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Tyson CEO says ethanol will lead to higher food costs

Thursday, March 27, 2008

(Photo)
Dick Bond, president and CEO of Tyson Foods, spoke to local officials and Tyson workers Wednesday as part of a visit to the Tyson processing plant in Shelbyville.
(T-G Photo by Brian Mosely)
See video of Dick Bond's remarks

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When Dick Bond says that the price of food will soon go up due to increased ethanol production, you'd best listen to him.

He should know: he's the president and CEO of Tyson Foods.

Bond paid a rare visit to the Shelbyville poultry complex Wednesday to tour the facility and meet with plant management as well as officials from around Bedford County.

Tyson has $27 billion in beef, pork and poultry sales each year. The high cost of grain and corn Tyson uses to feed the animals it processes is impacting the company most these days.

"I can rant and rave about this for some time, but some of the things that our government in Washington has done in terms of mandating the use of corn-based ethanol ... it's not right," said Bond.

Corn has gone from $2.50 a bushel up to $5.40 this week, Bond said, and this price jump "hasn't even impacted the consumer yet."

"Chicken prices are up only three or four percent and will have to be up like 20 to 25 percent as we go forward. We already have high fuel prices, now we're going to have higher prices on protein, cereals or any wheat products ... all the commodities will jump dramatically," Bond said.

World food demand is also a major factor, he said. As more and more nations develop, such as China, the demand for poultry and other meats will increase.

"If you put the whole corn crop into ethanol, you are only going to reduce gas consumption about three and a half percent. But if we all inflated our tires correctly, we'd save three percent ... there are other ways to try and pursue the objective of less dependence on foreign oil, but there are a lot of other ways we can do it [that are] more efficient, more effective and have less impact on food and the environment," Bond explained.

The purpose of the meeting was to have an exchange with local leaders to find "if we are good corporate citizens, and what are the things we need to do to be better," he said.

"We appreciate all the community leaders here do for Tyson Foods," Bond said.

After inspecting the plant, Bond said the facility "looked great" and that the workers were producing a "very high quality product.

"As I go through the plant and talk to everybody, there are a number of changes we want to make," Bond explained, "some of which will likely require some additional staffing. There might be some things we do from an automation perspective and we might consolidate some jobs, but overall, the plant looks good.

"People seem happy. They're glad to be at work." Bond said. "The Shelbyville facility is an excellent facility. It's a long term winner for Tyson Foods."

"Communication is the problem and the resolution" to many situations between the company and the community, Bond said. Open dialog is the key to a successful relationship, he said.

Bond stated that the firm provides economic vitality to the region with its employment of 1,200 team members, 1,100 of whom work in the plant. The facility had an annual payroll of $26 million last fiscal year. A total of $19 million went to area poultry growers.

"What's more important to us is how our team members can be more a part of the community, so we want to make sure that our leaders and team members are participating in the community."

Tyson's philosophy is to give back to the communities they're in and even the ones where they might not be located, such as with relief efforts with Hurricane Katrina and hunger relief in other areas, Bond said.

The Shelbyville complex includes contract poultry growers in nine counties in middle Tennessee and one in north Alabama; the processing plant here; a hatchery in Decherd and a feed mill in Estill Springs.

The plant processes about 1.3 million birds a week, producing more than seven million pounds of fresh chicken, including fresh, tray-packed chicken sold in grocery stores as well as de-boned and bone-in chicken and whole birds and marinated specialty products.

Bond said that he foresees more boneless and skinless breasts coming out of the Shelbyville facility in the future. More de-boning capacity will be added in the future, he added.


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