Tyson Foods profit drops 40%

Tyson Foods Inc., the largest U.S. meat processor, said Monday that its fiscal first-quarter profit plunged 40% on beef losses and higher corn costs. Earnings were better than analysts expected, and its shares rose the most in three weeks.

Net income for the three months ended Dec. 29 fell to $34 million, or 10 cents a share, from $57 million, or 16 cents, a year earlier. Sales rose 3.2% to $6.8 billion.

Tyson said corn-feed prices are the highest ever as U.S. mandates for ethanol led to record demand for the crop-based fuel. Tyson said the increase in its full-year grain costs will top $500 million, exceeding an earlier forecast of $300 million. The company’s losses on beef sales widened because meat prices haven’t kept pace with higher costs for the cattle it slaughters.

Shares of the Springdale, Ark., company rose 73 cents to $13.99.