WEBVTT - Chickenization: An Odd Lots Crossover 0:00:03.120 --> 0:00:08.320 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:10.520 --> 0:00:13.480 Hello and welcome to a very special crossover episode of 0:00:13.520 --> 0:00:18.680 The Money Stuff slash Odd Lots Podcasts. I'm Matt Levien, 0:00:18.720 --> 0:00:20.800 and I write The Money Stuff com for Bloomberg Opinion. 0:00:21.200 --> 0:00:23.599 And I'm Katie Greifeld, a reporter for Bloomberg News and 0:00:23.640 --> 0:00:25.120 an anchor for Bloomberg Television. 0:00:25.640 --> 0:00:28.040 And we have two very special guests in the studio 0:00:28.080 --> 0:00:29.200 with us today, Katie. 0:00:29.520 --> 0:00:34.120 Their names are Joe Wisenthal and Tracy Alloway. Wow, this 0:00:34.240 --> 0:00:35.200 is very exciting. 0:00:36.479 --> 0:00:38.839 I like the pause to build suspense, Kate. 0:00:38.920 --> 0:00:41.920 I've been told to pause and then say names slowly 0:00:42.000 --> 0:00:44.600 for gravitas, so trying it's working. 0:00:44.760 --> 0:00:46.680 It worked, It worked, It worked all right. 0:00:46.920 --> 0:00:49.199 We established in gravitas. 0:00:53.800 --> 0:00:56.120 For what it's worth. Tracy and I like spent three 0:00:56.200 --> 0:00:59.680 years of Odd Lots workshopping ways to introduce guests. And 0:00:59.720 --> 0:01:01.920 I know we're early the second time you've had external guests, 0:01:02.200 --> 0:01:03.440 So don't feel any. 0:01:03.440 --> 0:01:04.320 My heart is counted. 0:01:04.360 --> 0:01:06.600 Don't feel any anxiety about the guest. Do you remember 0:01:06.640 --> 0:01:07.679 how we used to do it, Tracy? 0:01:07.800 --> 0:01:08.000 Yeah. 0:01:08.080 --> 0:01:10.479 We used to pretend that neither of us or one 0:01:10.480 --> 0:01:12.360 of us didn't know what we were going to talk about, 0:01:12.480 --> 0:01:14.559 and it was like, guess what we're going to talk about, 0:01:14.720 --> 0:01:17.200 But it didn't make any sense because like we clearly 0:01:17.280 --> 0:01:18.479 knew what we were going to talk about. 0:01:18.560 --> 0:01:19.479 So it took us a while. 0:01:19.720 --> 0:01:21.680 How are we doing so far? Because I feel like 0:01:21.720 --> 0:01:23.800 it's not going super well, it's going fine. 0:01:24.200 --> 0:01:25.320 What are we going to talk about? 0:01:26.120 --> 0:01:27.560 What someone should make it? 0:01:27.640 --> 0:01:28.800 Flu brought us here? 0:01:29.800 --> 0:01:32.360 Let's talk about chickens. You guys obviously have a lot 0:01:32.360 --> 0:01:36.280 to say. You did a three part series on chickens recently, 0:01:36.360 --> 0:01:39.080 which was pretty cool because I feel like this was 0:01:39.120 --> 0:01:40.520 something different for you guys. 0:01:40.760 --> 0:01:43.080 Yeah, every once in a while we like to shake 0:01:43.120 --> 0:01:45.840 things up and do something slightly different. Last year, we 0:01:45.880 --> 0:01:48.800 actually did a three part series on the rollout of 0:01:48.840 --> 0:01:53.480 New York's legal marijuana OOH market called pot Lots. This 0:01:53.520 --> 0:01:56.400 one was a three part series about chicken, and the 0:01:56.440 --> 0:01:59.160 code name for it was squawk Lots, but the actual 0:01:59.240 --> 0:02:03.560 name was capitalism, and the idea was you can actually 0:02:03.680 --> 0:02:07.120 explain a lot of really interesting themes in the American 0:02:07.160 --> 0:02:09.760 economy through the medium of chicken. 0:02:09.960 --> 0:02:13.600 Yeah, you just think from like egg to chicken sandwich, 0:02:14.000 --> 0:02:17.679 or egg to chicken tender, or egg to mc nugget. 0:02:17.440 --> 0:02:18.560 I mean speak for yourself. 