Good morning. I'm Andrew Strelzik, BMO's Agribusiness, Beverages and Restaurants analyst, and I'm delighted to welcome everyone to our annual Farm to Market and Chemicals Conference. The conference is now in its third decade, and this year we have the pleasure of hosting over 100 companies and 1,000 total attendees over the course of today and tomorrow. Our goal today remains unchanged: provide a forum to explore key themes and investment opportunities across the food value chain. The conference will highlight fireside chats and presentations from senior executives of leading companies spanning from farm to market, including the fertilizer, chemical, agribusiness, protein, food, beverage, distribution, and food retail sectors. I want to take a moment to thank the many people who make the conference the success you see today. The management teams have been incredibly generous with their time and insights that form the foundation for the conference.
Our sales force, editorial staff, and conference coordinators are remarkable in their commitment to make this event the success for investors and companies alike, and the investors joining us from across the globe who really make this event special. In addition to the variety of company and sector dynamics we expect to explore over the next two days, we seek to keep the conference relevant each year for the rapidly evolving dynamics across the agriculture and food value chain. We're fortunate to have as our keynote lunch panel today a discussion with four senior leaders from BMO's Commercial Food and Agricultural Lending practice about the state of the union around agriculture and farmers. Tomorrow's keynote presentation from BMO's Chief Investment Strategist, François Trahan, will focus on how investors can think about positioning portfolios for a potentially prolonged period of inflation and the impact on the consumer.
We hope you come away from the conference with incremental insights and a better understanding of company strategies and outlooks, opportunities and challenges, key issues, and new ideas. If you have any questions or need any help, please don't hesitate to ask. Thank you, and enjoy the conference.
We're fortunate to have Tyson kicking off our conference again this year. Under the leadership of CEO Donnie King, Tyson has the opportunity to realize a third consecutive year of operating profit growth as its disciplined focus on controlling the controllables has materially improved performance in its chicken business, enabled prepared foods to outperform peers, and increased earnings contributions in pork and international, all while navigating an increasingly challenged beef operating environment.
Donnie is joined by CFO Curt Calaway, who continues to enhance Tyson's leadership team through his disciplined approach to managing Tyson's balance sheet, including $2 billion of debt reduction over the last 18 months and creating greater flexibility to return cash to shareholders. Donnie and Curt, thanks for joining us today.
Morning.
Maybe I'll kick things off on the prepared food side. Your performance in prepared foods has been a little bit different than maybe what some of the peers or the rest of the category has been experiencing from a volume growth perspective, profit growth perspective. Can you talk about what's kind of differentiated your portfolio from what we've seen from the rest of the category?
Sure, and good morning, everyone. Thanks for the question, Andrew. You know, what is it now? About three years ago, we talked about a multi-year strategy as it relates to prepared foods. You know, I gotta tell you that multi-year strategy is working, and we're starting to see the compounding benefits from that. We just completed our second consecutive quarter of volume growth in prepared foods. If you look at peers in the packaged foods group, you would find that we're one of the only companies, if not the only company, that's actually growing in the space. We're very happy about that. You know, there are several things that differentiate us in this area, and it starts with execution. We're executing at a very high level today in prepared foods.
We've done a lot of great things from one end of the supply chain to the other, and it truly is an end-to-end approach in terms of eliminating waste up and down, you know, all the different functions within prepared foods. We're very proud of that. It starts with the simple execution and this commitment to execution, whether that be inside the four walls of the plant. We had a lot of opportunity from a capacity utilization perspective. A lot of processes were not disciplined. We had a lot of opportunity there to be better. We simply began to grow our volume. We've done that very well relative to the peers, our peer set.
You know, the operating environment out there in packaged goods, in food in general is not, it's not an easy place to play presently with inflation and the consumer under pressure and so forth. Just that multi-year approach, targeting customers and consumers, I'll go back a little ways. When I became the CEO right at five years ago, there were three things that we need to do. Remember, this is back in COVID, in the middle of COVID. There were three things we needed to do, and frankly, we weren't doing any of the three very well. The first one was winning with customers and consumers. We weren't winning. We weren't servicing them. We weren't doing the basics very well at all.
