Investor Fact Book — Fiscal Year 2017 Our Purpose Raising the World’S Expectations for How Much Good Food Can Do

Investor Fact Book — Fiscal Year 2017 Our Purpose Raising the world’s expectations for how much good food can do

Team Behaviors Core Values

We are a caring team that puts We strive to be honorable the customer first. and operate with integrity. We listen, assume positive intent, We strive to be then speak with candor. faith-friendly and inclusive. We embrace creativity to We strive to serve as stewards get better every day. of the resources entrusted to us. We are inclusive, and through We strive to provide a safe intentional collaboration, we win. work environment. We make a commitment daily, to deliver results the right way.

Our Strategy Sustainably feed the world with the fastest growing protein brands.

How We Will Achieve Our Strategy Grow. Deliver. Sustain. Our businesses through Ongoing financial fitness through Our company and our world differentiated capabilities. continuous improvement. for future generations.

Our Customer Promise We partner with Every day we take As consumers We will remain We are optimistic customers to the opportunity demand our externally and solutions delight consumers to strengthen products, we focused, agile driven, turning in the constant our customer promise to be and constantly challenges into pursuit of growth. relationships by indispensable to educated in opportunities working together our customers as consumer insights. and finding ways as a team. our customers are to keep growing indispensable to us. together. About Tyson Foods Contents Tyson Foods, Inc. (NYSE: TSN) is one 2 Who We Are of the world’s largest food companies and a recognized leader in protein. 3 The Core 9 Founded in 1935 by John W. Tyson and 4 Leading U.S. Protein Producers grown under three generations of family leadership, the company has a broad 4 Portfolio Roles and Business Models portfolio of products and brands like 5 Fiscal 2017 International Sales Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, Aidell’s®, ibp® and 6 U.S. Operations State Fair®. Tyson Foods innovates 9 Beef continually to make protein more sustainable, tailor food for everywhere 14 Pork it’s available and raise the world’s 17 Chicken expectations for how much good food can do. Headquartered in Springdale, Arkansas, the company had 122,000 team members at September 30, 2017. Through its Core Values, Tyson Foods strives to operate with integrity, create value for its shareholders, customers, communities and team members and serve as a steward of the animals, land and environment entrusted to it.

Investor Inquiries Trademarks and Registered Trademarks [email protected] Tyson®, Jimmy Dean®, Hillshire Farm®, 479-290-2604 Ball Park®, Wright®, Aidells®, ibp®, State Fair®, Sara Lee™ and Van’s® Media Inquiries [email protected] The terms “Tyson,” “Tyson Foods,” “the 479-290-6397 Company,” “our,” “we” and “us” refer to Tyson Foods, Inc., to one or more of its Tyson Foods Websites consolidated subsidiaries or to all of them as a Corporate www.tysonfoods.com whole. These terms are used for convenience Investor Relations ir.tyson.com only and are not intended as a precise Brands www.tysonfoods.com/our-brands description of any of the separate companies, each of which manages its own affairs. Who We Are — Tyson Foods is a modern, multi-national, protein-focused food company producing 20% of the beef, pork and chicken in the United States in addition to a portfolio of foods under the Tyson®, Jimmy Dean®, Hillshire Farm®, BallPark®, Wright®, Aidell’s® and State Fair® brands.

SALES BY SEGMENT

Fiscal 2017 38% 11% 30% 20%

Sales: BEEF PORK PREPARED FOODS $38.3 Billion CHICKEN 1% OTHER SALES BY DISTRIBUTION CHANNEL

51% 33% 12%

CONSUMER PRODUCTS FOODSERVICE INTERNATIONAL 4% OTHER

Fiscal 2017

BEEF PORK CHICKEN PREPARED FOODS 130,000 424,000 35,000,000 75,000,000 APPROX. AVG. HEAD PER WEEK APPROX. AVG. HEAD PER WEEK APPROX. AVG. BIRDS PER WEEK APPROX. AVG. POUNDS PER WEEK 12* 9* 48 42 FACILITIES FACILITIES FACILITIES FACILITIES

122,000 14 4 2 1** 1 TEAM MEMBERS DISTRIBUTION INTERNATIONAL RESEARCH & TURKEY PET TREAT CENTERS FACILITIES DEVELOPMENT FACILITY FACILITY CENTERS

*Includes three case-ready beef and pork plants. **Included in Prepared Foods’ 42 facilities.

2 Tyson Foods Fiscal 2017 Fact Book The Core 9

Our “Core 9” comprises products that are the #1 or #2 brands in their categories.

Frozen Branded # Prepared # Hot Dogs # Stacked 1 Chicken 1 1 Bacon

Frozen # Protein # Breakfast # Smoked 1 Breakfast 1 Sausage 1 Sausage

Super Branded Corn Premium # Lunchmeat # Dogs # Smoked 2 1 1 Sausage

Source: IRI, Total Multi-Outlet, data through 8/6/17.

Tyson Foods Fiscal 2017 Fact Book 3 Leading U.S. Protein Producers

FED BEEF PORK CHICKEN

% % 17 % 27% 23 20 33% 49% 9% 25% 16% 23% 6% 18% 19% 8% 7%

23% TYSON FOODS 17% TYSON FOODS 20% TYSON FOODS 23% JBS 25% SMITHFIELD 16% PILGRIM’S PRIDE 18% CARGILL 19% JBS 8% SANDERSON FARMS 9% LEUCADIA 6% HORMEL 7% PERDUE FARMS 27% OTHER 33% OTHER 49% OTHER

Source: Cattle Buyers Weekly, 2017. Source: EMI Analytics, July 2017 Source: Watt Poultry USA, March Based on maximum U.S. capacity as reported in National Pork Board 2018. Based on ready-to-cook (head per day). Quick Facts. Based on estimated pounds produced. daily U.S. capacity (head per day).