0:02:18.800 --> 0:02:20.920 There are just so many interesting Like the sort of 0:02:20.919 --> 0:02:23.840 premise is, there are just so many really interesting things 0:02:24.320 --> 0:02:27.960 that can be discussed along that entire supply chain. So, 0:02:28.040 --> 0:02:31.400 whether it's avian flu and how to keep the flock 0:02:31.440 --> 0:02:35.440 of the birds, whether it's concentration in the poultry market, 0:02:35.440 --> 0:02:37.720 whether it's the nature of the labor market, how the 0:02:37.720 --> 0:02:42.600 big poultry companies contract with independent growers and so forth 0:02:42.639 --> 0:02:45.880 who out raise the chickens themselves, which is interesting. Then 0:02:45.880 --> 0:02:48.760 there's questions about pricing and so forth, and then commodity prices, 0:02:48.800 --> 0:02:51.799 and then the chicken sandwich wars and the consumer experience 0:02:51.840 --> 0:02:55.680 of why Papa is versus Panda express verse whoever, There's 0:02:55.720 --> 0:02:59.000 a million different things even within all these things where 0:02:59.040 --> 0:03:00.960 it's like we can learn a little something about how 0:03:01.000 --> 0:03:02.640 the economy works through that trajectory. 0:03:03.080 --> 0:03:05.600 How did you decide on that? Was that like you're like, 0:03:05.600 --> 0:03:07.280 we want to talk about chicken first, and then later 0:03:07.320 --> 0:03:09.040 you realize there are a lot of rinses, or you're like, 0:03:09.040 --> 0:03:10.799 we need to talk about anti trust. 0:03:12.200 --> 0:03:12.519 Chicken. 0:03:13.240 --> 0:03:18.400 I actually I'm struggling to remember what the exactmber chickens 0:03:18.440 --> 0:03:21.360 in your backyard. Yeah, I have a long term love 0:03:21.600 --> 0:03:24.400 of chickens, and my great ambition in life is to 0:03:24.480 --> 0:03:28.320 one day have backyard chickens. And I'm inching closer. 0:03:28.040 --> 0:03:30.760 To actually a love of chickens. Do you mean alive 0:03:30.960 --> 0:03:33.440 chickens to hang out with or dead chickens to eat 0:03:33.560 --> 0:03:38.560 or both totally different? Both like one then the other. 0:03:39.120 --> 0:03:41.440 Well, I would raise chickens and I would have eggs, 0:03:41.520 --> 0:03:44.040 and that way I would be immune to egg inflation. 0:03:44.280 --> 0:03:47.360 But I know some people who raise meat chickens, and 0:03:47.520 --> 0:03:49.560 I don't think I would do that so hard. It's 0:03:49.600 --> 0:03:53.720 depressing because meat chickens are very different to egg laying chickens. 0:03:53.840 --> 0:03:56.320 They look different, they don't really do anything. They kind 0:03:56.320 --> 0:03:58.520 of just like waddle around and flop over. 0:03:58.560 --> 0:03:59.560 The one day you kill them. 0:03:59.640 --> 0:04:00.960 Yeah, it's sad. 0:04:01.080 --> 0:04:05.480 The other thing too. In additioned to Tracy's affinity for chickens, 0:04:05.680 --> 0:04:07.760 we've done a lot of chicken episodes in the past. 0:04:07.960 --> 0:04:10.120 So there's this guy, Glenn Hickman, that we talked to. 0:04:10.400 --> 0:04:12.320 We've talked to him twice on the show. He has 0:04:12.360 --> 0:04:15.880 a big egg operation in Arizona, and so we talked 0:04:15.880 --> 0:04:18.200 about when egg prices were surging, we talked to him 0:04:18.400 --> 0:04:22.559 when Avian flew, which unfortunately like is getting headlines again, 0:04:22.760 --> 0:04:25.359 we talked to him. We've talked to Samuel Ryans and 0:04:25.400 --> 0:04:28.000 analysts who thought that Wings stopped the country's biggest chicken 0:04:28.080 --> 0:04:30.560 chain and the biggest single buyer. And there are certain 0:04:30.640 --> 0:04:33.279 lessons about pricing power that we learned because, you know, 0:04:33.320 --> 0:04:36.160 a wholesale Wings went up, they raised the prices aggressively. 0:04:36.360 --> 0:04:38.800 When wholesale Wing prices went down, they did not cut 0:04:38.800 --> 0:04:42.960 their prices. So we've done a lot of chicken related 0:04:43.000 --> 0:04:44.520 content in the past. It's like, oh, why don't we 0:04:44.560 --> 0:04:45.400 like put some of this together. 