Then our team members, again, right in the middle of COVID, we're trying to staff plants, get people to work, get people back in offices, those kinds of things. We had to win with our team members. We didn't have a chance to succeed with customers and consumers if we didn't have our team aligned. I'm happy to say that we do have that today. Then execution is the third component of that. Frankly, we were not very good at all at execution in the most fundamentals of things. So the biggest difference between now and then is that we do all those very well. We also made a decision, and I just referenced customers and consumers, but getting aligned with strategic customers.
That looks a lot like having multi-year deals with customers where we create this win-win relationship whereby there's shared risk. In prepared foods, or in chicken even, you know, you shared risk relative to the inputs. It could be grain. We owned execution and the customers in this case would own the responsibility of delivering the volume, which ultimately gave us, you know, a stable volume, and at the same time helped us absorb overhead or fixed costs. All that worked together. You know, of course, the brands have all done very, very well. We've really tightened up, you know, our focus and our execution as it relates to product innovation and how we collect information, data, and analytics as it relates to the consumer.
I might add just real quick, Andrew, just to dive into Donnie's point on execution and a multi-year journey, right? We started that journey, as Donnie s aid, a couple of years ago, but it was really about the starting with the execution inside the plants, the four walls of the plant, right? We knew we had great opportunity there, but we got very dedicated and disciplined on making sure that we were operating with the level of intensity inside a prepared foods business that we did in the rest of the business. That really was the start of a catalyst of reshaping our cost structure and allowing us to make some choices and investments that are what we're seeing the benefit of today relative to innovation, relative to R&D activities, right, and really meeting the consumer's needs.
It started with making sure we had a really well-running and a great execution inside the plants.
You've talked about utilization rates across the business. In prepared foods, has anything changed with the asset base, or are you just getting more out of what you have or have had?
Sure. The beauty of execution is this: we had to make some decisions in prepared foods. We did it in all businesses. In terms of the footprint of the assets we had, we had some that didn't make sense anymore, some that, you know, we probably held on to a little too long, some where products, product mix changed, that type of thing, but we did that. Through the fundamentals of the business and execution, you know, just eliminating waste. Eliminating waste means you improve efficiencies throughout the organization. At the time we started this, we had excess capacity in our prepared foods business.
The goal there was to grow the business, fill the capacity, and say yes more often to customers, which, I mean, I realize that sounds a little foolish, but we literally had to do that to fill up the plants and run more efficiently as you fill them up, as you get more efficient, you have more capacity and you got more room to grow, and you have a better cost structure and it just begins to compound, and good stacks on top of good.
What has changed from an innovation perspective in prepared? I mean, you talk about the data and analytics and some of those things. Can you talk about how that approach has evolved?
I think the first thing is we're leading with data and analytics. We, you know, we've begun, like I'm sure many have, began to collect first-party data so that we can connect directly with a consumer. We understand what they like, what they dislike more readily. They give us that instant feedback. Whenever you go and you shop online and you see that one through five star rating or some third parties that will describe your product about what, you know, how they think about that, getting all that right is really important. You start with a more focused approach to innovation. We, like I'm sure many, at one time, you know, it was we can do anything, and we tried anything and everything.
What we had to do is get more targeted against those consumers, and part of our strategy was to become more targeted toward younger consumers. We were over-indexing, which is not a bad thing, to older consumers, but we were under-indexing to younger consumers and they have different perspectives in terms of what those product qualities should look like and engaging with them and getting more targeted. Part of this process is using tools and analytics to You know, everybody has a Stage-Gate process. It typically takes 18 months in the packaged goods arena. There's nobody that is willing to entertain an 18-month product innovation cycle. I mean, the customer, frankly, is going to get somebody else to produce the product, provide the product if it takes you 18 months.
