Tyson said the rising cost of freight is starting to put pressure on all of its businesses. That means consumers will eventually feel that pressure in the form of higher prices for all its products. The company says the tight trucking market will add more than $200 million to its cost structure this year.
Chief Executive Tom Hayes says, “Freight costs have escalated as trucking capacity has tightened nationwide. We expect these costs will continue to rise as companies compete for new truckers and new federal regulations come into play.” Hayes’ announcement was made public with the release of a strong first-quarter earnings report for Tyson.
At the same time as freight costs are rising, dynamics in the marketplace are driving wages higher, pushing up the cost of labor.
Hayes adds, “These higher costs are included in our overall outlook. We’re assuming we’ll recover the majority of these costs through higher pricing.” Hayes says passing the cost through is something they have to do and ultimately, the consumer is going to pay for it at some point.
From the National Association of Farm Broadcasting News Service.