0:04:45.480 --> 0:04:48.200 This was the surprising thing when we were putting together 0:04:48.400 --> 0:04:50.080 you know, the list of people that we wanted to 0:04:50.120 --> 0:04:53.200 speak to for this series, like eighty percent of them 0:04:53.240 --> 0:04:56.600 we had actually spoken to before, so unknowingly we were 0:04:56.640 --> 0:04:57.920 already a chicken podcast. 0:04:57.920 --> 0:04:58.160 Wow. 0:04:58.320 --> 0:05:00.000 Yeah, it's like it found you guys. 0:05:00.120 --> 0:05:02.800 Yes, when you were putting together that list, where was 0:05:02.920 --> 0:05:08.760 Ray Dahalia? Are you pretending to not know? 0:05:08.960 --> 0:05:11.159 Now? I feel really dumb. 0:05:11.000 --> 0:05:13.440 Because it's like, does he have that huge chicken coop 0:05:14.760 --> 0:05:16.080 London guy? Oh? 0:05:16.279 --> 0:05:16.479 What? 0:05:16.680 --> 0:05:17.040 No? 0:05:17.320 --> 0:05:18.960 I feel like this is too good to be true. 0:05:19.080 --> 0:05:19.960 It's too good. 0:05:19.839 --> 0:05:26.320 To be true. So what's the urban legend. 0:05:26.880 --> 0:05:30.560 Of course, this comes from Ray Dalia, like including on 0:05:30.680 --> 0:05:34.000 podcasts and I think on like the Bridgewater website. When 0:05:34.040 --> 0:05:36.720 he was working on Wall Street before I started Bridgewater, 0:05:36.760 --> 0:05:39.039 he was like doing commodity stuff and one of his 0:05:39.080 --> 0:05:42.719 clients was McDonald's, and McDonald's were I think this is 0:05:42.800 --> 0:05:45.200 like according to your history, Like this is a few 0:05:45.279 --> 0:05:47.880 years after they had like introduced the chicken nugget, but 0:05:47.920 --> 0:05:50.280 before they rolled it out nashally, and they were worried 0:05:50.960 --> 0:05:55.480 apparently about volatility of chicken prices because they're like, wow, 0:05:55.520 --> 0:05:58.240 we can't put chicken nuggets on the menu if the 0:05:58.279 --> 0:05:59.720 price is going to go up and down because they 0:05:59.760 --> 0:06:01.240 have to it off the menu. Were raised the prices, 0:06:01.240 --> 0:06:04.640 it would be terrible. We need to take the volatility 0:06:04.640 --> 0:06:07.599 out of chicken prices. And they came to Ray Dalio 0:06:07.640 --> 0:06:11.479 allegedly and they're like, can you sell us as? And 0:06:11.560 --> 0:06:13.680 Ray Dalio is like, wow, there's not like a liquid 0:06:13.800 --> 0:06:17.640 chicken market at the time. This is I think from 0:06:17.040 --> 0:06:20.960 the Bridgewater website. He argued that since a full grown 0:06:21.040 --> 0:06:23.279 chicken was nothing more than a baby chick plus corn 0:06:23.320 --> 0:06:25.479 and soy mail, the price of the grains or the 0:06:25.520 --> 0:06:28.920 volatile costs and they could hedge corn and soybean prices 0:06:29.000 --> 0:06:32.080 and they could, And so he sold McDonald's a bunch 0:06:32.120 --> 0:06:34.039 of cord and saw derivatives and they were able to 0:06:34.120 --> 0:06:35.160 roll out the chicken McNugget. 0:06:35.279 --> 0:06:35.479 Yeah. 0:06:35.480 --> 0:06:38.159 First of all, I love that Ray Dalio's like chosen 0:06:38.279 --> 0:06:43.000 creationist story for himself. His background legend is I helped 0:06:43.040 --> 0:06:44.400 invent chicken McNuggets. 0:06:44.600 --> 0:06:45.200 That's a good one. 0:06:45.480 --> 0:06:49.440 Secondly, McDonald's did not invent chicken McNuggets, which is something 0:06:49.440 --> 0:06:50.880 that we learned from the podcast. 0:06:51.120 --> 0:06:54.520 McDonald's did not invent the chicken nugget, but Ray Dalio 0:06:54.760 --> 0:06:57.680 shepherded well chicken McNugget as a menu ad of me. 0:06:58.000 --> 0:07:00.279 Sure, okay, fine, we'll let him have that one. But 0:07:00.640 --> 0:07:03.560 the interesting thing is we did learn about volatility in 0:07:03.720 --> 0:07:07.000 pricing because this is something that the Wingstop CEO actually 0:07:07.080 --> 0:07:09.720 brings up. One of the reasons we saw chicken wing 0:07:09.840 --> 0:07:12.920 prices specifically go up so much in the aftermath of 0:07:12.920 --> 0:07:15.360 the pandemic was that it turns out they're the most 0:07:15.440 --> 0:07:16.920 volatile like part. 0:07:16.920 --> 0:07:20.239 Of the chicken can I say, I have a carcharian opinion. 