A closer look at the man behind one of the very worst companies in the world – a company that makes their profits from animal suffering.

Business is good for the slaughterhouses. Consumers might be paying more, ranchers may be earning less, but John Tyson, the billionaire chairman of Tyson Foods, the country’s biggest meatpacker, increased his fortune by $300 million on Monday after his namesake company reported blockbuster earnings while shares soared.

Tyson reported fiscal first-quarter 2022 results on Monday, with revenues nearly doubling to $12.9 billion from the same period last year. The strong results pushed its share price up more than 12{85424e366b324f7465dc80d56c21055464082cc00b76c51558805a981c8fcd63}. The stock surge lifted John Tyson’s net worth to $3.3 billion.

While inflation at 7{85424e366b324f7465dc80d56c21055464082cc00b76c51558805a981c8fcd63} is the highest in 40 years, meat prices have jumped 13{85424e366b324f7465dc80d56c21055464082cc00b76c51558805a981c8fcd63} in just the last month, according to NeilsenIQ, which helped to push Tyson’s quarterly earnings per share up 48{85424e366b324f7465dc80d56c21055464082cc00b76c51558805a981c8fcd63}. Costs for feed and shipping have risen in the swelling tide. Even so, the company’s operating margins, announced Monday, were 11{85424e366b324f7465dc80d56c21055464082cc00b76c51558805a981c8fcd63} in the last fiscal quarter. In the pre-pandemic days of 2019, that number was 6.53{85424e366b324f7465dc80d56c21055464082cc00b76c51558805a981c8fcd63}. Go back ten years and it was 4{85424e366b324f7465dc80d56c21055464082cc00b76c51558805a981c8fcd63}. That means that Tyson is spending less to make more. “The margins were better in every single division,” Goldman Sachs analyst Adam Samuelson told Forbes.

Tyson and other top meatpackers have been called out by the Biden Administration and independent producers for “pandemic profiteering” as unprecedented increases have pushed up the prices that consumers pay for meat while farmers have been paid at rates hovering near historic lows. “They’re cashing in,” said rancher Mike Callicrate, who was part of a class-action lawsuit against Tyson two decades ago over prices paid to producers. “They’re simply managing price. There are going to be times when they overdo it and expose their hand. This has been one of them.”

A Tyson spokesperson denied that the company was taking advantage of its market power. The company said profits are in spite of the cost of goods sold increasing 18{85424e366b324f7465dc80d56c21055464082cc00b76c51558805a981c8fcd63} in the quarter, mainly due to the rising cost of livestock feed, labor and transportation. Its strong performance comes from better execution while attempting to meet the rising demand for meat, Tyson said.

In 1990, each dollar spent by consumers on beef would have been distributed across the food supply chain as 59 cents for the rancher or farmer, 8 cents for the packer and 33 cents for the retailer. In 2020, the farmer earned 37 cents of every dollar spent on beef at retail, a drop of nearly 40{85424e366b324f7465dc80d56c21055464082cc00b76c51558805a981c8fcd63} since 1990, according to the U.S. Department of Agriculture. Slaughterhouses like Tyson retained 18 cents and retailers held on to 44 cents. The trend is similar for chicken and pork.

The consolidation of the meat industry has given more pricing power to companies like Tyson. The biggest consolidation has been in beef, where four companies control 85{85424e366b324f7465dc80d56c21055464082cc00b76c51558805a981c8fcd63} of the U.S. market for fed cattle. Four pork and chicken companies supply 70{85424e366b324f7465dc80d56c21055464082cc00b76c51558805a981c8fcd63} and 54{85424e366b324f7465dc80d56c21055464082cc00b76c51558805a981c8fcd63} of their respective markets.

Top meat processors like Tyson face class-action lawsuits over price-fixing and collusion. In January 2021, Tyson settled a class action over chicken for $221.5 million while denying wrongdoing, but still faces litigation in pork and beef. JBS made the first settlement in the beef case last week, agreeing to pay $52.5 million, while denying wrongdoing.

Original source: https://www.forbes.com