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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Joe, why did the chicken join the Revolutionary War? I

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Speaker 2: have no idea, because it didn't want to be cooped

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Speaker 2: up under British rule.

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Speaker 3: Okay, but it sitting aside the terrible puns. Wasn't it

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Speaker 3: really about taxes?

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Speaker 4: Joe?

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Speaker 2: Joe? Why did the colonial chicken refuse to pay British

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Speaker 2: taxes because it didn't want to put all its eggs

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Speaker 2: in King George's basket?

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Speaker 5: Should I keep going?

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Speaker 3: I'm good, I'm good, Thanks, I'm good, Okay.

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Speaker 2: Fine. To understand chicken and the current landscape of the

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Speaker 2: US economy and the companies in it, it helps to

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Speaker 2: go back in time and revisit a few key moments

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Speaker 2: in US history.

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Speaker 6: Going back to the founding, Americans were actually suspicious of

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Speaker 6: the power of large corporations. And one reason for that

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Speaker 6: is that it used to be that the government would

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Speaker 6: grant corporate charters.

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Speaker 7: Right.

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Speaker 6: There's this history in the United States before general and

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Speaker 6: corporation statutes that corporations are really creatures of the state,

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Speaker 6: and so there was always this suspicion that if they

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Speaker 6: grew to be too powerful, the kind of abuse that

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Speaker 6: they could bring to bear on the lives of ordinary

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Speaker 6: people was really extensive.

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Speaker 2: And so Doha Mecki is the Principal Deputy Assistant General

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Speaker 2: in the Anti Trust Division of the Department of Justice.

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Speaker 2: That's a long title. It means she's the second highest

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Speaker 2: ranking official there.

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Speaker 3: Today. The US government has a whole constellation of laws, acts,

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Speaker 3: and agencies all aimed at ensuring that America's economy remains

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Speaker 3: fair and competitive. One of the most important is where

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Speaker 3: Doha works.

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Speaker 6: The DOJ, and the Anti Trust Division is one component

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Speaker 6: of many at the Justice Department. And our specific mandate

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Speaker 6: is to enforce the anti trust laws and essentially to

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Speaker 6: guarantee and vindicate the economic liberty of all Americans. And

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Speaker 6: we do that by enforcing the federal and he trust laws,

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Speaker 6: the best known of which are the Sherman Act and

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Speaker 6: the Clayton Act, but you've.

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Speaker 2: Probably heard of these before. The Sherman Anti Trust Act

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Speaker 2: of eighteen ninety was famously deployed in the breakup of

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Speaker 2: Standard Oil back in nineteen eleven, which is still probably

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Speaker 2: the country's most well known anti trust case, and the

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Speaker 2: Clayton Act arrived soon after that. But America's approach to

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Speaker 2: antitrust has constantly changed over time, and.

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Speaker 3: Chicken, with all its accusations of price gouging and unfair

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Speaker 3: labor practices and just huge corporate concentration, seems to be

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Speaker 3: a perfect poultry. Peatrie dish to experiment with some new

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Speaker 3: ways of looking at antitrust.

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Speaker 2: Welcome to Part three of Beak Capitalism, our ongoing exploration

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Speaker 2: of the US economy through the medium of Chicken. In

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Speaker 2: this episode, we're asking how we can solve some of

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Speaker 2: the problems that Big Chicken creates. Can we actually uncluck

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Speaker 2: the system?

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Speaker 7: So a little bit of history. Actually, the relationship between

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Speaker 7: agriculture and anti trust goes back to the beginning. Farmers

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Speaker 7: were one of the big supporters of the Sherman Act,

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Speaker 7: the first anti trust statue passed by Congress.

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Speaker 3: Michael Cati's is Deputy Assistant Attorney General for the Anti

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Speaker 3: Trust Division at the DOJ. He works alongside Doha, but

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Speaker 3: recently he spent a lot of time focused on agriculture

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Speaker 3: and Act because it turns out the DOJ has a

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Speaker 3: long history with the food industry.

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Speaker 7: And early on the Department of Justice brought a number

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Speaker 7: of cases against meat packers and along about nineteen fourteen,

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Speaker 7: Congress looked at the way the Supreme Court was handling

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Speaker 7: that Act and was not happy. So they passed the

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Speaker 7: Clayton Act, which was supposed to broadened the enforcement powers

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Speaker 7: of the Division. They also created the Federal Trade Commission, and.

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Speaker 2: The first thing the President asked the newly created Federal

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Speaker 2: Trade Commission to do was study the meat packing industry.

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Speaker 7: Fast forward to nineteen twenty, the FTC issues a three

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Speaker 7: volume report documenting everything going wrong in meat packing markets,

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Speaker 7: both collusion and deception, and at the same time, the

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Speaker 7: Justice Department files an anti trust case that breaks up

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Speaker 7: the packing industry. And yet Congress still wasn't happy. So

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Speaker 7: then in nineteen twenty one, Congress, now under a strong

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Speaker 7: Republican and a fairly conservative Congress, passes the Packers and

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Speaker 7: Stockyards Act, which really said, look, we are concerned that

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Speaker 7: the people who ranch and grow hogs are always going

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Speaker 7: to be facing very large, powerful interests, and we want

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Speaker 7: to give them extra protections. And so was the anti

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Speaker 7: trust laws focus solely on competition. The Packers in stock

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Speaker 7: Guards Act actually provided explicit protection for ranchers, hot growers,

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Speaker 7: eventually chicken growers from deception on fairness discrimination, you're.