Portfolio Roles and Business Models

Branded and Value Added Commodity

Grow above Grow above Leverage industry by industry and throughput and investing in expand margins efficiency to brand building, through generate cash. innovation customer and customer partnership, RETAIL development. differentiation and competitive FOODSERVICE costs. CHANNELS ALL

4 Tyson Foods Fiscal 2017 Fact Book Fiscal 2017 International Sales

CHINA OTHER & HONG KONG Total Company 31% 21% International Sales: * JAPAN ~$4.5 Billion 17%

TAIWAN % 4 SOUTH KOREA MEXICO CANADA % % 4% 9 14

BEEF EXPORT SALES: PORK EXPORT SALES: ~$2.2 BILLION $971 MILLION

OTHER OTHER % CHINA SOUTH % 18 & HONG KONG KOREA 15 % % ITALY 23 4 JAPAN 5% 35% CANADA TAIWAN 10% 7% JAPAN % MEXICO 20 CHINA % & HONG KONG 12 % SOUTH 15 MEXICO KOREA % 15% 21

CHICKEN INTERNATIONAL SALES: PREPARED FOODS EXPORT SALES: ~$1.25 BILLION* $91 MILLION

CHINA & HONG KONG MEXICO 25% 25% OTHER % OTHER 38 48% MEXICO 10% CANADA % BRAZIL 23 % SOUTH 6 KOREA % JAPAN 10 INDIA % PUERTO % 4 RICO CANADA 5 3% 3%

* Includes exports and in-country production Tyson Foods Fiscal 2017 Fact Book 5 U.S. Operations at Fiscal 2017 Year End

ALABAMA GEORGIA MAINE 1,800 Team Members 4,100 Team Members 300 Team Members Albertville (Chicken, Animal Nutrition) Cumming (Chicken) Portland (Chicken) Blountsville (Chicken) Dawson (Chicken) Macon (Distribution Center) ARIZONA MICHIGAN Rome (Prepared Foods) 60 Team Members 1,700 Team Members Vienna (Chicken) Tolleson (Distribution Center) Warren (Prepared Foods) Traverse City (Prepared Foods) ARKANSAS ILLINOIS 4,600 Team Members Zeeland (Prepared Foods) 24,200 Team Members Caseyville (Prepared Foods) Berryville (Chicken and Animal Nutrition) Chicago (Corporate Office, MISSISSIPPI Beef Further Processing) Clarksville (Chicken, Animal Nutrition) 3,700 Team Members Discovery Center, Downers Grove Carthage (Chicken, Animal Nutrition Dardanelle (Chicken, Animal Nutrition) Joslin (Beef) Forest (Chicken, Animal Nutrition) Fayetteville (Prepared Foods) Ottawa (Distribution Center) Vicksburg (Chicken) Fort Smith (Chicken) Rochelle (Distribution Center) Grannis (Chicken) MISSOURI INDIANA 5,800 Team Members Green Forest (Chicken, Animal Nutrition) 3,200 Team Members Concordia (Prepared Foods) Hope (Chicken, Animal Nutrition) Corydon (Chicken) Dexter (Chicken, Animal Nutrition) Logansport (Pork) Nashville (Chicken) Monett (Chicken, Animal Nutrition) Portland (Prepared Foods) North Little Rock (Chicken) Noel (Chicken) Pine Bluff (Chicken, Animal Nutrition) IOWA Sedalia (Chicken, Animal Nutrition) Rogers (Chicken, Distribution Center) 11,000 Team Members St. Joseph (Prepared Foods) Council Bluffs (Case-Ready Beef and Pork, Russellville (Chicken, Distribution Center) Prepared Foods) NEBRASKA Scranton (Animal Nutrition) Independence (Animal Nutrition) 9,600 Team Members Siloam Springs Louisa County (Pork) Dakota City (Beef) (Cobb Vantress Headquarters) Perry (Pork) Lexington (Beef) Springdale Storm Lake (Pork, Prepared Foods - Turkey) Madison (Pork, Prepared Foods) World Headquarters Waterloo (Pork, Prepared Foods) Omaha (Prepared Foods) Discovery Center, Springdale KANSAS Chicken, Animal Nutrition NEW JERSEY 5,700 Team Members 200 Team Members Texarkana (Animal Nutrition) Emporia (Beef Further Processing) Vineland (Prepared Foods) Van Buren (Chicken) Finney County (Beef) Waldron (Chicken) Hutchinson (Prepared Foods) NORTH CAROLINA Kansas City (Prepared Foods) 7,500 Team Members CALIFORNIA Olathe (Distribution Center) 1,100 Team Members Claremont (Prepared Foods) South Hutchinson (Prepared Foods) Rancho Cucamonga (Prepared Foods) Harmony (Animal Nutrition) San Diego (Prepared Foods) KENTUCKY Monroe (Chicken) San Lorenzo (Prepared Foods) 2,500 Team Members Sanford (Prepared Foods) Claryville (Prepared Foods) Tarboro (Prepared Foods) FLORIDA Robards (Chicken, Animal Nutrition) 150 Team Members Wilkesboro (Chicken) Jacksonville (Beef Further Processing)

