Jan. 9 (Bloomberg) -- Tyson Foods Inc., the second-largest U.S. pork processor, is urging hog farmers to improve the quality of housing for pregnant sows and end the use of blunt force as the main way to kill sick and injured piglets.
“Whether it involves gestation stalls, pens or some other type of housing, we believe future sow housing should allow sows of all sizes to stand, turn around, lie down and stretch their legs,” Springdale, Arkansas-based Tyson said in a Jan. 8 letter to hog suppliers posted on its website today. It will increase audits of sow farms “to help ensure responsible on-farm treatment of animals” and is urging installation of video monitoring to increase oversight.
Tyson gets about 95 percent of the pork it produces from 3,000 independent farmers, with the rest coming from farmers raising company-owned animals. For the sows it owns, many of the changes outlined today must begin or be in place by the end of 2014. Other suppliers are being encouraged to follow the new recommendations.
Tyson, which said last month it supports the right of farmers to choose how to raise animals, is proposing the changes as competitors and customers distance themselves from suppliers using housing that restricts the movement of sows. The Humane Society of the U.S. has been pushing Tyson to join companies such as Smithfield Foods Inc. to help halt the use of gestation crates, which the group says can be about 2 feet (0.6 meters) wide.
The steps Tyson outlines in the letter reflect input from its animal well-being advisory panel, customers, farmers and industry experts and shows its effort to balance consumer expectations with the “realities of today’s hog farming business,” Gary Mickelson, a spokesman, said in a phone interview today.
Tyson rose 2 percent to $34.60 at the close in New York, the highest since it began trading publicly in 1984.
The company asked farmers who manage Tyson-owned sows, female pigs that have had at least one litter, to improve the quality and quantity of space in new or redesigned gestation barns starting this year, according to the letter. Tyson also “strongly” encourages other farmers who sell hogs to the company to improve space for sows.
Tyson isn’t taking a position for or against any particular type of housing, Mickelson said. In a securities filing on Dec. 20, Tyson said it supported the right of independent farmers “to know and choose how to raise animals they supply to us.”
The company is encouraging pork producers to stop the use of manual blunt force to the head as the main method of euthanizing piglets and will fund research to improve pain mitigation for tail docking and castration.
“Producers need workable, credible and affordable solutions for improving animal care,” the National Pork Board said in an e-mailed statement today. Currently, there are no approved drugs for the use of pain mitigation in pig farming and different sow housing systems present advantages and disadvantages, according to the board, which represents U.S. producers.
Smithfield, the world’s largest hog producer, had transitioned 54 percent of pregnant sows on company-owned U.S. farms to group housing as of the end of 2013 and is asking its contractors to convert by 2022, according to a Jan. 7 statement.
“It’s a cost of staying in the game rather than anything that gives anyone an advantage,” Tim Ramey, a Lake Oswego, Oregon-based analyst for D.A. Davidson & Co., said in an interview today. “Long-term, if you were an outlier it would be the wrong place to be.”
Almost 60 of the world’s largest pork buyers such as McDonald’s Corp. and Kroger Co. have adopted policies with deadlines to eliminate pork produced using gestation crates from their supply chains, according to the Humane Society. Nine U.S. states ban confining sows to spaces that don’t allow them to stand up, lie down or extend limbs.
Tyson’s move is among steps that “help its image in the marketplace,” particularly as it tries to increase its sales of prepared foods, Bryan Agbabian, a San Francisco-based sector head for agricultural equities at Allianz Global Investors, said in an interview.
The company’s letter comes after a shareholder proposal that Tyson report on the business risks and impact of gestation crates in its supply chain. The Humane Society has withdrawn the proposal, which the company opposed, for the Jan. 31 meeting, Mickelson said.
Humane Society Chief Executive Officer Wayne Pacelle made an unsuccessful bid to join Tyson’s board in 2012 to try to pressure the company to phase out gestation crates for sows.
“We applaud Tyson for making clear that the current system of immobilizing pigs in crates is not a sustainable future for the pork industry,” Matthew Prescott, food policy director for the Humane Society, said in an e-mail. “We do hope the company will now begin the process of setting timetables and requirements for its producers, but as a first move, this is certainly positive.”
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