0:07:20.600 --> 0:07:23.560 I think Ray Dalio did invent the chicken McNugget. Anyone 0:07:23.640 --> 0:07:26.280 could invent a fried lump of chicken, it takes a 0:07:26.320 --> 0:07:29.640 true genius to invent the financial hedging instruments that allows 0:07:29.680 --> 0:07:32.520 it to be commercialable. So I now accept the premise 0:07:32.800 --> 0:07:35.960 that actually he and not the person who like put 0:07:36.000 --> 0:07:39.000 the chicken meat in batter should get actually be the 0:07:39.000 --> 0:07:39.440 true father. 0:07:40.200 --> 0:07:43.200 I think that financial engineering underrated. Is that moving forward 0:07:43.240 --> 0:07:45.480 in the real economy like this he did the financial 0:07:45.520 --> 0:07:48.040 engineering behind the chicken. Tracy is shaking her. 0:07:47.920 --> 0:07:50.559 Head, Well, you're right. It got to an interesting question 0:07:50.600 --> 0:07:54.480 about what drives progress. Is there underlying technology or is 0:07:54.480 --> 0:07:54.880 it the. 0:07:54.760 --> 0:08:01.440 Fan first, which came first? The nugget or the financial 0:08:01.440 --> 0:08:04.280 engineer and get to bad rap And it turns out 0:08:04.320 --> 0:08:05.040 if you need that. 0:08:05.240 --> 0:08:07.360 Commercials easy to consume proteins. 0:08:07.440 --> 0:08:10.160 Yeah, I take it. I now give the crown director. 0:08:10.160 --> 0:08:12.520 Do you think that right? Like every every like major innovation, 0:08:12.720 --> 0:08:14.800 like there's the step of physical invention, and then there's 0:08:14.800 --> 0:08:17.520 the step of like working out the financing, and like 0:08:17.560 --> 0:08:25.880 the financing people are generally unheralded but well paid. 0:08:20.040 --> 0:08:25.920 And I think Dahlia is managing. Yeah, but this is 0:08:26.000 --> 0:08:28.360 Joe's pitch to try to get right on the podcast, 0:08:28.400 --> 0:08:30.680 I think to talk about chicken, we. 0:08:30.640 --> 0:08:32.880 Should have him on our podcast to talk about you know, 0:08:33.679 --> 0:08:36.280 who is the New York Mets manager who claimed to 0:08:36.280 --> 0:08:37.680 invent the rap Do you remember that? 0:08:38.200 --> 0:08:39.880 Who is it? You know, the rap sandwich? 0:08:40.160 --> 0:08:40.840 I've heard of it. 0:08:40.960 --> 0:08:44.200 The New York Mets manager in the nineties claim to 0:08:44.280 --> 0:08:47.000 have invented the wrap sandwich. I can't remember his name 0:08:47.200 --> 0:08:48.839 right now. Anyway, it sort of reminds. 0:08:48.559 --> 0:08:50.959 Me have that like claiming to invent the apple pie. 0:08:51.200 --> 0:08:53.960 Like if you just say loudly enough, it's probably true. 0:08:54.280 --> 0:08:56.200 Can we talk about why wings are the most valutile 0:08:56.200 --> 0:08:58.520 part of the chicken? I did not know that. I 0:08:58.520 --> 0:09:01.400 would have thought it was, I guess any other part 0:09:01.440 --> 0:09:02.280 of the chicken. 0:09:02.160 --> 0:09:05.760 From your podcast. I thought it was that the supply 0:09:05.840 --> 0:09:08.840 of chickens is set by the demand for chicken breasts, 0:09:09.080 --> 0:09:11.760 and so for chicken breast goes down, the supply of 0:09:11.800 --> 0:09:15.760 chickens goes down, and wings do not drive the supply 0:09:15.840 --> 0:09:18.679 of chicken. So the wing price is just like thank 0:09:18.720 --> 0:09:19.360 you for listening. 0:09:19.600 --> 0:09:22.240 That's exactly it. You learn something the chicken. 