6 Tyson Foods Fiscal 2017 Fact Book U.S. Operations U.S. Operations

Headquarters Prepared Foods Headquarters Prepared Foods

Turkey Turkey

Chicken ChickenCase-Ready BeefCase-Rea & Porkdy Beef & Pork

Beef Beef Animal NutritionAnimal Nutrition Pork Distribution Center Pork Distribution Center

VIRGINIA OHIO SOUTH DAKOTA 1,500 Team Members 2,100 Team Members 500 Team Members Glen Allen (Chicken, Animal Nutrition) Amherst (Prepared Foods) Dakota Dunes (Tyson Fresh Meats Headquarters) Temperanceville (Chicken, Animal Nutrition) Blue Ash (Tyson Cincinnati Corp. Offices) Mason (Distribution Center) TENNESSEE WASHINGTON West Chester (Prepared Foods) 5,300 Team Members 1,400 Team Members Goodlettsville (Case-Ready Beef and Pork) Pasco (Beef) OKLAHOMA Newbern (Prepared Foods) WISCONSIN 3,600 Team Members Union City (Chicken) 1,300 Team Members Broken Bow (Chicken, Animal Nutrition) Shelbyville (Chicken, Animal Nutrition) Green Bay (Prepared Foods) Enid (Prepared Foods, Chicken, New London (Prepared Foods) Distribution Center) TEXAS Holdenville (Swine Farrowing) 12,200 Team Members Amarillo (Beef) PENNSYLVANIA Carthage (Chicken) 1,100 Team Members Center (Chicken) New Holland (Chicken, Animal Nutrition) Dallas (Prepared Foods) Pottsville (Distribution Center) Fort Worth (Prepared Foods)* SOUTH CAROLINA Haltom City (Prepared Foods) 400 Team Members Houston (Prepared Foods) Columbia (Prepared Foods) North Richland Hills (Prepared Foods) Easley (Prepared Foods) Seguin (Chicken, Animal Nutrition) Sherman (Case-Ready Beef & Pork) Vernon (Prepared Foods)

*Sold in December 2017.

Tyson Foods Fiscal 2017 Fact Book 7 The Basics — How beef, pork and chicken get to your table. BEEF There are four primary stages in may add additional value by producing case- cattle and beef production: ready beef or branded fully cooked beef items. • Cow/calf operation The U.S. beef cattle industry is not vertically • Stocker operation integrated. It comprises more than 700,000 • Feedlot operation individual farms or ranches. Marketing Packer/processor approximately 30.5 million head of cattle annually, Cow/calf operators are traditional ranchers and feedlots with less than 1,000 head capacity farmers in the business of breeding cows and represent more than 90 percent of U.S. feedlots but producing calves. A cow’s gestation period is market a relatively small share of fed cattle. Lots approximately 283 days. The calves are weaned with 1,000 head or more comprise less than 7% of at six to 10 months. After reaching a weight of total feedlots and market more about 80 percent 300 to 600 pounds, calves are sold to stocker of fed cattle. Feed is the major production input operators or direct to the feedlot operator. of the beef production process, accounting for more than 80% of the cost of finishing fed beef. Stocker operators put additional weight on the calves to bring them to 600 to 800 pounds before The standards for grading livestock and meat they go into feedlots at an age of eight to 14 months. have evolved in response to changing consumer The cattle, at this point called feeder cattle, preferences. To create a uniform class and naming are purchased by feedlot operators and raised system to be used for market reporting, the U.S. to a harvest weight of 900 to 1,400 pounds. Department of Agriculture (USDA) began to develop grading standards for livestock in 1916. These When the cattle reach harvesting weight at 12 to initial standards were improved and modified 22 months, they are sold as fed cattle to packers/ periodically for years. In 1946, Congress passed processors for harvesting. The processed carcasses the Agricultural Marketing Act that authorized are sold as boxed beef to purveyors who fabricate federal grading of agricultural products. USDA the boxed beef into cuts that are sold to consumers currently grades more than 92% of beef produced at retail and in foodservice operations. Processors from fed cattle and more than 80% of all beef

Beef Supply Chain

Cow/calf Stocker Feedlot Packers and Wholesale/Retail/ Operations Operation Operation Processors Foodservice Cow/calf Stocker operators Feedlots buy Live cattle are Wholesale cuts operators buy weaned feeder cattle sold to packers/ are sold as boxed breed cows and calves and graze and ﬁnish them processors who beef to further produce calves. them for two to to harvest harvest the processors, Gestation period four months weight of 900 animals and retailers or is 283 days. until they reach to 1,400 pounds process the foodservice Calves are feeder weight over three to carcasses into operators who weaned at six of 600 to six months. wholesale cuts. further process to 10 months and 800 pounds. Finished cattle the meat into between 300 are commonly retail cuts or and 600 pounds. called live cattle. value-added products, which are sold to consumers.

Tyson Foods Fiscal 2017 Fact Book 9 BEEF

Cattle (39 Months)

Heifer to Cow Gestation Wean Stocker Feedlot 13 Months 10 Months 8 Months 3 Months 4.5 Mos.

