Where Is The Ben & Jerry's Of Meat Processing?
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If you've ever eaten a McNugget (or rotisserie chicken or frozen chicken pot pie from the supermarket), then you've had Tyson chicken. Over several decades, the company grew from a small family business in Arkansas into the biggest chicken company in America. But this is not just a corporate success story. It's the story of how one company pioneered a new business model that would change America's food system, placing the farming class at the mercy of corporations, obliterating competition in the market and reducing the quality of the meat you buy. Sound scary? Read all about it in a new book by Christopher Leonard, The Meat Racket: The Secret Takeover of America's Food Business.
John Tyson founded Tyson Foods in the 1930s. His son, Don, eventually took over and grew the business substantially. The business model they pioneered was vertical integration, which involved investing in every part of chicken production, from the hatchery to the feed mill to the slaughterhouse. The only part of chicken raising Tyson outsourced was, well, chicken raising: the riskiest part of the business. The company delivers baby chicks to contracted farmers who raise them on the feed Tyson provides. The farmers get paid for the chickens that make it to full size; if they get sick birds, they take a loss. Fee structures are set by Tyson with little to no room for negotiation.
"In rural communities, raising meat is still a pillar of the economy," says Leonard. "But this economic path is really being choked out by a few monopolistic companies that totally dominate the industry. Those would be Tyson Foods, Cargill, JBS and Smithfield Foods. Often, farmers don't have a choice of who to deal with. There won't be another meat packer within miles and miles of a meat town."
In the 1970s, nearly 40 companies provided half the chicken Americans consumed. Today, just three companies produce that amount and they control every aspect of production, from egg to vacuum-sealed chicken breast at the grocery store. And it's not just chicken. The pork and cattle industries have also been "chickenized": vertically integrated. Walk into any supermarket meat aisle and it may seem like you have a variety of brand names and products to choose from. But virtually all of them can be traced back to one of the big four meat corporations.
"I'm a business reporter and I love capitalism," Leonard tells me. "That's why I write about this stuff. I love entrepreneurs like Don Tyson, who built Tyson Foods. He truly was a genius. But the reality is that public policy makers allowed these giant meat companies to buy out all their competitors and consolidate to the point where we don't have real competition anymore. That's not Don Tyson's fault.
"Society can play a role in deciding the shape of an industry. Do we want our farmers to live on the edge of bankruptcy? Do we want them to not be able to afford health insurance or even fix things at their house, because their contracts are structured in a way that volatility is shifted to the farm and away from the company?"
Leonard's book reveals just how powerful the meat industry is. The Obama administration, when it came into office, tried to improve the balance of market power held by giant agribusinesses with proposed antitrust reforms. But the meat industry and its lobbyists mounted a well-calibrated (and well-funded) response to kill the reforms. In the end, no meaningful antitrust laws were passed, but one new piece of legislation was: reducing the number of food safety inspectors at poultry plants and increasing companies' ability to police themselves.
It all sounds so insidious, doesn't it? The Meat Racket sets a tone that could be punctuated by the Law & Order "cha-chung." And here's one more reason you, as a consumer, should pay heed. Chicken prices are at record highs right now. Sure, when you adjust for inflation, meat is cheaper today than it was in the 1950s and '60s. But for all the distasteful aspects of industrializing the meat system, consumers should at least be benefiting from cheaper meat. Instead, companies like Tyson are known to temporarily cut back production on chicken farms when prices fall too low in order to raise prices, then increase supply to take advantage of those higher prices.
Of course, for those who can afford to buy hand-raised meat from their local butcher shop or farmer's market, these issues might seem irrelevant. But for most Americans – 90% of meat production is industrialized in this country – supermarket meat and fast-food are the sources of protein they must rely on.
"I think if we could just stimulate more competition and transparency in this market, consumers could start sending their dollars towards products they actually approve of," says Leonard. "Where is the Ben & Jerry's of meat production? Where is the big national-scale producer that's creating higher-quality meat at just a slight premium? We don't see that today and it's because of the anti-competitive practices of the big firms that control the market."
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