I don’t know about your house, but the Meyer household will be eating Domino’s pizza for the foreseeable future -- if not for the pizza (which is pretty good), then to reward the courage shown by Domino’s shareholders in rejecting a “request to study ending the use of pork from suppliers who confine pregnant pigs in crates.” The shareholders’ decision wasn’t a questionable one as 80% voted against the “request” and only 4% supported it. Sixteen percent of votes abstained. The company’s board of directors had also recommended that the request be rejected, saying that the issue should be settled between the company and producers and processors.
While the issue was brought up as a “request” by the Humane Society of the United States (HSUS) through its position as a shareholder in Domino’s, it will now be interesting to see just how much of a “request” it was and how they will handle this rejection. HSUS claimed it was happy with the vote, stating: “ . . . it’s remarkable that 4% of Domino’s shareholders felt so strongly about this issue that they’re willing to vote in favor of this resolution,” according to a published report on www.AnnArbor.com. I could find no comment on the HSUS Web site.
Talk about spin. How can you claim 4% to be satisfying? The same article points out that getting 3% means it will be brought up again next year and quotes a HSUS source as saying, “By next year, Domino’s management will be hard-pressed to continue to ignore this.”
It will be very interesting to see just how HSUS hard-presses Domino’s management. Will there be just another request? To my knowledge, this is the first target of any size to say no to HSUS’s “request”. Saying no to People for the Ethical Treatment of Animals (PETA) used to get a guy in a carrot planted in front of your store. Saying no to the Animal Liberation Front allegedly caused some buildings and equipment to burn. What will happen to Domino’s since they have said no to HSUS?
My impression of HSUS is that they are far more intelligent than either of the other two organizations mentioned above. This pressure will be far more subtle, but it will be pressure nonetheless with very likely serious economic consequences. If that pressure, in fact, comes through Domino’s customers, then so be it. Customers have the right to choose what they buy and can use any reason they are willing to pay for to make that decision. But if the pressure does not come from and through customers, then another serious corner has been turned.
It is, of course, quite possible that McDonald’s, which has yet to make a decision regarding gestation stalls but has requested suppliers submit a plan for their elimination, Burger King, Wendy’s and others are making these decisions out of true, even if they are misguided, concerns over the welfare of animals. It is equally possible that they are making the decisions out of fear that their valuable brands will be smeared in retaliation for not going along with HSUS’s “requests”. No one knows what that fallout will be, but we will finally find out now that Domino’s has had the courage to say no. I really hope I’m wrong, but it may be a tough year for Domino’s and their management team. The HSUS team needs to know that people are indeed watching.
Hog Supplies Edge Upward
Hog markets continued to struggle last week and the problem, at least right now, appears to be supplies. Slaughter was 4% higher than last year. Weights were 1% higher. The result was 4.9% (some rounding error at USDA, it appears) more pork and the cutout was down 14.1%, while the Iowa-Minn. base price was down 13.2%. Those multiples are reasonable with higher supplies and a steady demand environment at the wholesale and farm levels. Canada’s output was up even more (6.6%) relative to last year.
The holes supposedly created by last summer’s heat and porcine reproductive and respiratory syndrome (PRRS) flare-ups should be here, but we seem to be going the other way. That could be due to exceptional performance this winter and spring, meaning that the hog shortages are still ahead. But I’m still not crawling out on that limb. History says it is a very shaky one, so I’m staying with my forecasts based on March’s Hogs and Pigs report (Figure 1). The errors have certainly not been sufficient to expect fewer pigs. If one was to conclude anything at this point, it would be that there may be more pigs out there than we thought. That’s not good, even with summer coming.