0:09:22.920 --> 0:09:25.319 The chicken breast is like the benchmark from which all 0:09:25.320 --> 0:09:25.760 the other. 0:09:25.640 --> 0:09:28.480 Parts part, and it's like the thing that's most used 0:09:28.480 --> 0:09:31.120 and so like essentially if your wings not, you're buying 0:09:31.120 --> 0:09:34.480 like a sort of like, yeah. 0:09:34.559 --> 0:09:37.960 I like thie by the way, it's more than the breast. 0:09:38.080 --> 0:09:40.400 I think it's like a better it's like the best cut. 0:09:40.480 --> 0:09:44.520 Have you guys had chicken feet? They're really good and 0:09:44.600 --> 0:09:46.880 in Asia people always say they're a really good source 0:09:46.920 --> 0:09:49.760 of collagen. So like a lot of young women or 0:09:50.040 --> 0:09:52.240 women will eat them for skidcare purpose. 0:09:53.320 --> 0:09:55.240 Do you just sort of slather it on your face? 0:09:55.280 --> 0:09:57.240 No? No, you eat it, you like nibble on it. 0:09:57.280 --> 0:09:59.560 Oh man, you can get it at most dim some 0:09:59.640 --> 0:10:02.480 place Chinatown here, So if we ever want to take 0:10:02.520 --> 0:10:05.880 a trip and it's actually I really find them quite delicious. 0:10:05.880 --> 0:10:08.120 I would love to watch you guys eat that. I'm 0:10:08.160 --> 0:10:12.840 not very adventurous myself, but boy do I like being included. 0:10:13.800 --> 0:10:15.720 I have a new puppy, and I get served a 0:10:15.760 --> 0:10:18.400 lot of ads for a lot of food products, and 0:10:18.400 --> 0:10:21.600 there's definitely like an extremely foot looking chicken foot. 0:10:22.880 --> 0:10:26.480 My hat dried chicken hearts, Like that's a little crunch 0:10:26.520 --> 0:10:27.319 of snack. 0:10:28.480 --> 0:10:32.920 You've had some hearts, yeah, I have? Or chicken liver? 0:10:33.080 --> 0:10:35.000 Is that something? Yeah? 0:10:36.600 --> 0:10:39.080 Make a Thanksgiving stuffing out of chicken liver. 0:10:39.120 --> 0:10:40.440 It's really good timely. 0:10:40.720 --> 0:10:44.600 Yeah, we'll provide our recipe for chicken liver Thanksgiving stuffing 0:10:44.640 --> 0:10:46.320 after this podcast, can I say so? 0:10:46.400 --> 0:10:49.720 This is a three part series. The part that caught 0:10:49.800 --> 0:10:52.240 my ears the most was just like the physicality of 0:10:52.280 --> 0:10:55.440 the chicken and how it's changed that the idea that 0:10:55.480 --> 0:10:59.080 like a chicken in the nineteen twenties looks so much 0:10:59.120 --> 0:11:01.800 different than chicken in the twenty twenties. Like I feel 0:11:01.800 --> 0:11:03.360 like I knew that somewhere in the back of my mind, 0:11:03.360 --> 0:11:06.840 but this really brought it into stark focus for me, 0:11:07.160 --> 0:11:09.160 just how much we've changed chickens. 0:11:09.240 --> 0:11:12.199 Yeah, so chickens, like a lot of domesticated animals, are 0:11:12.200 --> 0:11:16.120 like the products of you know, centuries and certainly decades 0:11:16.200 --> 0:11:19.280 of evolution. Chickens, in case you're wondering, I think they 0:11:19.320 --> 0:11:23.440 originally came from forests of Indonesia, and back then they 0:11:23.440 --> 0:11:26.560 were like skinny little jungle birds, and I think they 0:11:26.559 --> 0:11:30.160 were mostly like black. Anyway, they spread around the world. 0:11:30.240 --> 0:11:33.800 It turns out everyone loves chicken. One of the most 0:11:33.920 --> 0:11:37.320 fascinating parts of chicken history. And I don't know why 0:11:37.320 --> 0:11:39.320 I know this, but for some reason, I do is 0:11:39.440 --> 0:11:44.280 In the eighteen fifties there was a chicken bubble. So 0:11:44.320 --> 0:11:48.440 what happened was Queen Victoria got really into chickens, like 0:11:48.559 --> 0:11:52.679 breeding chickens, exotic chickens, and because she was the queen, 0:11:52.960 --> 0:11:54.720 a bunch of other people got into it, and it 0:11:54.800 --> 0:11:57.800 sort of became this fad where people were paying like 0:11:58.040 --> 0:12:01.160 lots and lots of money to get real exotic. 