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ConAgra Sees Growth Amid Slump

CEO expects hot market for health-conscious foods, defends charges of windfall profits. INTERVIEW

By Scott PendletonStaff writer of The Christian Science Monitor / April 15, 1991



CHICAGO

CHARLES M. HARPER, Mike to his friends, was honored this month by the University of Chicago Graduate School of Business as its 1991 distinguished alumnus. Looking at ConAgra Inc., of which Mr. Harper has served as chairman since 1981, it's not hard to see why. The food and agribusiness colossus based in Omaha, Neb., was nearly bankrupt when Harper joined it as chief operating officer in 1974.

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This year, he says, sales will reach $20 billion. Despite the recession, Harper adds, things ``certainly looks good'' for ConAgra's 1991 fiscal year, which ends in May, to be the 16th in a row for meeting tough financial objectives:

At least 15 percent per year after-tax return on year-beginning common shareholder's equity, with a multiyear average exceeding 20 percent. Last year's result was 24.3 percent

Earnings per share in excess of a 14 percent growth trend line from a 1973 base. Earnings grew 17 percent last year.

Last year ConAgra also ranked 12th among Fortune 500 companies in 10-year average annual returns to investors, at 35 percent.

The food and agribusiness arenas can be as controversial and competitive as they are profitable. In an interview, Harper shared his views on several of issues.

Farmers complain that the price they are paid for wheat is a fraction of the retail price of bread.

Dairymen have also seen milk prices decline by 30 percent in a year, even as retail cheese prices rose. That prompted Senate Agriculture Committee chairman Patrick Leahy (D) of Vermont last month to call for a federal investigation of ``windfall profits.'' Kraft General Foods, a ConAgra competitor, denied the charge but early this month cut its cheese prices 17 cents per pound.

Harper, of course, pleaded ignorance about Kraft's situation. As for ConAgra, ``our cheese pricing has gone up and down with the price of milk.''

Harper said he thought that farmers receive a fair price for their produce, based on the functioning of supply and demand laws taught in Economics 101. ``If consumers want to go out to the farm and get the corn, they can do that. If they want it delivered to their supermarket shelf, and properly preserved and packaged, then they'll do that. As far as I know, there are no monopolies in the food business yet, and if there are they should be broken up.''

The critical issue for the food business, Harper said, is getting industry and government to work together rather than be antagonists. ``The Japanese, when they go after market share, their government, their financial institutions, their labor, their management, businesses, gang up on it. They work together. Not us.''

``We've got example after example of Big Brother looking over your shoulder, instead of holding people accountable with very clear rules,'' Harper says.

One of ConAgra's subsidiaries, Monfort, is a meatpacking company. Rep. Tom Lantos (D) of California recently labeled that industry a ``disgrace'' because of work-related health problems. A former Monfort employee testified to a subcommittee headed by Lantos that a company supervisor consistently placed her in repetitive-motion jobs, despite contrary instructions from the company doctor.

``Our people have hired full-time PhD's in this area,'' Harper says. ``They conduct training programs. They conduct exercise programs prior to the start of shifts, they move people around, have a pretty good program, and we're still learning.