You got to streamline that and do a lot of concurrent activity as opposed to doing everything sequentially. All those things have worked better. We got a sharper focus on the innovation in our business, and that's working very well. We just recently launched a new high protein line of breakfast under the Jimmy Dean brand. Bowls, sandwiches, and even a protein waffle, which was an expansion. All of that was driven based off those data and analytics that I just referenced, and they're all doing very, very well in the marketplace.
I think as well, you know, during the last several years, as Donnie said, we've focused on making sure what we're executing, we're executing very well. Two other catalysts that we're in were, you know, we condensed and brought in a number of our business units that previously had been more disaggregated, right? The benefit of having together collectively with the business units, working with one another, but also working with R&D and innovation all together in the same place, has really showed the benefits. You couple that with being really aligned with the business unit to make sure what we are working on are the big-ticket items that are going to drive a difference and are really resonating with all the data and insights that we've gathered, to make sure that each one of those investments produces a higher return.
You started the internal improvement journey in the chicken business earlier than you did in the prepared side. Can you maybe compare the opportunity in prepared to what we've seen you execute against on the chicken side? Is the magnitude of improvement the same? Kind of how do you think about looking at chicken as kind of a leading indicator to what you can achieve in prepared?
Sure. I'd first acknowledge that we have had great success in chicken over recent years and the playbook that we had there is very similar to the playbook that we have in prepared foods. These are all simple things. They're simple, but yet challenging to do, is control the controllables. People can get at times sidetracked by what is the cost of grain, what is the inflation, what is, you know, what's the price of gasoline, what's gonna happen in the Strait of Hormuz, all these different things. Well, fact of the matter is, I don't control any of those. What I do control is what we do inside our business. Getting everyone focused against that has been really important.
In terms of across all of our businesses, the playbook that you referenced in chicken is the same playbook, or very similar, in prepared foods. It's very similar in our beef and pork businesses, in our international business as well. It's controlling those things that we can control. It's executing with excellence. It's being aligned with customers and consumers and taking care of our people that make all this happen. What's the size of that? Order of magnitude. Remember, our prepared foods business is roughly half the size of our chicken business. The upside for prepared foods and continue to growing that organically and inorganically, there's tremendous upside to this business.
You know, just the multiple, you know, the opportunity, the branded portfolio that sits inside prepared foods and also the Tyson brand as well, those are all really, really good things. The playbooks are very similar. The upside would be similar in terms of order of magnitude.
It's obviously been a very inflationary environment here so far this year. So I guess I'm curious, like, to what extent have the improvements been masked by that so far this year? When I think about your assumptions on the inputted cost environment going forward, what have you assumed in your outlook? Are we going to see that abate and maybe some of the benefits start to increasingly come through from a profit growth perspective?
Sure. Great question. The, you know, in looking at inflation, you know, we think, let's say for prepared foods, the raw material, beef, pork, turkey, some chicken, the inflationary effect of that, we think will persist. I don't know for how long. I don't know, you know, there's a point where you reach the point where the consumer will back away based on pricing. Inflation is real. It is persistent. We have modeled in to our 2026, and as we even think about 2027, based on what we know now, we don't see that going down in any kind of meaningful way. We have to manage those things very well. You say, "Well, why do you think that?" seven out of the last eight quarters, we've seen inflation in raw materials.
We think that's probably a pretty good trend. We don't like that. The consumer doesn't like that. What we spend our time doing is trying to offset and defray those costs and try to make sure that through pricing, promotion, all those levers that we have, that we make that product relevant and that we make it affordable for the customer and the consumer, while maintaining volume. I don't see any sign of that going. You've got gasoline prices now. In our Q3, you're seeing gasoline prices go up. You've seen them go up well over $1, that'll start having impact in terms of the consumer and where they buy, where they shop, which channel they do that in.
