September 13, 2021


Tyson Foods rejects conclusions drawn by US Secretary of Agriculture



Tyson Foods categorically rejects the conclusions drawn on September 8 by the US Secretary of Agriculture and the Director of the National Economic Council in a White House press briefing.


The United States Department of Agriculture recently published a report detailing the drivers of consumer inflation in the food sector, none of which are related to industry consolidation or scale, according to Tyson.


In its explanation to the US Senate Committee on the Judiciary in testimony provided in August 2021, Tyson said that the increase in the price of beef, in particular, is due to unprecedented market conditions.


Multiple, unprecedented market shocks, including the COVID-19 pandemic and severe weather conditions, led to an unexpected and drastic drop in meat processors' abilities to operate at full capacity. This led to an oversupply of live cattle and an undersupply of beef, while demand for beef products was at an all-time high. As a result, the price for cattle fell, while the price for beef rose. Today, prices paid to cattle producers are rising, according to Tyson.


Labor shortages – the inability of the industry to adequately staff its plants – has exacerbated the situation. Labor shortages are also affecting the United States' pork and poultry supply.


The company asserted that it is inaccurate to suggest that consolidation in the meat processing industry is leading to higher prices for consumers. In fact, evidence of healthy competition can also be found by looking at historical outcomes, the company added. For example, there is a rise in availability and quality of beef, while the price has become more affordable over the past quarter-century. Data shows that while the concentration of the industry has remained relatively constant for close to 30 years, quality has significantly improved.


Based on data by the USDA, Tyson highlighted that the historical ratios of margins of cow and calf producers and feeders versus processors, including Tyson, show that cow and calf and feeder margins outpace processor margins in almost every year except the most recent.


Tyson's scale allows it to operate efficiently, which keeps costs down for consumers, the company noted. It said that it rely on independent farmers and want them to succeed, as without a steady pipeline of livestock, its business cannot be operated properly.


In rural communities across the US every year, Tyson invests more than US$15 billion with 11,000 independent farms supplying the company with cattle, hogs and chickens.


Tyson stated that it is committed to working with the Joe Biden Administration, the US Congress and others to find ways to better feed the US and keep consumer prices affordable.


- Tyson Foods

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