Tyson Foods is the largest producer of meats in the United States , and one of the largest in the world, with $37 billion in sales in 2016. Tyson produces one in five pounds of chicken, beef, and pork in the U.S., and processes approximately 35 million chickens, 125 thousand cows, and 415 thousand pigs per week. In 2016, 3,659 farmers raised chickens for Tyson, 3,764 feeders and ranchers sold them cattle, and 1,975 farmers sold them pigs . Tyson’s supply chain is tremendously large and complex, and is currently exposed to significant risk due to the potential effects of climate change.
Emissions levels of environmentally harmful greenhouse gases (“GHG”) – namely carbon dioxide, methane, and nitrous oxide – are under extreme scrutiny across the globe. The livestock sector is one of the primary culprits; GHG emissions associated with livestock supply chains (e.g., manure, digestion processes, and feedstock production) contribute 14.5% of human-caused GHG releases, trailing only the energy sector . One of the many side effects of a warming planet is an increase in the frequency and severity of extreme weather, including droughts. Climate change increases the odds of worsening droughts in many parts of the U.S. due to drier soil  as well as extended recovery times when droughts do occur .
These dynamics create a challenging environment for Tyson: they are a leading contributor to GHG emissions and climate change, yet face significant financial and operational pressures from its effects. They must find efficient ways to provide sufficient food and water for livestock while also complying with costly emissions initiatives. Extreme weather and drought could lead to increased volatility in the global supply and price of commodities like maize and wheat, both critical inputs for feeding livestock. The 2012 U.S. drought, as an example, carried an associated cost of approximately $30 billion and produced a scarcity of corn that led to increases in global food prices by as much as 10%. Global agriculture is also the world’s largest consumer of fresh water, a scarce resource with increasing competition for access. Rising temperatures may increase animal water consumption by a factor of two to three, and create the need to produce crops and create livestock systems that demand less water or are geographically better situated for cost-efficient access. 
Tyson faces potentially significant, sustained increases in costs due to greater use and scarcity of water and increased pressure on its supply chain, as well as the risk of short-term pricing volatility due to unpredictable weather and severe climatic events. The company has taken several actions to get ahead of these issues:
- In May 2017, Tyson announced a collaboration with World Resources Institute to develop industry-leading GHG targets and water conservation targets for its operations as well as its supply chain. 
- Tyson launched Tyson New Ventures, a venture capital fund with $150 million in capital, to invest in alternative proteins, profitable methods of eliminating food loss, and technologies that drive efficient resource allocation throughout the food chain. Its first investment was a minority stake in Beyond Meat, a producer of soy-based alternatives to meat. Tyson was the first major meat producer to invest in an alternative protein business. 
- Tyson has committed to investing in operating plants that are more efficient in processing meats (e.g., an announced plant in the U.S. Midwest that will lower transportation costs of feed and house “hatch-to-slaughter” operations in one plant). 
It is critical that Tyson identifies emerging risks due to climate change and conducts scenario analyses while improving resource allocation and rationalizing transportation costs. Investing in more efficient plants should have positive near-term results, but establishing emissions targets and executing small venture capital investments have much longer lead times and do not have clear, measurable impact. Tyson’s management should become a partner in providing funding for innovations to increase crop yield, and should also become proactive in finding alternative uses for the waste produced in its operations. Tyson’s business is becoming more expensive, and while they have taken some measures to adapt to change, are they doing enough?
Will the Beyond Meat acquisition alleviate some of Tyson’s increasing operational pressure or is it simply a hedge for changing consumer tastes? Is there a way that Tyson can join the battle in increasing water efficiency in the supply chain, and is it their responsibility to improve the efficiency of their suppliers? Cow manure has become an input for clean energy in some markets – is this a potential revenue stream for Tyson and its suppliers? 
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