I think, you know, just to build on what Donnie said, seven out of the last eight quarters in prepared foods, we've seen commodity inflation. You look at our performance relative to the last three years, it's incredibly stable, but actually growing at the bottom line and, as Donnie mentioned earlier, growing at volume. Right? We've certainly, to an earlier question you asked, you know, demonstrated a very different performance. Our execution, what we said at the beginning around being very efficient inside the plant, gives us the capacity to make choices between investments that we're making, and having the benefit of driving not only volume growth that we're talking about, but our products in retail are performing incredibly well. Right?
That allows us an opportunity to have a conversation about multiple ways to deal with increasing inflation, one of which is increased volume, right? It gives us multiple options based on the moves that we made and our cost structure improvements and discipline we've had for several years now.
Given some of the challenges that the rest of the category is experiencing, are you seeing changes in competitive behavior, especially with a consumer that, you know, may be more stretched? If so, or if that were to happen, what are the levers that you have to still achieve your goals?
Sure. You know, I would say first and foremost, we're not comfortable in the environment that we're in. We would never be comfortable with a competitor and saying, "You know what? We're good. That we're as good as we can be." We believe we earn the right to serve that customer every day. That means we gotta provide the right kind of quality, the right kind of service, the right kind of innovation. What levers, you know, if, you know, if there's a competitive response, there's certainly some of that goes on today, but we just have to perform better than them. We have vehicles to do that and process in place to do that with our customers. We talk a lot about strategic customers. Some would call it key customers.
There's a number of different names, but it's those customers you intend to win with. In many cases, it's those customers that are growing and winning in the market themselves. What is really important to me is that you keep volume growing. I think that is a critical indicator of your success and the strength and health of your business. We watch that very closely across all businesses. In prepared foods specifically, you know, we adjust those levers.
We make sure that, you know, the products that whether it's pricing, promotion, those type things, keep the product on the shelf, keep it moving, making sure that the quality is there, making sure that we are best in class in servicing those customers, and then making sure that we continue to bring new innovation for those new consumers that we want to intersect with. Namely, as I referenced earlier, is younger consumers.
Can you talk a little bit more about those strategic customer relationships?
Is that more of a volume benefit for the company, a visibility benefit, a margin benefit? Kind of how does that impact your business?
If I look foundationally or fundamentally, those strategic customer relationships, they're critical. They're critical to our strategy. They're critical to, you know, our success and, you know, when I talked about becoming the CEO, you know, there was a period where I thought I believed that we were mad at the customer and kind of irritated that the customer would want us to sell them product. We had to produce it. We had to change that, right? Getting aligned with those strategic customers opens up a lot of opportunities. It is truly a win-win relationship. What does that do? It provides stable volume. It provides fixed cost absorption, and it also allows us to have conversations with those customers. Let's say inflation enters in in the raw material.
What that allows us to do is have a conversation with the customer. Instead of increasing the pricing or passing on pricing, can we offset that with incremental volume to fill up that line to offset that so that we keep our price points, you know, relevant as it relates to the consumer, so that we keep that volume moving, and not only for us, but also for the customer. It's working there. The strategic customers are critical to the model that we have in place. We handle it, you know, with kid gloves and, you know, it's working very well.
Sure.
We got more and more customers that we bring online where we have shared risk. The best part about all that is, one, you're growing, but secondly, you change all the conversations from price to how do we grow together? We, you know, when our customer's business grows, we tend to grow with them. It's working very well.
Just add, you know, the framework behind that as well, Andrew, right, as Donny mentioned, is absolutely on ensuring that we're providing a quality product.
Right? It tastes good, right? Those elements are always there. Also around the innovation, and Donnie touched on a few elements of what innovation we have brought, but the continual evolution and new things introduced that are resonating with the customers and consumers, as I mentioned earlier, but it's service, right? Those elements of assuring our customers that we're gonna be there with a quality product consistently delivered, service on time, and we're bringing innovation, creates a point of difference for us to offer up in that partnership.
Great. Shifting gears to the chicken business. I think one of the most surprising things that we heard from you guys in the most recent quarter was the discussion around the genetics business and the profitability improvement there. Can you talk about what exactly changed, and how should we think about that evolving from here? Does that build? Does it change? If you could talk about that?
