By ROD WALTON Tulsa World Staff Writer 1/18/2008

Thanks to rising energy and grain costs, higher food prices are probably here to stay, an executive from the world's largest processor of beef, chicken and pork said Thursday at the University of Tulsa.

Yet Tyson Foods Inc. Chief Financial Officer Wade Miquelon believes that companies like his can turn the tables somewhat by finding greater uses for its byproducts, including turning animal fat into fuel.

"What we're finding out in the end is that it's all connected," Miquelon said during his TU Friends of Finance speech at the Allen Chapman Activity Center. "Growth is always an imperative," he added, "but growth is never easy to do."

Tyson may incur an additional $600 million or more in feed costs during the next fiscal year, he noted. The Springdale, Ark.-based food giant is on the rebound -- record sales of $27 billion were reported for 2007 after the company lost close to $150 million in fiscal 2006.

Two-thirds of Tyson's costs for raising chickens are tied up in feed. These types of inflationary pressures cannot help but find their way to consumer prices, Miquelon said. "We've got to find solutions," the CFO said after his speech. "There's no margin to absorb it."

Tyson, founded in 1936, has grown exponentially over the decades. Its biggest challenges have come in recent years -- from bird-flu outbreaks, scares over mad cow disease, soaring fuel expenses and higher corn costs due to increased ethanol production.

The company apparently wants to fight fire with fire, so to speak. During the past year, Tyson has partnered with ConocoPhillips and Tulsa-based Syntroleum Corp. in separate ventures to use animal fats in producing biofuels.

"We know a lot about fats; we don't know a lot about energy," Miquelon admitted. "You've got to have partners."


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