Tyson CEO shares Washington DC testimony
The chief executive of Tyson Foods, Donnie King, has published a prepared testimony ahead of an appearance before the US House of Representatives committee on agriculture in Washington DC on April 27.
A dispute arose between Tyson and the authorities in Washington DC in September afer US secretary of agriculture, Tom Vilsack, and the director of the National Economic Council, Brian Deese, made remarks during a White House press briefing criticising Tyson and three other meat companies (JBS, Cargill and National Beef) for posting revenue growth in the face of what they called unfair treatment of farmers and consumers.
Tyson rejected the claims and said an increase in meat prices had been caused by “unprecedented market conditions”.
In his April testimony, Mr King said an ongoing labour shortage at meat plants, largely the result of the pandemic, has constrained beef production while consumer demand for beef “continues to skyrocket”.
He explained that a shortage of people at meat plants last year resulted in a “sudden and swift rise” in the supply of cattle and a corresponding drop in cattle prices. At the same time, the price for finished beef rose because demand was high and supply low.
In further remarks, he said the situation been made worse by geopolitical issues, telling the committee that since March 2020, the cost of corn has risen by 127% and cost of soybeans by 90%. These inputs account for around 30% of the cost of finished beef, he said.
Mr King’s testimony also said that freight transportation costs had risen too, with international shipping container rates up 68% and diesel fuel up 104% year on year.
High prices have nothing to do with industry consolidation, he said, adding that concentration in the beef processing industry has remained virtually unchanged in the last 30 years.