Sure. Sure, it was brought into the conversation in the most recent earnings. Let me start with explaining how our genetics business works inside Tyson. In our genetics business, which we've been in for a long time, it's always been a part of our chicken business, it has always been a service to our domestic chicken business. At the same time, we have sold that product to customers around the world, competitors included. That's the way it works. It all rolls up into the chicken segment. We have seen a structural change in that business. I'll give you a short history lesson.
If you go back to about 2015, we primarily had one genetics line of genetics that serviced essentially chickens, live chickens that would be like 7.5 pounds and down. We had a very good package for that. If you recall back in 2015 and moving on, chicken bird weights began to get higher. We made a couple of attempts to have a line of genetics and quite frankly, it didn't perform. It didn't perform for us. It didn't perform for customers. We were sitting without a line of genetics. Back to 2015. From 2015 all the way into 2023, 2024, we began to see the performance of the genetics business continue to decline influenced by all those things I just referenced.
We launched a new breed, a new line of genetics that had all the characteristics of the breed that we had, but it also addressed yield and egg production for a bigger bird that seven and a half pounds and larger. That's been in development now for some time. We've done tremendous field trials and so forth with that. We're actually harvesting, you know, we're early innings, but we're harvesting in our Q2. Some of those birds are, let's call it, you know, we're about a fourth of the way there in terms of the birds that we intend to use out of this big bird population. We're seeing the benefit of that from the Cobb or the genetics company.
We're seeing the benefit on their P&L because we're selling that product. It's largely being sold to Tyson, right? Our broiler division, our domestic chicken business. That has done well. You saw the benefit of that, and we called it out in our Q2. What you haven't seen yet is those genetics flowing through the domestic chicken business, and we're again, fairly early innings in that. In terms of the population we will put on those new genetics, you know, let's call it mid 2027, you should see, you know, you should see the impact of that across our business where that is. That has a sizable uplift in it, in itself. Think breast meat to live yield, which is probably one of the bigger measurements as it relates to chicken, and particularly in the big bird deboning arena.
You know, that looks really good. We got our genetics working. We got a genetic for a smaller bird, a larger bird, and it's performing very, very well. That overnight success took a decade. It's a pretty protracted event.
speaking of 2027, probably the most frequent question I've been getting recently is about your ability to grow chicken profits again in 2027. You've obviously had tremendous progress on the operational efficiencies.
Or operational improvements. You have this genetic step up. I think people are pretty worried about the kind of underlying chicken margin environment. How would you address that? What's your level of confidence in your ability to grow chicken again, profits again in 2027?
Sure. I think a couple things I would point out with that. If I look at the results that we delivered, I think it's important to note that we saw a pretty significant drop in the market price for chicken breast meat, chicken wings, chicken tenderloins, the whole deal, in our Q2. I know industry saw that as well. That's the first thing to point out. I think the other thing that is most important here is our results were execution led. They weren't market driven. That's really satisfying to me in that we control our destiny with that, controlling the controllables.
If I think about, you know, the balance of 2026, 2027, and I'm certainly not guiding into 2027 at this point, you know, I think what we're doing in our chicken business and the compounding benefit of that will continue to move into 2027 and beyond. I think we will continuously get better as we get better at every one of these, in every part of this business. You know, there's a, you know, Hall of Fame coach, Nick Saban, would say that to be successful as a team, that every person needs to win their spot. When I talk about execution, executional excellence, it's every person up and down the supply chain winning their spot.
My confidence in going forward is based on this execution that we do and everybody winning their spot, not based on what the market might give or take. I won't say I'm agnostic to that, and I won't say I'm not impacted by that, but our model, we have a little insulation to that, particularly based on that customer relationship, strategic customer relationship, where we can adjust pricing and we change the narrative from pricing to, you know, volume growth and that type thing.
