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DAVID KRUSE

Demanding cover crops?

November 10, 2017
Farm News

The Iowa Cattlemen's Association says that a number of environmental groups, including the DesMoines Water Works, are reportedly pressuring Tyson Foods to begin demanding that livestock producers use cover crops to be able to sell livestock to Tyson. In other words, it is no longer a free country.

Cover crops are proving popular for some environmental applications. I have land where cover crops are not a necessary application. I think their value overall is exaggerated as a cure all for water quality. We have been testing our tile water for nitrates and they are low. Last summer the tile stopped running altogether during the flash drought. The tile flow just restarted again this fall and when tested, had a very low nitrate level so was not contributing to any degradation of water quality from our farm. Yet in order to sell cattle to Tyson the environmentalists believe that they should deny market access to producers unless a cover crop is used. Harvest is coming out late this year which frankly did not give a lot of time to establish a fall cover crop. These kinds of issues matter little to the activists. Tyson wants "clean labels" and meat producers could be vulnerable to this kind of intimidation.

Not all livestock producers even grow crops. Cattle producers grow hay and grass which is the best cover crop available. Tyson realizes that such a heavy-handed shotgun approach for them to demand use of specific production practices from livestock producers not directly related to their livestock operations is bogus and absurd. But in this era of political correctness these supply chains like Tyson respond carefully to such unrealistic demands. It is not that Tyson and other supply chains do not make requirements of producers in order to participate in their market. They do have rules for livestock husbandry but corn production is second removed and out of Tyson's reach. If these environmental groups had their way, they would demand that producers vote as Democrats in order to sell to Tyson. Where does this stop?

Tyson responded to the groups with this statement:

"August 3, 2017 - We share this group's concern about the environment but disagree with its misleading characterization of our company. Tyson Foods is not in the business of raising the crops and we own very few livestock farms. Instead, we depend on thousands of independent farmers to raise our chickens or sell us their cattle and hogs. We work closely with our partners from farm-to-fork to identify and deploy new technologies designed to better protect the environment, our workforce, and the communities we serve."

Tyson has no obligation to respond to environmental extremists but they do have to listen to share-holders and the extremists come at them from that direction too. According to trici.org, shareholder organization "for the fourth year in a row, Tri-CRI supported the American Baptist Home Mission Society (ABHMS) in filing a resolution asking Tyson Foods to adopt a comprehensive water stewardship policy. This year the resolution was backed by thirteen co-filers including faith based institutional investors, foundations, and asset managers. It will be considered at the company's next Annual Meeting in early 2018. Investors filed this resolution to encourage Tyson to reduce the risks of water pollution from their facilities, their contract farmers, and feed suppliers."

The key word is "encourage". There is nothing wrong with encouraging water stewardship. I would encourage that. Making "demands" under threats however, is something different. Tyson is not the only livestock/meat company responding to the intimidation. Tricon.org also noted "Walmart, Tyson's largest customer with 17.5 percent of 2016 sales, has strict supplier expectations on management of water, manure, nutrients, and fertilizer use. Tyson's competitors are taking action: Smithfield set a target to purchase 75 percent of its grain from farms managed to reduce water pollution; Perdue launched a large-scale poultry litter recycling operation to prevent nutrient pollution; and Hormel adopted a Sustainable Agriculture Policy with commitments on water quality and supply chain management."

The ICA is very concerned about where this is going, taking the position, "If Tyson or other major packers begin mandating certain practices of producers it would be detrimental, especially to smaller feeders. Right now, our approach is to continue to monitor the situation and watch for opportunities to support Tyson's decision, not acquiesce to these demands. We recognize that we have to work against activist groups pressuring end product sellers to require certain production practices back at the farm level."

As Dustin Puhrmann, ICA Feedlot Council Chair, put it, "Our message needs to focus on cattleman being good stewards of the resources that they have to work with and in no way intend harm of the environment and know best how to take care of their livestock and land."

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

 
 

 

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