Tyson CEO Rails Against Ethanol
Cramer’s crusade against ethanol continues. But at least he’s not alone. During Tyson Foods’ latest conference call, CEO Richard Bond had this to say about the so-called alternative fuel:
“It is inefficient because it raises the price on feed stocks to artificially high levels, which increases costs for other uses, such as food. It is inequitable because higher food costs disproportionately affect the people who can least afford it. Essentially, it's a regressive tax on the poor, and not only the poor in America. Ethanol mandates and subsidies along with tariffs on ethanol imports are causing a world food crisis.”
Speaking to Cramer via satellite Thursday, Bond called his statements “the plain truth.” The “unintended consequences” of government-mandated ethanol will be felt “for some time,” the CEO said, until those mandates are changed. Bond also wants to do away with sugar-based ethanol and the tariffs on imported ethanol.
Reducing our dependency on foreign oil is a “very honorable and good thing to do. I have no problem with that whatsoever,” Bond said. “I have no problem with that whatsoever. But I really don’t think that reducing that at the cost of increased, or almost runaway, inflation, from a grain-based food perspective, is the right way to do that.”
Bond did admit that ethanol wasn’t the only reason for rising food costs. The weak dollar and a growing middle class in developing countries also play their part. So even a change in ethanol mandates wouldn’t return food costs to pre-2006 levels, he said.
“I’m in his camp,” Cramer said of Bond. “I’m for Tyson Foods” and its crusade against ethanol.
Questions for Cramer? firstname.lastname@example.org
Questions, comments, suggestions for the Mad Money website? email@example.com