Cattle producers need about 39 months to alter supply once a decision has been made to increase or decrease production. At more than three years, cattle production has the slowest response time of the three major proteins.

produced in the United States. (Beef from mature BEEF INDUSTRY TERMINOLOGY beef cows, dairy cows and bulls is sold on a percent Beef Forequarter – the front half or section lean basis and is not normally graded by USDA.) of a side of beef; includes ribs 1-12, chuck or Meat grading and meat inspection are two different shoulder section, brisket, shank and plate processes. Meat inspection is a mandatory program Beef Hindquarter – the back half or section of a side paid for by taxpayers and conducted by the Food of beef; includes the round, loin, flank and kidney Safety Inspection Service (FSIS) of USDA. FSIS inspects cattle, ensuring production of safe and Bovine – of or related to cattle wholesome meat products for consumers. Meat Bovine Spongiform Encephalopathy (BSE) – grading is a voluntary service paid for by meat frequently called “mad cow disease,” BSE is a processors and performed by the Agricultural degenerative neurological disease affecting the Marketing Service (AMS) of USDA. AMS central nervous system in cattle. BSE affects older groups carcasses into homogenous groups based cattle, typically more than 30 months of age. The on expected taste, appeal of cooked meat and vast majority of the cattle going to market in the the quantity of the meat from the carcass. United States are younger than 24 months There are eight grades of beef: Prime, Choice, Select, Boxed Beef – cuts of beef put in boxes for shipping Standard, Commercial, Utility, Cutter and Canner. from packing plants to retailers. These primal Only three are used for marketing: Prime, Choice (round, loins, ribs and chuck) and subprimal cuts are and Select. Quality grades are assigned to beef intermediate cuts between the carcass and retail cuts carcasses by AMS officials based on relationships between marbling and the age of an animal. Bull – an adult uncastrated male Marbling is the fat dispersed within the muscle. Bullock – a young bull, typically Prime meat comes from young animals with at less than 20 months of age least slightly abundant marbling. Choice meat By-product – also referred to as “the drop” or comes from young animals with moderate, “the drop credit,” by-products comprise non-meat modest or small marbling. Select comes from items derived from harvest including the hide, young animals with slight marbling. cheek meat, liver and tripe, among others Sources: National Cattlemen’s Beef Calf – an animal that has not yet reached sexual Association, CommoditySeasonals.com, maturity, usually under one year of age Informa Economics, USDA Economic Research Service and Tyson Foods, Inc. Canner – lowest USDA grade designation for beef, not sold at retail; used primarily in canned meats, sausage and ground meat

10 Tyson Foods Fiscal 2017 Fact Book BEEF

Cut-Out – quantity of saleable meat Frame Score – a score based on obtained from a wholesale cut subjective evaluation or actual Feed Conversion hip height measurement; relates Cutter – second lowest USDA to harvest weights at which cattle grade designation for beef; used It takes approximately 11 should grade Choice or at which in canned meat, sausage and bushels of corn to produce different groups of cattle should ground meat; below utility grade 100 pounds of boneless, have comparable amounts of fat skinless beef Dressing Percentage – percentage Futures Market – electronic Of the three major protein of the live animal weight that market through which buyers species, cattle are the becomes the carcass weight and sellers trade contracts on least efficient in converting at harvest. It is determined by commodities or raw materials; grain to meat. dividing the carcass weight by used as a risk management tool the live weight then multiplying or as a speculative venture by 100 (also referred to as yield) Carcass – the two sides of the same Grades – designation for cattle and harvested animal with or without Fat Thickness – depth of fat carcasses to indicate value and the kidneys and after other viscera, in tenths of inches over the rib palatability; determined primarily hide, head, feet and tail are removed eye muscle at the 12th rib by marbling and age of an animal Carcass Merit – desirability of Federally Inspected Slaughter Harvest – to slaughter an animal a carcass relative to quantity – required and provided at of components (muscle, fat government expense for all Hedge – risk management strategy and bone), USDA quality grade packing plants from which meat or to lock in a price for a given and potential eating quality meat products move in interstate commodity at a specified time trade. Federal inspectors examine Carcass Quality Grade – an Heifer – a young female animals before harvest, supervise estimate of palatability based that has not had a calf sanitation during harvesting and primarily on marbling and maturity processing, inspect carcasses Hot Weight – weight of a and, to a lesser extent, on color, and internal organs for disease carcass before it is chilled texture and firmness of lean and certify carcasses and Intramuscular Fat – fat within Case-ready – pre-cut, pre-packaged products as to wholesomeness the muscle or marbling meats received by the retailer that Feed Efficiency (Feed do not require further processing. Live Cattle – finished cattle Conversion Ratio) – the Case-ready products can go directly of harvest weight amount of feed consumed to to the retail meat case for selling produce a pound of meat Loin – cuts from the animal’s Choice – USDA grade designation back between the ribs and hip Feeder Cattle – calves that have immediately below Prime for beef, reached 600 to 800 pounds Marbling – specks of fat veal and lamb and are sold to feed lots (intramuscular fat) distributed in Commercial – one of the lower muscular tissue; evaluated in the rib Feeder Cattle Grading – grades USDA grade designations for beef; eye between the 12th and 13th rib; introduced in 1979 based on frame usually sold as ground meat a major factor in assigning USDA size and thickness; relates to the end quality grade of a beef carcass Commercial Producers – weight normally required before an producers whose primary goal animal can be expected to grade Middle Meats – rib and loin of a beef is to produce animals for herd Choice; thickness is related to yield carcass; these primal cuts generally replacement, feeding and harvest size and muscle-to-bone ratio yield the highest-priced beef cuts rather than for breeding stock Finished Cattle – fed cattle Palatability – characteristics Cow – a mature female whose time in the feedlot is of the lean; “eatability” completed and are ready for Primal Cuts – chuck, harvest; also known as live cattle rib, loin or round

