Tyson Foods dismisses blame for White House conclusions of meat price hikes
Tyson Foods categorically rejects conclusions drawn earlier today by the Secretary of Agriculture and the Director of the National Economic Council during a White House press briefing, according to a press release from Tyson on September 8, 2021.
The USDA recently released a report detailing consumption inflation factors in the food sector, none of which are related to consolidation or industry-wide. The report is available by clicking here.
Rising beef prices due to unprecedented market conditions
As we explained in detail to the US Senate Committee on the Judiciary, in testimony provided in August 2021, which can be accessed by clicking here, the increase in the price of beef, in particular, is due to market conditions. unprecedented.
Multiple unprecedented shocks in the market, including a global pandemic and extreme weather conditions, have resulted in an unexpected and drastic drop in the ability of meat processors to operate at full capacity. This resulted in an oversupply of live cattle and an insufficient supply of beef, while demand for beef products was at an all time high. So the price of cattle has gone down, while the price of beef has gone up. Today, the prices paid to cattle producers are on the rise.
Labor shortages – the industry’s inability to adequately staff its factories – have exacerbated the situation. Labor shortages are also affecting the country’s pork and poultry supply.
Tyson Foods today pays its frontline workers an average of $ 22 an hour, including full medical benefits; we recently announced paid sick leave and additional vacation pay starting in 2022. The company is also piloting child care programs and providing access to immunizations to all of its US employees.
Inaccurate Claims of the Impact of Consolidation
It is incorrect to suggest that consolidation in the meat processing industry results in higher prices for consumers. In fact, evidence of healthy competition can also be found by looking at historical results. For example, we have seen an increase in the availability and quality of beef, as the price has become more affordable over the past quarter of a century: the data shows that while the concentration of the industry has remained relatively constant for nearly 30 years, the quality has improved significantly.
Furthermore, as the United States Department of Agriculture table below clearly illustrates, historical ratios of the margins of producers and feeders of cows and calves to processors, including Tyson, show that Cow and calf and feeder margins exceed processors’ margins almost every year, with the exception of the most recent. .
Table: USDA data – historical ratios of producer and feeder margins of cows and calves to processors, including Tyson
Scale enables efficiency, leading to lower prices for American families
Tyson’s scale allows it to operate efficiently, reducing costs to consumers. At Tyson, we rely on independent farmers and want them to be successful because without a stable pipeline of livestock we cannot run our business. In rural communities across America, each year we invest more than $ 15 billion with 11,000 independent farms that provide us with livestock, pigs and chickens.
Tyson Foods is committed to working with the administration, the US Congress and others to find ways to better feed this growing country and keep consumer prices affordable. We welcome a more in-depth discussion on all of the issues raised today.