0:12:00.800 --> 0:12:02.280 Chicken, eating them or just breeding. 0:12:02.520 --> 0:12:04.640 They were just breeding them, they were pat game selling 0:12:04.640 --> 0:12:08.560 them to other people. The bubble eventually burst, by the way, 0:12:08.679 --> 0:12:13.280 and the really interesting probably but the really interesting thing 0:12:13.400 --> 0:12:19.200 is because exotic chickens became cheap, Charles Darwin started doing 0:12:19.240 --> 0:12:21.920 research with all these different chickens from around the world 0:12:22.000 --> 0:12:26.840 on evolutions. So the Victorian chicken bubble indirectly influenced our 0:12:26.920 --> 0:12:27.959 understanding of evolution. 0:12:28.120 --> 0:12:32.800 This is like how the telecom bubble and then and 0:12:32.840 --> 0:12:36.480 then yeah, then because of the we had the evolutionary 0:12:36.520 --> 0:12:38.240 theories of Darwin. I didn't know that this didn't come 0:12:38.280 --> 0:12:39.480 up to it on the podcast. 0:12:39.559 --> 0:12:41.199 No, I kind of figure out where to put it. 0:12:41.480 --> 0:12:44.920 I saved it for this podcast. Periectically, there's a really 0:12:44.960 --> 0:12:48.760 funny book that was written sort of contemporaneously with the 0:12:48.840 --> 0:12:51.720 eighteen fifties all about It's called hen Fever, and it's 0:12:51.720 --> 0:12:55.199 about the chicken bubble, and it has the most amazing illustrations, 0:12:55.240 --> 0:12:57.760 including it has this picture of a guy blowing a 0:12:57.760 --> 0:12:59.760 bunch of different bubbles, and some of them are like 0:13:00.120 --> 0:13:03.960 you would expect, like the south Sea expeditions and railway 0:13:03.960 --> 0:13:06.080 stocks and things like that, but then some of them 0:13:06.120 --> 0:13:09.520 are shang his and coachins, which are types of chickens. 0:13:09.559 --> 0:13:12.560 And then there's one that's labeled female novelists. So I 0:13:12.559 --> 0:13:15.559 guess in the eighteen fifties they thought female novelists were 0:13:15.679 --> 0:13:16.920 fat too many. 0:13:18.720 --> 0:13:20.720 Pipe down, by the way, that was my favorite of 0:13:20.760 --> 0:13:23.440 the three. Like every really like the consumer angle. Obviously, 0:13:23.520 --> 0:13:26.319 it's fun to talk about the chicken sandwich warris it's interesting, 0:13:26.400 --> 0:13:28.640 like the market structure and some of the anti trust 0:13:28.720 --> 0:13:31.640 questions and the power. But like I do think like 0:13:31.760 --> 0:13:36.040 one of the great sources of wealth in modern society 0:13:36.200 --> 0:13:40.400 is abundant access to fairly and expensive protein. And the 0:13:40.480 --> 0:13:45.079 story of the chicken getting plumper and plumper, the antibiotics 0:13:45.280 --> 0:13:47.120 that are used to keep them alive and keep them 0:13:47.160 --> 0:13:50.720 growing and avoid sickness, the sort of feeding mechanisms and 0:13:50.760 --> 0:13:52.480 so forth that have turned the sort of scrawny bird 0:13:52.520 --> 0:13:53.920 the trace you was talking to in a sort of 0:13:54.160 --> 0:13:57.160 very tasty bird. Like to me, that's like, that's riveting, 0:13:57.240 --> 0:14:01.880 that's exciting. That's progress, right, futures to make it more yeah, right, 0:14:01.880 --> 0:14:04.320 and the soybet futures, which of course are crucial, which 0:14:04.320 --> 0:14:06.480 we really like. That's the thing we could have done, Like, 0:14:06.520 --> 0:14:10.000 because chicken is so good, we could have done episodes 0:14:10.040 --> 0:14:13.480 on feed futures. Because chicken is just so inherently connected 0:14:13.480 --> 0:14:14.080 to everything else. 0:14:14.120 --> 0:14:16.800 This could have been like a twelve part series easily. 