The Humane Society of the United States (HSUS) has submitted a shareholder resolution to Tyson Foods requesting that the Springdale, Ark.-based pork producer/packer “disclose to shareholders how it plans to meet the growing demand for pork produced without the use of gestation crates.”
HSUS points to “poor earnings” in Tyson’s third-quarter profit report released on Aug. 6, which showed a 61 percent drop compared with the same quarter in 2011. The company had a third-quarter 2012 income of $76 million, or 21 cents per share, on $8.3 billion in sales. That compares with income of $196 million, or 51 cents per share, on sales of $8.25 billion for the same period a year earlier.
However, as Gary Mickelson, communications director for Tyson Foods, points out, “excluding a charge for the early extinguishment of debt, our third-quarter earnings per share was comparable to the same period last year” at $0.50 compared to $0.51 in 2011.
“We produced solid results in our fiscal third quarter despite softer than expected domestic demand for protein,” said Donnie Smith, Tyson Foods’ president and chief executive officer, during the Aug. 6, release of the company’s third-quarter report. He cited difficult market conditions in both the pork and beef sectors as reasons for lower than projected 2012 earnings. The rising cost of grain triggered by this summer’s widespread drought may continue to impact the company’s profit into 2013.
“Tyson’s dwindling sales should be a wake-up call to the company that it needs to stop lagging behind its competition and customers on this important social issue,” said Matthew Prescott, HSUS food policy director. He points to Smithfield Foods’ and Hormel Foods’ decision to stop using gestation-sow stalls in company-owned operations within five years.
As a shareholder, HSUS pressured those companies on the gestation-stall issue. An HSUS referendum proposed to end the use of gestation stalls in production facilities associated with Tyson failed at the company’s annual meeting this past winter. In May, HSUS filed a complaint with the U.S. Securities and Exchange Commission asserting the Tyson made "deceptive public statements related to animal well-being."
Regarding the current HSUS request, Mickelson told Pork Network, “We’re aware of the shareholder resolution from HSUS and will be reviewing it.”
Specific to sow housing, Mickelson said, “We’re committed to humane animal treatment at all stages of food production and we expect the same from farms that supply us with livestock. Earlier this year we called on the hog farming industry to accelerate research into improved housing and production practices. We believe this research should be completed as soon as possible to address questions and market demands.”
Mickelson pointed out that Tyson buys hogs from thousands of family farms. “Many of whom have individual housing (gestation stalls) for mother pigs, some of whom have group housing; experts believe both housing systems are humane for the mother pigs when managed properly,” he added. “As our customers provide consumers with choices, we will continue to work to meet those needs.”
Tyson Foods’ equity ownership of live-hog operations represents less than 3 percent of the company’s total pork production. That production is handled by The Pork Group, a wholly owned subsidiary that produces finished hogs, feeder pigs and weaned pigs for sale to pork processors and finishers nationwide.