I think our second quarter was a good proof point, right? As Donnie had said, right, commodity chicken pricing was down, given our mix and our portfolio, right, our average price held through, right? We grew volume, right? That was a clear point of differential that the model that Donnie talked about between strategic partnership, execution within the plants, we've made a lot of hard choices over the years to set us up for much better success. We've rededicated the capital to the right mix of projects to ensure that we have that sustainability, then connect it with the genetics business. Remember, we're as end-to-end as can be between genetics all the way to rendering, everything in between sets us up with a point of difference as well.
Maybe, if I could add one more point to that.
Sure.
In our chicken business, we've had six consecutive quarters volume growth. In the most recent quarter, we had in our chicken business, about 2% volume growth. Across these six quarters I referenced, our branded value-added business has grown 3x that. That gives you some indication of where our focus is in growing our business. It's in the branded value-added. We are a huge player in that. We have the number one brand of chicken. That's where we're growing in there. It's less about commodity. It's more about branded value-added on both fresh and frozen product.
That, that was super helpful. On the beef side, where things have been a bit more challenged, you have made some changes, closing a plant recently, adjusting some shifts. Originally, when you, when you made that move, you talked about we'll get some, you know, some productivity, but there's also some incremental costs. How has that played out? How is that impacting your network and your profitability, having made that decision?
As a reminder, the changes that we made, we announced in November, but they didn't really go into effect until our Q2, the quarter that just ended, it's early through that. The expectation was processing within our new footprint, which was designed for where we felt the cattle would be available in the future, not yesterday or not today, but the right size for where it needed to be. Closing one facility and taking one from two shifts to one was the move for us to make. That enables us to run the available cattle in the industry in an environment where we can be absolutely competitive as anybody else. We're not gonna control cattle costs. We're not gonna control the ultimate cutout.
What we can do is operate it with great efficiency inside our network, and it's early, right? We're starting to see the benefits of that as we've moved into that footprint. Now, naturally, when you're in a transition period, you know, while, yes, there's a date in which that happens, there's still, you know, cost associated with it as moving things around or inefficiencies as you're running that activity. Our third quarter will be the first point in which we're operating completely in that new footprint, and the expectation of being absolutely competitive in the industry is there.
Does that balance between cost and efficiency? I mean, is that the point that you're making, I guess, that now we're gonna see that, you know, lean a little more heavily towards the efficiency side than the cost side?
Yes.
Go ahead. Sorry. We're seeing that today. A lot of those costs were short-term in nature as, I mean, you know, the closing of a plant and then going to one shift and another, a lot of those costs associated with that were short-term in nature. Essentially, we've worked through that. Those plants that we have and the footprint we have, we're operating at a very high level of efficiency, or utilization, I should say, which is making us more efficient, more cost competitive, which was the intent of the moves that we made.
Sure. The guidance implied in the back half of the year, right, is another proof point in the expectation that while we're still in a loss situation, right, narrowing those losses in the back half of the year, were apparent in our guidance for the back half.
You guys were one of the first, I think, to kinda call out that you were starting to see some heifer retention about a year ago. How has that evolved? Are the conditions there for an acceleration in heifer retention? Are we seeing it yet? Or is there any hope?
It's still, I would say, spotty and regional. Right? The pace at which, perhaps, some had forecasted before, you know, hasn't picked up. Look, it's still gonna be a tight cattle supply situation as we move through 2026 and into 2027. As I said earlier, what we're controlling, and back to Donnie's mission for us to make sure we're controlling controllables, that's what we did with the footprint, and that's what we're executing, and we'll manage through in 2026 and into 2027, and we'll still manage in a tight cattle supply.
With all the improvements in the business, we've seen the earnings trajectory really pick up. As that continues to happen, as the cash flow improves, you know, how are you thinking about incremental capital deployment? What are the priorities around that from here?
