Rising Freight Costs Leading Tyson To Consider Higher Prices

Tyson Foods said rising freight costs are affecting all of its businesses and eventually will be felt by the consumer in the form of higher prices for its products.The company estimates that the tight trucking market will add more than $200 million to its costs this year, Chief Executive Tom Hayes told analysts on a conference call Thursday.“Across all segments freight costs have escalated as trucking capacity has tightened nationwide. We expect these costs to continue to rise as carriers compete for drivers and new federal regulations come into play,” Hayes said, following the release of a strong first-quarter earnings report.“At the same time, marketplace dynamics are driving wages higher and pushing up our labor costs,” the CEO continued. “These additional costs are included in our outlook. However, we’re assuming we’ll recover the majority through pricing.”Hayes said Tyson is now working on adjusting pricing to address the freight issue. “It is something that we have to do because it is a cost. We’ve got to pass it through, and ultimately the consumer is going to pay for it at some point,” he said.