June 16, 2008

Tyson Foods Biofuels Hypocrisy

Tyson FoodsThe opponents of ethanol argue that even though most of the corn from which ethanol is made isn't eaten directly by humans, that diverting corn to ethanol creates higher meat, egg, and diary prices by making livestock feed more costly.

Tyson Foods has been one of the most outspoken opponents of ethanol over the last couple of years. Tyson CEO Richard Bond recently had this to say about ethanol.

It is inefficient because it raises the price on feed stocks to artificially high levels, which increases costs for other uses, such as food.

But Tyson isn't against all biofuels. In fact they have their own renewable fuels division and about a year ago partnered with ConocoPhillips and Syntroleum to produce biodiesel from the animal fat the company produces.

The Springdale, Ark., company plans to convert its fatty byproducts, known as tallow, into fuel. Tyson has struck deals with oil giant ConocoPhillips and Syntroleum, a tiny company that develops synthetic-fuel technology, to process millions of gallons of animal grease each year.

The article also states that about a third of all the animal fat produced in this country flows from Tyson slaughterhouses. So the partnerships that Tyson has formed could potentially lead to the production of millions of gallons of biodiesel while at the same adding value to tallow.

This is a huge advantage over other renewable fuels, like ethanol, that require large capital outlays," says Ramey, who expects tallow prices "to rise significantly, just as the price of corn rose in response to demand for ethanol.

But there is a drawback.

Ramey says that biodiesel adds a higher value use for tallow, which has been used to make other products, such as soap and livestock feed.

So in their quest to produce biodiesel from tallow, they are removing a component of livestock feed from the food supply and increasing the cost of tallow and the cost of livestock feed. In other words they are doing the same thing that they have been criticizing ethanol for.

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