Happy to say in addition to improving guidance for the year, between $2.2 billion and $2.4 billion, we also raised free cash flow guidance for 2026 to $1.2 billion-$1.8 billion. Our CapEx has been in the range, as we've said, the entire year between $700 million and $1 billion. Our historical average is a little above that, more like $1.2 billion. I'll hurry on to remind everybody that we spent a lot of capital over the last couple of years. We put a lot of capacity expansion in the network, built four domestic plants in the United States, built seven internationally, we added a lot.
We've been working on certainly filling that up and operating with excellence, as Donnie mentioned earlier. Ultimately our, you know, long-term expectation of leverage is at or below 2x , and at the end of our Q1, we hit 2.0x . Naturally for us, Q1 is, we generate a little excess cash. Q2, we use a little cash, just the normal cycle. Leverage was at 2.2% as we finished Q2. It's a very much a sweet spot for us. We have ultimate optionality and flexibility. As you pointed out earlier, in the opening comments, we've been very diligent paying down gross debt. $300 million this quarter, $1 billion in the last year, you know, nearly $2 billion in the last 6 quarters, right.
We've demonstrated a commitment to that, we have a lot of optionality and flexibility. I'll just end, you know, with, you know, our return cash to shareholders as well. We've returned in the first half of the year just under $450 million through dividends and share repos. I think it's a very impressive stat.
You talked about some of the investments and capacity expansions that you've made. Are there other internal projects that as you look forward are exciting or interesting that would be kinda top of mind as you weigh that against maybe further cash returns to shareholders?
Yeah, I'll start. Donnie can add anything as well. Look, you know, we have a lot of opportunity ahead of us, right? We've, as I said, we had a little bit lower CapEx this year. That was planned, as we were, you know, fully digesting all the investments we put in the last few years. We have a lot of runway ahead of us. The businesses have a lot of views relative to what can continue, making those investments in the business that we see really great returns on. We're excited about that. You know, the optionality and flexibility that capital structure provides us gives us a lot of opportunity.
Yeah, if I could add this. You know, I talked about these strategic customers. One of the responsibilities that go with that is to make sure that we've got capacity in front of us. I also talked about utilization and how important that was. Our responsibility to our customers to continue to grow with them as they grow is to make sure whether it be harvest capacity, you know, fully cooked capacity, whatever the capacity is, to keep that in front of us, and we go to great lengths to plan that capital deployment, so it'll be ready before the actual demand materializes. That's where the capital will be spent. There may be inorganic opportunities. It's certainly a great time to be thinking about if you wanted to buy something.
You know, Curt Calaway is pretty disciplined as it relates to capital. We're very disciplined in that whole approach in terms of deployment of capital.
I think I have to follow up on that point. Is that a geographic kind of diversification kind of comment? Is it in any specific area that would be most interesting, I guess?
Well, if I were to Yeah, it's gonna be poultry and prepared foods.
Yep.
I mean, that's where we're growing the most. That's where we see the opportunity. That's where our strategy will lead us. Consumers today are looking for food that first and foremost tastes good, but they're looking for food that is nutritious, affordable, and convenient. When you can intersect with a consumer in that way, where all three of those things are important, you have a real high likelihood of success.
Maybe I'll just close with this question. When you think about all the improvements to the business over the last several years, now kind of transitioning to prepared, more recently, how far along in the business improvement journey do you feel like overall for the total company you are? Where are we? What inning, however you want to frame it, are we in this, in this opportunity?
You know, I can look across all businesses. I will tell you we're executing as well as I've seen us execute. I've been at Tyson since 1982. I'm seeing great execution across every one of our businesses. I'd also have to look you in the eye and tell you that there's still plenty of runway ahead in terms of that. I don't think you will ever hear me tell you that, you know what. We have arrived. There's nothing left to go get. Because every rock we turn over, we find something that leads us down another path and another way to eliminate waste and improve profitability. The journey will never be over. It's unfinished business.
Our mindset is to wake up every day and be better today than we were yesterday, be better tomorrow than we are today, and so forth. It is a continuous improvement mindset.
Great. Out of time. We will leave it there. Thank you both very much for being here.
Thank you.