivechickensraisedprimarilyby
independentcontractgrowers.Ourvertically-integratedchickenprocessbeginswiththegrandparentbreederflocksandendswithbroilersforprocessing.Breeder
flocks(i.e.,grandparents)areraisedtomaturityingrandparentgrowingandlayingfarmswherefertileeggsareproduced.Fertileeggsareincubatedatthe
grandparenthatcheryandproducepullets(i.e.,parents).Pulletsaresenttobreederhouses,andtheresultingeggsaresenttoourhatcheries.Oncechickshave
hatched,theyaresenttobroilerfarms.There,contractgrowerscareforandraisethechicksaccordingtoourstandards,withadvicefromourtechnicalservice
personnel,untilthebroilersreachthedesiredprocessingweight.Adultchickensaretransportedtoprocessingplantswheretheyareslaughteredandconvertedinto
finishedproducts,whicharethensenttodistributioncentersanddeliveredtocustomers.
Weoperateourownfeedmillstoproducescientifically-formulatedfeeds.Infiscal2015,corn,soybeanmealandotherfeedingredientsweremajorproduction
costs,representingroughly64%ofourcostofgrowingalivechickendomestically.Inadditiontofeedingredientstogrowthechickens,weusecooking
ingredients,packagingmaterialsandcryogenicagents.Webelieveoursourcesofsupplyforthesematerialsareadequateforourpresentneeds,andwedonot
anticipateanydifficultyinacquiringthesematerialsinthefuture.Whileweproducenearlyallourinventoryofbreederchickensandlivebroilers,wealso
purchaselive,ice-packedordebonedchickentomeetproductionandsalesrequirements.
Beef: Theprimaryrawmaterialsusedinourbeefoperationsarelivecattle.Wedonothavefacilitiesofourowntoraisecattlebutemploycattlebuyerslocated
throughoutcattleproducingareaswhovisitindependentfeedyardsandpublicauctionsandbuylivecattleontheopenspotmarket.Thesebuyersaretrainedto
selecthighqualityanimals,andwecontinuallymeasuretheirperformance.Wealsoenterintovariousrisk-sharingandprocurementarrangementswithproducers
tosecureasupplyoflivestockforourfacilities.Althoughwegenerallyexpectadequatesupplyoflivecattleintheregionsweoperate,theremaybeperiodsof
imbalanceinsupplyanddemand.
Pork: Theprimaryrawmaterialsusedinourporkoperationsarelivehogs.Themajorityofourlivehogsupplyisobtainedthroughvariousprocurement
relationshipswithindependentproducers.Weemployhogbuyerswhomakepurchaseagreementsofvarioustimedurationsaswellaspurchasehogsonadaily
basis,generallyafewdaysbeforetheanimalsareprocessed.Thesebuyersaretrainedtoselecthighqualityanimals,andwecontinuallymeasuretheir
performance.Webelievethesupplyoflivehogsisadequateforourpresentneeds.Additionally,weraiseasmallnumberofweanlingswinetoselltoindependent
finishersandsupplyaminimalamountofmarkethogsandliveswineforourownprocessingneeds.
Prepared Foods: Theprimaryrawmaterialsusedinourpreparedfoodsoperationsarecommoditybasedrawmaterials,includingchicken,beef,pork,turkey,
corn,flour,vegetablesandothercookingingredients.Someoftheserawmaterialsareprovidedbyourothersegments,whileothersmaybepurchasedfrom
numeroussuppliersandmanufacturers.Webelievethesourcesofsupplyofrawmaterialsareadequateforourpresentneeds.
SEASONAL DEMAND
Demandforchicken,beef,andcertainpreparedfoodsproducts,suchashotdogsandsmokedsausage,generallyincreasesduringthespringandsummermonths
andgenerallydecreasesduringthewintermonths.Porkandcertainotherpreparedfoodsproducts,suchaspreparedmeals,meatdishes,appetizers,frozenpiesand
breakfastsausage,generallyexperienceincreaseddemandduringthewintermonths,primarilyduetotheholidayseason,whiledemandgenerallydecreasesduring
thespringandsummermonths.
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