Lakeside Production Increase to Start in June; Expansion Will Help Reduce Backlog of Cattle

BROOKS, Alberta, May 11 /PRNewswire-FirstCall/ -- Lakeside Packers will soon take another step in the effort to reduce the oversupply of Canadian cattle.

The chief executive of Tyson Foods , which owns Lakeside, today announced that the Alberta plant plans to begin increasing its beef slaughter capacity in mid-June. The change is the result of a $17 million plant expansion project, which has been underway since last fall. The Lakeside plant has been operating at maximum capacity for much of the past year and a half because of record-large Canadian cattle supplies.

"Our investment in this project will help address the backlog of cattle caused by the continued closure of the U.S. border," said John Tyson, chairman and chief executive officer of Tyson Foods, who visited the Lakeside plant Wednesday. "It also reflects our long-term commitment to the Alberta beef industry, which we fully expect to rebound from the market challenges of the past two years."

The plant's capital investment has involved expanding the plant's beef carcass coolers and streamlining parts of the beef slaughter operation. The changes will increase Lakeside's beef slaughter capacity from approximately 3,800 cattle per day to 4,700. While some aspects of the project will not be finished until fall, enough have been completed that plant officials expect to begin gradually ramping up production next month.

The specific timing will largely be driven by the company's ability to hire additional workers. The expansion is expected to create as many as 300 additional jobs, eventually increasing the plant's workforce to 2,700 Team Members.

Tyson Foods also continues to support efforts to reopen the U.S. border to Canadian cattle. Last month the company filed a brief in support of a U.S. Department of Agriculture (USDA) appeal of a court decision that has delayed the reopening of the U.S. border to Canadian cattle imports. The company brief calls the court decision "bad" law and "bad" for consumers and notes there is no scientific basis for keeping the border closed.

A preliminary injunction was granted in early March by a federal judge in Montana at the request of the Ranchers-Cattlemen Action Legal Fund (R-CALF). The injunction has prevented implementation of USDA's minimal-risk rule, which would re-establish U.S. trade with Canada for live cattle less than 30 months of age.

According to the amicus brief Tyson filed with the 9th Circuit Court of Appeals in San Francisco, the injunction should be lifted and the final rule should be permitted to take effect.

"The U.S. beef industry is part of a North American market and we believe it's imperative for there to be a harmonization of trade rules with Canada and Mexico," Tyson said.

Tyson continues to run its U.S. beef plants at reduced levels of production due, in part, to the continued U.S. ban on Canadian cattle. About three to five percent of the cattle purchased for the company's domestic plants have historically come from Canada. Earlier this year the company temporarily suspended operations for more than a month at four plants as well as second shift processing at another facility.

Lakeside Packers, part of Lakeside Farm Industries, began operations in 1974 as a beef slaughter operation. IBP, inc. bought Lakeside in 1994 and added a boxed beef processing operation. IBP was subsequently acquired by Tyson Foods, Inc. in 2001.

Tyson Foods, Inc., founded in 1935 with headquarters in Springdale, Arkansas, is the world's largest processor and marketer of chicken, beef, and pork and the second-largest food company in the Fortune 500. The company produces a wide variety of protein-based and prepared food products, which are marketed under the "Powered by Tyson(TM)" strategy. Tyson is the recognized market leader in the retail and foodservice markets it serves, providing products and service to customers throughout the United States and more than 80 countries. Tyson has approximately 114,000 Team Members employed at more than 300 facilities and offices in the United States and around the world.

Forward-Looking Statements

Certain statements contained in this communication are "forward-looking statements" such as statements relating to the anticipated increase in slaughter capacity and number of jobs created. These forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Among the factors that may cause actual results and experiences to differ from the anticipated results and expectations expressed in such forward-looking statements are the following: (i) fluctuations in the cost and availability of raw materials, such as live cattle, live swine or feed grains; (ii) market conditions for finished products, including the supply and pricing of alternative proteins, and the demand for alternative proteins; (iii) risks associated with effectively evaluating derivatives and hedging activities; (iv) access to foreign markets together with foreign economic conditions, including currency fluctuations and import/export restrictions; (v) outbreak of a livestock disease which could have an effect on livestock owned by the Company, the availability of livestock for purchase by the Company, or the Company's ability to access certain markets; (vi) successful rationalization of existing facilities, and the operating efficiencies of the facilities; (vii) changes in the availability and relative costs of labor and contract growers; (viii) issues related to food safety, including costs resulting from product recalls, regulatory compliance and any related claims or litigation; (ix) adverse results from litigation; (x) risks associated with leverage, including cost increases due to rising interest rates or changes in debt ratings or outlook; (xi) changes in regulations and laws (both domestic and foreign), including changes in accounting standards, environmental laws and occupational, health and safety laws; (xii) the ability of the Company to make effective acquisitions, and successfully integrate newly acquired businesses into existing operations; (xiii) effectiveness of advertising and marketing programs; and (xiv) the effect of, or changes in, general economic conditions.