0:14:16.960 --> 0:14:18.520 I think I was gonna say, you've got to get 0:14:18.559 --> 0:14:19.240 Raydally on. 0:14:19.600 --> 0:14:23.880 Yeah, well in a book more Victorian chicken bubble, the 0:14:23.960 --> 0:14:30.040 grain market that underpins chicken nuggets. 0:14:41.680 --> 0:14:44.000 Wait, I one time with the market structure. Yeah, there's 0:14:44.000 --> 0:14:46.400 an episode and essentially like how chicken is like uber 0:14:46.520 --> 0:14:50.080 where yeah, like the farmers who farm the chickens don't 0:14:50.080 --> 0:14:54.720 own the chickens. They're outsourced from like these big they 0:14:54.760 --> 0:14:57.400 call them integrators, like Tyson and Perdue, where they like 0:14:57.880 --> 0:15:02.120 the integrators deliver hours old chicks to the farmers. The 0:15:02.160 --> 0:15:04.640 farmers take care of them for a couple of weeks, 0:15:04.880 --> 0:15:07.360 and then the integrators take them back and turn them 0:15:07.360 --> 0:15:08.640 into chicken nuggets. 0:15:09.000 --> 0:15:11.520 Why is it like that, That's a really good question. 0:15:11.600 --> 0:15:14.480 I think it's just like an outcrop of the way 0:15:14.520 --> 0:15:17.000 the chicken industry evolved. By the way, I have an 0:15:17.200 --> 0:15:20.120 interesting fact if you don't know, chickens can still be 0:15:20.200 --> 0:15:23.280 sent live through the US mail, So you can live 0:15:23.440 --> 0:15:26.840 order baby chikes. No, but I don't really want to. 0:15:26.960 --> 0:15:30.160 I would rather go to like a local agriculture tractor 0:15:30.200 --> 0:15:33.240 and get yeah, exactly. But anyway, so the way it 0:15:33.280 --> 0:15:36.440 worked is in the sort of nineteen twenties nineteen thirties, 0:15:36.720 --> 0:15:40.520 we started getting these big broiler houses. So people discovered 0:15:40.600 --> 0:15:43.720 this is actually one of Joe's favorite stories. The woman 0:15:43.760 --> 0:15:44.360 in Delaware. 0:15:44.440 --> 0:15:46.400 Well, yeah, there was a woman in Delaware who had 0:15:46.400 --> 0:15:50.120 a great names to Seal Long Steal, and she ordered 0:15:50.160 --> 0:15:52.120 what she ordered one hundred chickens. 0:15:51.760 --> 0:15:53.280 And ever it was like ten chicks. 0:15:53.400 --> 0:15:56.000 She ordered like ten chicks in the mail and accidentally 0:15:56.080 --> 0:15:57.960 ordered a thousand. So she's like, all right, I guess 0:15:57.960 --> 0:15:58.640 I'm gonna become. 0:15:58.480 --> 0:15:59.920 A farm that never happens to me. 0:16:00.400 --> 0:16:02.680 No, it doesn't happen to me either. The point about 0:16:02.720 --> 0:16:05.720 uber and so then people get into the farming, they're like, oh, 0:16:05.920 --> 0:16:08.200 I like the idea of farming, and it doesn't seem 0:16:08.240 --> 0:16:10.560 that bad to be a chicken farmer. But like they're 0:16:10.640 --> 0:16:15.280 extremely highly constrained. The integrators they deliver them the chickens, 0:16:15.440 --> 0:16:19.120 They tell them the exact specifications of the barn, the temperature, 0:16:19.280 --> 0:16:22.640 the feed, how much feed, and so forth, and then 0:16:22.840 --> 0:16:25.560 they compete against each other in what's called the tournament system. 0:16:25.720 --> 0:16:28.640 Yeah, so you as the farmer, are actually responsible for 0:16:28.760 --> 0:16:31.720 a lot of the capital investments that are needed to 0:16:31.960 --> 0:16:37.479 raise chickens. Meanwhile, the big integrators like a Tyson or Purdue, 0:16:37.760 --> 0:16:40.720 they provide a lot of the inputs. So the baby 0:16:40.760 --> 0:16:43.920 chicks themselves. They'll tell you what medicines to use, what 0:16:44.080 --> 0:16:47.120 kind of food, and so in the eyes of the farmers, 0:16:47.200 --> 0:16:49.640 they feel like they are absorbing a lot of the 0:16:49.640 --> 0:16:52.160 big risks here while not really having a lot of 0:16:52.200 --> 0:16:56.200 control over stuff that ultimately affects the end product. 