August 15, 2013
Shareholders to Tyson Foods: Disclose Risks Associated with Lagging Behind on Animal Welfare
Animal Protection, Financial and Religious Leaders Co-File Shareholder Proposal
Shareholders of Tyson Foods (NYSE:TSN) have submitted a resolution asking that the meat giant disclose the financial and operational risks associated with its use of controversial gestation crates—tiny cages that so severely restrict pigs’ movement, the animals essentially spend their lives unable to even turn around.
The proposal—filed jointly by The Humane Society of the United States and socially-responsible investment firm Green Century Capital Management, and co-filed by the United Methodist Church Benefit Board, Inc. — suggests that Tyson may be in danger of losing market share if the company doesn’t respond to rising customer demand for higher animal welfare standards. It is the latest move in a decade-long effort to modernize the pork industry by seeing it shift from gestation crate confinement to more up-to-date production systems that allow animals greater freedom of movement.
"Rising concerns over these cages have rapidly shifted the marketplace, with dozens of top global food brands—including Tyson customers—demanding change," notes the proposal. "Tyson’s failure to disclose the risks associated with the indefinite inclusion of gestation crates in its supply chain is of concern to shareholders."
Gestation crates have come under fire from veterinarians, animal welfare advocates, legislators, religious leaders, scientists, consumers and food retailers. Nearly 60 of the world’s largest pork buyers—McDonald’s, Burger King, Costco, Oscar Mayer and dozens more—have made commitments to eliminate the crates from their supply chains. Meanwhile, many family farmers have been raising pigs without the use of gestation crates for generations.
Matthew Prescott, the Humane Society of the United States’ food policy director stated: "Gestation crates are cruel, outdated, and unnecessary. Americans simply don’t support locking animals up in cages barely larger than their own bodies and letting them languish for months on end."
"With virtually every leading pork buyer in the nation having publicly committed to eliminating gestation crates from their supply chains, investors are extremely concerned about the implications of Tyson’s refusal to meet its buyers’ needs," said Leslie Samuelrich, Senior Vice President at Green Century Capital Management. "Tyson may be at risk of losing its market if it continues to ignore the changed economic landscape. Investors expect the company to act ethically and demand that it act sensibly."
Tyson’s major competitors have responded to consumer demand and have begun moving away from this practice. Smithfield Foods (the world's largest pork producer) and Hormel Foods (maker of SPAM, and also a leading pork producer) have announced that their company-owned facilities will be gestation crate-free by 2017, and pork producer Cargill is already 50 percent gestation crate-free at its operations. In a 2013 survey by the National Pork Board, 53 percent of pork producers said they do not use gestation crates or plan to stop using them in favor of group housing of sows.
An Iowa State University two-and-a-half year long economic comparison of gestation crates and group housing found that "reproductive performance can be maintained or enhanced in well-managed group housing systems...without increasing labor." Overall, the study concluded that "group housing...resulted in a weaned pig cost that was 11 percent less than the cost of a weaned pig from the individual stall confinement system."
The full text of the shareholder proposal is available upon request.