Tyson Foods Fiscal 2017 Fact Book 11 BEEF

Prime – highest USDA grade designation for beef, veal Cuts of Beef and lamb; the best grade for special aging and most often served in finer restaurants

SIRLOIN Quarter – each of two portions that CHUCK RIB SHORT result from ribbing (cutting) a side LOIN ROUND between the 12th and 13th ribs SHORT- BRISKET PLATE FLANK Retail Cuts – cuts of beef in sizes that are purchased by the consumer SHANK Ribs – cuts from the rib area along the back of the animal, usually includes portions of the backbone and rib bone

Round – cuts from the back leg With a market weight of 1,250 pounds and a yield of 62.2%, the typical steer will produce approximately of the animal, slightly less than 777 pounds of beef. one-fourth of the total beef carcass located in back of the loin Chuck Chuck 7 Bone Pot Roast, Chuck Pot – USDA grade designation 228 pounds Roast, Chuck Steak, Chuck Eye Steak, Select 29% of carcass Shoulder Top Blade Steak, Flat Iron below Choice for beef, veal and lamb Steak, Shoulder Pot Roast, Shoulder Side – each of the two parts Steak, Ranch Steak, Petite Tender, resulting from splitting a Petite Tender Medallions, Boneless carcass lengthwise through its Short Ribs approximate median plane Rib 72 pounds Rib Roast, Rib Steak, Ribeye Roast, 9% of carcass Ribeye Steak, Back Ribs Stag – a male castrated after Short Loin Short Loin – Porterhouse Steak, reaching sexual maturity and Sirloin T-Bone Steak, Top Loin Steak, Standard – USDA grade designation 126 pounds Tenderloin Roast, Tenderloin Steak below Select for beef and veal 16% of carcass Sirloin – Tri-Tip Roast, Tri-Tip Steak, Top Sirloin Steak Steer – a castrated male (within the Round Top Round Steak, Bottom Round first six months after birth); may be a 169 pounds Roast, Bottom Round Steak (Western steer calf or a feeder steer ranging in 22% of carcass Griller), Eye Round Roast, Eye Round age from three months to two years Steak, Round Tip Roast, Round Tip Steak, Sirloin Tip Center Roast, Sirloin Sweetbreads – thymus gland Tip Center Steak, Sirloin Tip Side Steak located in the neck; popular in Europe and Argentina Thin Cuts: Brisket, Brisket Flat Cut, Skirt Steak, Flank Shortplate, Flank, Steak, Shank Cross Cut Thin Cuts – fore shank, Shank 146 pounds brisket, short plate or flank 19% of carcass Tripe – rubbery lining of the stomach Other 36 pounds Ground Beef, Cubed Steak, Stew Meat, 5% of carcass Beef for Kabobs, Beef for Stir Fry Utility – one of the lowest Source: National Cattlemen’s Beef Association and Tyson Foods, Inc. USDA designations for meat; below commercial grade

7-9:1 Feed Conversion 11 Bushels of Corn to Produce 100 Pounds of Boneless, Skinless Meat

12 TysonOf theFoods three Fiscal major 2017 protein Fact species, Book cattle are the vleast e cient in converting grain to meat. BEEF

Variety Meats – liver, heart, tongue, tripe, sweetbreads and brains

Veal – meat from very young calves (under 3 months of age); typically comes from dairy bull calves

Wholesale Cut – cuts sold to a supermarket where a butcher breaks them down to meat counter cuts

Yield Grade or Cutability – indicates the proportionate amount of saleable retail cuts that have been obtained from a carcass Sources: National Cattlemen’s Beef Association and Tyson Foods, Inc.

Tyson Foods Fiscal 2017 Fact Book 13 PORK There are four primary stages in may add additional value by producing branded, hog and pork production: case-ready pork as well as fully cooked pork items. • Sow/farrowing barns Feed is the major production input to the pork • Nurseries production process, accounting for about two- • Finishing farms thirds of production costs. The average whole- • Packer/processor herd feed conversion ratio (pounds of feed The gestation period for hogs is approximately required per pound of live weight produced) for 114 days. Farrowings range from six to 13 pigs the U.S. pork industry is approximately 3.5. per litter, with the average being about 10. The Pork producers use purebred seed stock of nine number of pigs weaned averages nine pigs per major swine breeds (Yorkshire, Duroc, Hampshire, litter. Pigs are generally weaned at three to four Landrace, Berkshire, Spotted, Chester White, weeks when they weigh 10 to 15 pounds. At this Poland China and Pietrain) or synthetic lines time, they are moved to either a nursery, a grower derived from these breeds by breeding companies. or directly to a finishing building modified to meet the needs of young pigs. Most housing for Pig prices vary cyclically and seasonally. Cyclical newly weaned pigs has slotted floors that allow variation is caused by the time lags inherent to the pigs’ waste to fall through into a holding pit or biological production. When prices are high, gutter. This keeps the floors drier and cleaner and more sows are bred and more pigs are produced; makes it easier to provide the correct environment however, these pigs will not reach the market to keep pigs comfortable and productive. for about a year after they are conceived. When they do, supplies increase and prices fall, thus When pigs reach approximately 270 pounds, causing a price cycle. Seasonal variation is producers sell them on either a live-weight or caused by changes in production efficiency carcass-weight basis to livestock exchanges, due to weather and by consumer demand. producer-owned marketing networks or directly to packers. Once the hogs are harvested, the processed Processors may acquire hogs through direct carcasses are sold as boxed pork to purveyors who negotiated purchases with producers using a fabricate the boxed pork into cuts sold to consumers variety of methods, primarily a formula (a reported at retail and in foodservice operations. Processors price plus some amount), the spot market, a fixed

