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Roy Graber, staff reporter for WATTAgNet, combines his Midwestern farming background with his knowledge of economics and agriculture policy to offer a deeper look at the poultry and pig industries.
North America / Industry News & Trends / Poultry Welfare

Activist shareholder proposals can jeopardize company

Jamie-Jonker-Animal-Agriculture-Alliance
Jamie Jonker, PhD, vice president of scientific and regulatory affairs, National Milk Producers Federation, cautioned of shareholder activism at the 2018 Animal Agriculture Alliance Stakeholders Summit. | Roy Graber

By buying shares in a company, animal activists can propose resolutions that can harm companies and those with whom they source animal protein products

May 10, 2018

Shareholder activisim is a growing challenge for those in the meat, poultry and dairy industries, and one that isn’t likely to go away anytime soon.

What shareholder activism means is people or organizations with a particular agenda – often tied to animal antibiotic use or beliefs of the animal rights community – will purchase stock in a publicly traded company, making them eligible to draft proposals for potential policy changes that will be voted on at shareholder meetings.

One example happened just several months ago, when opponents of antibiotic use who were Sanderson Farms shareholders drafted a proposal to phase out the use of medically important antibiotics. Sanderson Farms executives have in recent years shared strong opinions stating that judicious antibiotic use is essential in maintaining flock health and also offers other positives, such as environmental benefits, and even advised against voting for the proposal. Those education efforts were successful and the majority of Sanderson Farms shareholders voted no.

But there have been other instances of shareholder activism that could have been even more disruptive, had the resolutions passed.

Investing in a company to shut it down

Recently, when attending the 2018 Animal Agriculture Alliance Stakeholders Summit, I learned of another shareholder proposal that just seemed flat-out outrageous.

Jamie Jonker, PhD, National Milk Producers Federation vice president of scientific and regulatory affairs, said one goal of some activist shareholders is to make sure a certain company does not have the opportunity to sell its meat, poultry or dairy products.

He told of a time several years ago when a major pizza company was faced with a resolution proposed by an animal activist group that called for the company to only source its cheese from naturally polled dairy cattle.

“The problem with that is that is less than 1 percent of the dairy cattle population,” Jonker said.

According to Jonker, this activist group didn’t put up that proposition specifically because it was opposed to the dehorning of cattle. It had more to do with an opposition to animal agriculture in general.

“They put that up because they knew that company couldn’t source it. And if it passed, it would put that company in a very terrible position,” he said.

The pizza company reached out to the dairy industry, which in turn provided the information needed so the company and its shareholders knew passing such a resolution was a bad idea. The measure was not approved.

It seems illogical to invest in a company so you can implement change that would put it out of business, but it does happen. That instance is just one example of the importance of educating the companies that buy your product, and the public in general, about the animal agriculture industry and the good it does.

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