Shares in Tyson Foods fell today (6 August) after the US meat giant lowered its forecast for annual sales and warned grain costs would weigh on profits in its next financial year.

Tyson, which reported mixed third-quarter results today, said it expected annual revenue to be around US$33bn, $1bn lower than its previous forecast amid “weak domestic protein demand”.

The worst drought in 50 years in the US has hit corn and soybean yields and pushed up prices of the commodities. The US meat sector has warned of the impact of higher corn and soybean prices on profits. Tyson president and CEO Donnie Smith said today rising input costs and weak demand would “pressure” earnings in 2013.

However, the US department of agriculture has said it believes the rising costs of corn and soybeans could ultimately lead to more expensive meat and protein for consumers. Tyson said it predicted annual sales in its next financial year would be $35bn as it pushed through price increases.

Tyson’s third-quarter net profit was down due in part to a debt charge. Operating profit was up and sales increased.

For the first nine months of the year, sales were higher year-on-year but operating and net profit were down.

Shares in Tyson were down 4.84% at $14.66 at 10:37 ET today.