Pork Supply Chain

Gestation Weaning Nursery Finishing Processing Wholesale Gestation Sows are bred Weaned pigs After eight Processors Wholesale cuts period is 114 and farrowed, are sent to weeks in the harvest the are sold as boxed days. and piglets are nurseries and nursery, feeder hogs and pork to further nursed in sow raised to pigs are sent to divide them processors, barns. Piglets growing ﬁnishing farms into wholesale retailers or are weaned weight of 40 for about 18 cuts. foodservice after three to 60 pounds. weeks where operators who weeks. they reach further process market weight the meat into of 270 pounds. retail cuts or value-added products, Breeding A new female to the sow herd can be bred which are sold Sows at six months. A sow can be bred again three days to consumers. after the pigs are weaned. Sows are culled after several years or when supplies should be limited.

14 Tyson Foods Fiscal 2017 Fact Book Tyson Foods Fiscal 2017 Fact Book 14 PORK

Hogs (20 Months)

Gilt to Sow Gestation Wean Nursery Finish 8 Months 4 Months 1 Month 2 Mos. 4.5 Months

Hog producers need about 20 months to alter supply once a decision has been made to increase or decrease production. price tied to feed or a fixed price Boston Butt – upper part tied to a futures market. Hogs of a pork shoulder are purchased on a daily basis, Boxed Pork – cuts of pork put in Feed Conversion generally a few days before boxes for shipping from packing It takes approximately 8 the animals are required for plants to retailers. These cuts bushels of corn to produce processing. Payment for the hogs are intermediate cuts between 100 pounds of boneless, may be made on a live-weight the carcass and retail cuts skinless pork basis or on a grade and yield Of the three major protein – the two sides of the same basis. Grade and yield payments Carcass species, hogs are in the are paid on carcass weights harvested animal with or without middle of the pack in their generally paying a premium for the kidneys and after other viscera, efficiency of converting preferred carcass grades and skin, head, feet and tail are removed grain to meat is the discounting undesirable grades. most efficient converter Case-ready – pre-cut, pre-packaged Grade premiums or discounts are of grain to meat. meats received by the retailer that applied using a predetermined do not require further processing. formula grid method. Case-ready products can go directly Source: www.pork.org, Informa to the retail meat case for selling Feed Efficiency (Feed Economics and Tyson Foods, Inc. Conversion Ratio) – the – quantity of saleable meat Cut-Out amount of feed consumed to obtained from a wholesale cut PORK INDUSTRY produce a pound of meat Farrow – to give birth to piglets TERMINOLOGY Feeder Pig – a pig weighing Federally Inspected Slaughter between 30 and 90 pounds – required and provided at Back Fat – amount of fat over Finish – to feed a pig until it reaches government expense for all a pig’s back; an indicator of the a market weight, 250-270 pounds overall fat content of the animal; packing plants from which meat or used in selection of breeding meat products move in interstate Gilt – a young female that has stock and in carcass grading trade. Federal inspectors examine not farrowed her first litter animals before harvest, supervise Barrow – a male castrated before Ham – cured and smoked sanitation during harvesting and it reaches sexual maturity meat from the hind leg of processing, inspect carcasses pork, excluding the shank Boar – a male used for and internal organs for disease breeding purposes and certify carcasses and Hog – generic term, usually products as to wholesomeness applied to growing swine

The Pork Group, Inc., a wholly owned subsidiary of Tyson Foods, Inc., produces finished hogs, feeder pigs and weaned pigs for sale to pork processors and finishers throughout the country. Tyson Foods’ equity ownership of live hog operations represents less than 10% of the Company’s total pork production.

Tyson Foods Fiscal 2017 Fact Book 15 PORK

Hot Weight – weight of a carcass before it is chilled Cuts of Pork Nursery Pig – any pig not yet weaned LOIN Palatability – characteristics BOSTON of the lean; “eatability” BUTT SPARERIBS BACON HAM Picnic Shoulder – lower or shank part of a pork shoulder JOWL PICNIC

