Meat prices are losing their sizzle even as commodity and labor costs are rising in a double whammy for meat packers.

Why it matters: Meat price hikes were eye-popping earlier in the pandemic, casting a spotlight on food processors that capitalized on the sudden surge.

Driving the news: Tyson Foods' stock closed down 16.4% Monday after the company cut its sales forecast on declining demand for pork and beef, and said its costs are rising.

• "Market conditions remain very challenging," CEO Donnie King said on an earnings call.

State of play: Tyson's average prices declined 10.3% and 5.4% for pork and beef, respectively, in the company's most recent quarter, compared with a year earlier.

• And now chicken prices are coming under pressure, too.

What they're saying: "Commodity prices for most fresh chicken cuts are much lower than last year, with boneless breast meat, tenders and wings down more than 50%," King warned.

• He noted that even where the company is not fully exposed to commodity markets, like in its value-added products and prepared foods segment, "we are not immune to their dynamics" and that the effects will show up on "a lag."

Between the lines: Input prices — such as the cost of feed, grain, livestock and wages — have been eating away at Tyson's bottom line.

• The company swung from a $829 million profit a year ago to a $97 million loss for the period.
• "The quarter was disappointing as it's clear the macro environment is not in favor of protein processors," CFRA Research analyst Arun Sundaram wrote Monday as he cut his target price on Tyson's stock from $65 to $59.

What to watch for: The consumer price index will be released Wednesday and the producer price index will be released Thursday, telling us how things changed in April.

• Signs "point to further disinflation of consumer food prices," Bank of America economists Stephen Juneau and Michael Gapen wrote in a research note.

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