Saturday, March 29, 2008

Tyson CEO Rants

Tyson Foods CEO Richard Bond Food vs FuelTyson Foods , Inc. CEO Richard Bond recently again publicly lashed out against corn ethanol. Bond was videoed speaking to employees at a plant in Shelbyville, Tennessee (YouTube video) where he came out swinging against the American-grown fuel.

In his own self-described "rant", Bond blames corn ethanol for higher food costs. But he fails to mention the real facts, instead focusing only on the price of corn and not its limited impact on final consumer food prices. Nor does he fully discuss the major impact of increased world-wide demand for grains and meats and higher energy costs.

So let's help Mr. Bond with the math. A bushel of corn is 56 pounds. A one dollar change in corn price is .017 cents per pound (1 / 56) of corn. We already know that to produce 1 pound of chicken takes just 2 pounds of corn, so that's 3.5 cents per pound change per dollar increase in corn cost. And that's pretty much the worse case scenario because it assumes that only the higher priced corn is used and that all of the cost is passed along to the consumers.

The huge increases in meat prices are coming from somewhere else. Mr. Bond fails to mention that. He does briefly discuss increased foreign demand. But somehow that doesn't factor into his spiel. It's just ethanol that is bad bad bad. Higher transportation costs and energy to fuel his plants and to market his products? Must not be a big deal at all.

We took a quick look around the net to see what else might be bothering Mr. Bond. Now we know why he's in such a grumpy mood. Maybe some of Tyson Foods other recent woes are really on his mind while he rants:
  • Tyson closes plant after consumers no long demand Tyson's product
    Tyson is laying off 400 employees and closing its Wilkesboro NC chicken plant because consumers no longer want to buy cold chicken.
  • Tyson Lays Off 1,800 Due to High Transportation Costs
    Interesting that Bond doesn't mention this in his rants and raves. Must have slipped his mind. Tyson closes an Emporia, KS beef facility and blames it on higher transportation costs. A group of disgruntled employees came to visit the CEO at their headquarters but were only able to meet with lower-level management.
  • Tyson Dumps Sewage
    A Tyson facility was cited by Tennessee government for discharges into Duck river above allowable levels. Why didn't they connect to the city sewer? Apparently, money, money money (see article).
  • Donning and Doffing at Tyson
    Employees at Tyson are suing the company and ask for class-action claiming they were not paid for all hours worked.
  • Also the Des Moines Register covered the story of cheating their employees with the amazingly direct title, "Tyson Foods Cuts Corners on Pay"
  • Tyson Told to Reduce Water Usage
    Chicken processors were warned at a recent conference that they need to reduce their "water footprint". Apparently, chicken processing uses a WHOLE LOT OF WATER. Who knew?
  • Tyson Driving Smaller US Companies Out of Business
    As large food companies become even larger, they're driving small US companies and producers out of business while importing foreign food.
  • Tyson's Chicken Waste Spreading into Rivers
    A federal judge is considering whether to ban large chicken processors like Tyson's from spreading their chicken waste so that it can run off into rivers and into the water supply. Again, who knew?
  • Tyson Food has PETA as a New Owner
    PETA has become an owner in Tyson Foods and other large food companies. As a shareholder, PETA plans to submit resolutions requiring less cruel slaughtering of poultry. Now this fact alone could make any CEO a bit grumpy!
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