Pig – term usually applied to a young, immature swine HIND FEET Piglet – newborn pig (PIG’S FEET) Porcine – of or related to swine With a market weight of 265 pounds and a yield of 75.5%, Pork Belly – lower side of a hog the typical hog will produce a 200-pound carcass. The remaining after the loin and carcass will yield about 151 pounds of pork and 49 pounds spareribs have been removed; of other products. the raw material for bacon Leg Bone-in Fresh Ham, Smoked Ham, Quarter – each of two portions that 51 pounds Leg Cutlets, Fresh Boneless Ham result from ribbing (cutting) a side 25% of carcass between the 12th and 13th ribs Side (Belly) Spareribs, Slab Bacon, Sliced Bacon Ribs – cuts from the rib area 28 pounds 14% of carcass along the back of the animal, usually includes portions of Loin Sirloin Chop, Rib Chop, Loin Chop, the backbone and rib bone 46 pounds Boneless Rib End Chop, Boneless 23% of carcass Center Loin Chop, Butterﬂy Chop, Shoat – a growing pig (term Center Rib Roast (Rack of Pork), largely replaced by nursery Bone-in Sirloin Roast, Boneless Center pig or grow-finish pig) Loin Roast, Boneless Rib End Roast, Boneless Sirloin Roast, Tenderloin, Side – each of the two parts Canadian-style Bacon, Country-style resulting from splitting a Ribs, Back Ribs carcass lengthwise through its Picnic Shoulder Smoked Picnic, Arm Picnic Roast, approximate median plane 22 pounds Smoked Hocks Sow – an adult female that has 11% of carcass farrowed at least one litter Boston Bone-in Blade Roast, Boneless Blade (Shoulder) Butt Roast, Blade Steak, Ground Pork, Wean – to separate 21 pounds Sausage pigs from the sow 11% of carcass Wholesale Cut – cuts sold to a Other Jowls, Feet, Pork Rinds (Skin), etc. supermarket where a butcher breaks 32 pounds, them down to meat counter cuts 16% of carcass Source: National Pork Board and Tyson Foods, Inc. Yield Grade or Cutability – indicates the proportionate amount of saleable retail cuts that have Source:3.5:1 National Feed Pork Conversion Board been obtained from a carcass; 1 is 8 Bushels of Corn to Produce 100 Pounds the leanest and 5 is the fattest of Boneless, Skinless Meat

Of the three major protein species, hogs are in the middle of the pack in their e ciency of converting grain to meat. 16 Tyson Foods Fiscal 2017 Fact Book Tyson Foods Fiscal 2017 Fact Book 16 CHICKEN There are seven stages in producing Even before a chick is hatched, it has a healthier chicken for consumer: start on life today than a chicken 30 years ago, being • Breeder flock raised healthier and growing larger through: • Pullet farm • Improved, modern breeding with a • Breeder house focus on overall bird health • Hatchery • Better living conditions through climate • Broiler farm controlled barns, and protection from • Processing/further-processing predators and extreme temperatures • Distribution • Up-to-date biosecurity practices Each of these stages was once a separate to keep diseases out enterprise, but today, most of the chicken • Healthier nutrition plans with feed industry is vertically integrated, resulting in tailored to each stage of a chicken’s life greater efficiencies and higher product quality. • Daily care by dedicated farmers • Regular veterinarian oversight and the Vertically integrated poultry companies operate use of vaccines to prevent disease feed mills to produce scientifically formulated It’s also important to note what feeds. Corn, soybean meal and other feed isn’t making chickens bigger: ingredients are major production costs in the poultry industry, representing roughly 55% of • Added hormones or steroids. No chicken sold the cost of growing a chicken. As a general rule, in the United States contains added hormones a $0.10 change in the price of corn per bushel or or steroids, regardless of whether it’s noted on a $10 change in the price of soybean meal per the label. In fact, the use of hormones has been ton will typically result in a $0.0025 change expressly forbidden by law since the late 1950s. in cost per live-weight pound of chicken. • Genetic engineering. No commercially available chickens are genetically modified for any purpose. Chicken is the most efficient of the farm animals raised for food in converting feed to meat, and PRODUCT MARKETING through the years the poultry industry has There are essentially three ways chicken products improved feed conversion efficiency to produce are marketed, ranging from bulk raw commodity at more meat with less grain for a growing world the lowest end to fully-cooked, value-added products population. There has been continued progress on the high end. Of the three major proteins, chicken to improve the health and welfare of chickens. has provided the most opportunities for adding value.

Chicken Supply Chain

Grandparent Pullet Breeder Hatchery Broiler Processing Distribution and Parent Farm Farm Farm and Further Stock 20 Weeks 26 Weeks+ 21 Days About 46 Days Processing

Feed Scientiﬁcally formulated feed is Mill produced for pullets and broilers.

Tyson Foods Fiscal 2017 Fact Book 17 CHICKEN

Broilers (9 Months)

Pullet to Hen Lay Hatch House 5 Months 1.5 Months ¾ Mo. 2 Months

Although the response time for chicken is the fastest of the major proteins, it still takes nine months to alter supply once a decision has been made to increase or decrease production.