0:16:56.440 --> 0:16:59.280 And then the tournament is you have this pool of 0:16:59.320 --> 0:17:03.160 farmers in an area, and your pay for some period 0:17:03.520 --> 0:17:07.800 is how far above or below the average of that pool. 0:17:08.000 --> 0:17:09.520 Yeah, you're pitted against each other. 0:17:09.520 --> 0:17:11.920 You pitted against each other. There's like a fixed pot 0:17:12.200 --> 0:17:15.320 and then each round, you know, some people had the 0:17:15.320 --> 0:17:17.919 best chick OUs or the heaviest chickens or whatever it is, 0:17:18.280 --> 0:17:20.320 and some had the worst and so forth. And so 0:17:20.600 --> 0:17:24.720 it's very constrained type of farming. If you imagine farming 0:17:24.760 --> 0:17:28.080 in Iowa in some idyllic sense, which I think some 0:17:28.119 --> 0:17:30.040 people still do, but I think we also know it's 0:17:30.040 --> 0:17:32.560 big in dushow business, it's not that vision. 0:17:32.800 --> 0:17:36.000 Yeah, it's sort of like retailers like not there, they're 0:17:36.040 --> 0:17:38.399 real estate. It's like it's like weird that like the 0:17:38.880 --> 0:17:42.240 capital requirement comes from the you know, individual small farmers 0:17:42.240 --> 0:17:45.440 and like these big companies are making the capital investments. 0:17:45.520 --> 0:17:49.119 It seems to be a super beneficial way of structuring 0:17:49.160 --> 0:17:51.960 their business for the big companies, right, you could see 0:17:52.000 --> 0:17:55.400 why they like it. And by the way, like that light, yeah, 0:17:55.560 --> 0:17:58.359 that's exactly it. And they will argue that like actually 0:17:58.760 --> 0:18:01.840 providing the initial round of chicks and the food and 0:18:01.880 --> 0:18:04.920 the medicine is like a big cost center and they 0:18:04.960 --> 0:18:07.760 are taking that on. But again, like all the farmers 0:18:07.800 --> 0:18:09.840 we spoke to had pretty similar complaints. 0:18:09.880 --> 0:18:11.880 Right, It's not like uber, it's not like literally they're 0:18:11.920 --> 0:18:14.159 just like you know, like a matching app like they 0:18:14.200 --> 0:18:14.760 have a lot of. 0:18:14.840 --> 0:18:17.359 Yeah, that's right, that's right. But you know sometimes like 0:18:17.359 --> 0:18:19.440 when Uber is like you could like be an entrepreneur, 0:18:19.520 --> 0:18:21.200 you know, like they pitch it that, but in the end, 0:18:21.680 --> 0:18:25.280 the rules of the business are heavily constrained and it's 0:18:25.320 --> 0:18:27.800 all within the context of Uber and policy changes that 0:18:27.880 --> 0:18:31.119 Uber can make, et cetera. It's similar to that in 0:18:31.160 --> 0:18:33.520 that there's a cap on one's ability to be sort 0:18:33.560 --> 0:18:36.320 of like actually a business owner. The sentence like even 0:18:36.359 --> 0:18:37.440 how constrained. 0:18:36.960 --> 0:18:39.320 It is, Oh, you can be a farmer, you can like, yeah, farm, 0:18:39.359 --> 0:18:41.439 but it's like no, really, you're just like following their orders. 0:18:41.760 --> 0:18:45.600 Speaking of Uber, it also gets to something else in 0:18:45.640 --> 0:18:48.920 the modern US economy, which is sort of the prevalence 0:18:49.119 --> 0:18:52.040 of the middleman and the power that they wield over 0:18:52.080 --> 0:18:57.439 the economy. So Uber basically matches passengers with drivers, and 0:18:57.480 --> 0:19:00.199 it makes a lot of money from doing that. If 0:19:00.200 --> 0:19:03.080 you look at the farming industry, for every dollar that 0:19:03.160 --> 0:19:06.760 comes out of agriculture, farmers get like twenty cents. The 0:19:06.840 --> 0:19:10.080 other eighty cents is going to someone else, and a 0:19:10.200 --> 0:19:13.040 lot of the someone else turns out to be middleman, 0:19:13.240 --> 0:19:16.639 like the you know, the distribution networks, the integrators in 0:19:16.680 --> 0:19:18.919