PRIMARY PROCESSING • Organic 3s and Up – 3 to 4.75 pounds, (COMMODITY, • Kosher usually with neck and giblets for NON-VALUE ADDED) • Halal Certified retail grocery; whole or cut-up parts; 40 to 45 days old; typical retail size Distributed for further Source: National Chicken Council; processing by volume users. All-Vegetable Diet – Poultry feed Fresh Ice Pack Bulk or Bulk Frozen. More information is made primarily from corn and • Whole birds about how chickens soybean meal and may include • Quarters are bred is available at www. some processed protein, fats and • Individual parts ChickenCheck.In. oils from animal by-products. If these ingredients are not used, CASE-READY TRAY PACK the feed could be described as “all vegetable.” The chickens Distributed primarily for direct Feed Conversion consumer consumption and that consume this type of feed sold through retail markets. It takes approximately 3.7 are referred to as “veg fed” Fresh (refrigerated). Bushels of Corn to Produce 100 Pounds of Boneless, Broiler – chicken raised • Deboned parts Skinless Meat for meat products • Bone-in parts • Whole birds Of the three major protein Broiler for Deboning – 5 to 6 pound • Marinated specialty products species, chicken is the males, usually 47 to 56 days old; most efficient converter deboned for nuggets, patties, strips of grain to meat. FURTHER VALUE-ADDED and similar boneless products; most often sold without neck and giblets Distributed for both in-home and foodservice Broiler-Roaster – 5 to 6 pound applications in both bulk and hens, usually 55 days old convenient consumer packaging. CHICKEN INDUSTRY surgically de-sexed Fresh (refrigerated) or Frozen. TERMINOLOGY Capon – male broiler weighing 7 to 9 Chickens are classified primarily • Deboned and trimmed pounds and 14 to 15 weeks old • Portioned and sized by the size, weight and age of the • Marinated, seasoned birds when processed. Chickens Cornish Hen – less than 30 days and flavored are produced to meet specific old and about 2 pounds live weight • Par-cooked requirements of the customer, Enhanced – some raw chicken which could be a retail outlet, • Fully-cooked products are enhanced with fast food chain or institutional • Battered and breaded chicken broth or a similar solution. buyer, among others. • Custom packaging The presence and percentage of • No antibiotics ever the broth or other solution must and/or vegetarian fed be stated clearly and the actual

18 Tyson Foods Fiscal 2017 Fact Book CHICKEN ingredients listed on the label. Both enhanced and non-enhanced products are currently available in Cuts of Chicken the marketplace. Sodium is used in the broth or solution of some enhanced products, usually at very Cut-up Chicken Whole chicken cut into two breast halves, (8 pcs.) two thighs, two drumsticks, two wings low levels. The presence of salt or sodium is noted on the label Halves or Whole chicken cut lengthwise into two Splits pieces of approximately equal weight chickens are Farm-Raised – Breast Quarter Breast, wing, back portion raised on farms; therefore, Drumstick and thigh virtually any chicken could Leg Quarter be labeled “farm-raised” Breast Halves Chicken breasts cut in half along the or Splits breast bone Fast Food Size Broiler – 2.25 to 3 Drumstick Portion of the leg below the knee joint pounds, usually cut up, without neck and giblets; may have tail and leaf Thigh Portion of the leg above the knee joint fat removed; less than 42 days old Wing Whole wing with all three sections – drummette, flat section USDA generally Free Range – and wing tip – intact permits the term to be used if chickens have access to the Drummette Wing portion consisting of only the meatier first section; looks like a tiny outdoors for at least some part of drumstick the day. Chicken labeled “organic” must also be free-range, but not all Mid-joint Wing Wing portion consisting of only the flat, middle section free-range chicken is also organic. Tenders Strips of boneless, skinless breast meat Heavy Hens – spent breeder hens that are no longer commercially Source: Tyson Foods, Inc. productive for laying hatching eggs, usually 5 to 5.5 pounds, the production of any poultry in Poultry – domesticated fowl about 15 months old; used for the United1.96:1 States. Feed Regulations Conversion of Rate raised for meat and/or eggs cooked, diced or pulled meat the Food3.7 & BushelsDrug Administration of Corn to Produce 100 Pounds Poussin – less than 24 days old prohibit ofthe Boneless, use of such Skinless hormones. Meat Heavy Young Broiler Roaster – and about 1 pound or less Any brand of chicken can be labeled 6 to 8 pounds, sold fresh or “no addedOf thehormones;” three major however, protein species,Pullet chicken – young is female the most breeder frozen through retail grocery, any packagee cient of chicken converter with of that grain to meat.chicken that produces fertile both whole and parts; less than type of label must also state that hatching eggs, which become 10 weeks old; typical “roaster” federal regulations prohibit the broilers for the market Light Hens – produce table eggs; use of hormones in poultry Raised without Antibiotics or typically not used for meat Organic – the USDA has a very No Antibiotics Ever – “Raised Natural – under USDA regulations, specific rule to define organic without Antibiotics” on a package of a “natural” product has no artificial production and prohibits the use of chicken indicates that the flock was ingredients and is minimally the term “organic” on packaging of raised without the use of products processed. Most ready-to-cook any food product not produced in classified as antibiotics. Animal chicken can be labeled “natural” accordance with its rule. According health products not classified as to USDA, the organic label does antibiotics may still be used. The New York Dressed – a whole broiler not indicate that the product term “antibiotic free” is not allowed with head, feet and entrails intact has safety, quality or nutritional to be used on a label. All chicken No Hormones Added – no artificial attributes that are any higher than should be “antibiotic-free” in the or added hormones are used in conventionally raised product sense that no antibiotic residues are

Tyson Foods Fiscal 2017 Fact Book 19 CHICKEN present in the meat if the withdrawal periods and other precautions required by the government are observed by the chicken producer

Retained Water – USDA prohibits retention of moisture in meat and poultry except for the amount that results from essential safety procedures, such as chilling processed chickens in ice-cold water to reduce their temperature and retard the growth of spoilage bacteria and other microorganisms. If any moisture is retained by the product after this procedure, it must be stated on the label

WOG – a whole, dressed broiler without giblets; abbreviation for without giblets Weights are ready-to-cook or dressed weight unless otherwise noted. Source: National Chicken Council; Arkansas Livestock and Poultry Commission

20 Tyson Foods Fiscal 2017 Fact Book

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