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Speaker 3: Going to want to remember the Packers in Stockgards Act.

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Speaker 3: It's been deployed quite a bit lately in the name

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Speaker 3: of anti trust enforcement in agriculture and chickens especially.

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Speaker 2: But chicken also says something about fairness in business more generally.

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Speaker 6: There are many lessons to be drawn from anti trust

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Speaker 6: enforcement in the chicken industry that I think have made

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Speaker 6: us better enforcers and that have really brought into focus

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Speaker 6: the expansiveness of our mission. Again, anti trust is a

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Speaker 6: big mandate. It rhymes with a lot of core democratic

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Speaker 6: values that all of us hold as citizens of this country.

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Speaker 6: And so to bring that down to the level of

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Speaker 6: enforcement anti trust enforcement at the market level. What we

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Speaker 6: see in the chicken industry is that this outsourcing of

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Speaker 6: risk is actually a business model that many kinds of

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Speaker 6: companies employee. For example, a ride sharing company right that

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Speaker 6: outsources risk investment and recoups a lot of the profit

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Speaker 6: for simply matching writers and passengers.

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Speaker 5: For example.

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Speaker 6: There are other examples in the real estate industry, in

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Speaker 6: banking again where you see this sort of outsourcing of risk,

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Speaker 6: and it raises fundamental questions about how those markets are functioning,

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Speaker 6: whether consumers are ultimately getting the kind of choices, good value, innovation,

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Speaker 6: and other things that we really lean on the antitrust

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Speaker 6: laws to deliver.

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Speaker 3: All of this raises the question of what exactly we

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Speaker 3: mean by anti trust and what exactly is anti competitive behavior.

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Speaker 2: Yeah, we should talk about that because for years, competition

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Speaker 2: was judged on the basis of a consumer welfare standard.

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Speaker 2: What that means was, for example, if two companies decided

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Speaker 2: to merge and prices for consumers ended up being lower

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Speaker 2: as a result, then that was generally fine. Monopoly was

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Speaker 2: only a really bad thing if it led to higher prices, right.

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Speaker 3: Because pretty much everyone likes cheap chicken, and at a minimum,

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Speaker 3: you could argue that concentration in the poultry industry and

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Speaker 3: industrialization of chicken and all the scale that comes with

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Speaker 3: it has created a lot more white meat to go around.

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Speaker 2: But in recent years, policymaker's approach to anti competitive behavior

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Speaker 2: has started to change a lot. Not only are they

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Speaker 2: looking beyond simple chicken supply, but they're also arguing that

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Speaker 2: it's not clear that all of this is leading to

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Speaker 2: better outcomes for consumers either.

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Speaker 7: One of the problems in anti trust enforcement generally is

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Speaker 7: people said, well, you know, if you have power on

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Speaker 7: the buying side that just will get passed down the

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Speaker 7: line to the ultimate consumers. That's actually wrong, right. The

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Speaker 7: concern here is if the middle person has the power,

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Speaker 7: they're going to extract taxes up and down the line.

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Speaker 7: And it's not the case that you would expect somebody

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Speaker 7: if there are forcing prices down through any competitive means,

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Speaker 7: that they're going to pass that along. And just as

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Speaker 7: a sort of general example, think about it this way.

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Speaker 7: The way you exert monopoly power on the buying side,

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Speaker 7: which we call monopsony power, right, is you actually buy less,

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Speaker 7: so you're reducing demand so that prices go low. Well,

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Speaker 7: if they're buying less, they're selling less, and so that

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Speaker 7: can't help consumers. Consumers want more supply, more competition, So

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Speaker 7: either it has sort of no effect downstream, or it

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Speaker 7: actually contributes to higher prices. So when we go after

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Speaker 7: monopsony power in the agricultural industry and are successful, it

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Speaker 7: benefits both and often the consumer.

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Speaker 2: Joe ring the monopsony clackson monopsony.

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Speaker 3: It comes up a lot nowadays. To put it simply,

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Speaker 3: it's basically a market structure where there's only one big buyer,

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Speaker 3: whether that's of labor widgets, whatever.

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Speaker 2: So if you're a chicken farmer in Rhode Island, for instance,

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Speaker 2: there might be just one poultry processor that you can

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Speaker 2: sell your chickens too, and that company might be able

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Speaker 2: to dictate its terms.

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Speaker 3: So, where monopoly is all about a single seller that

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Speaker 3: controls supply of a particular product or service, monopsony is

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Speaker 3: about what's happening on the buy side. Here's Doha.

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Speaker 6: It's this idea of deep power that is exercised on

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Speaker 6: the buy side of the market. And this is actually

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Speaker 6: very old economics, right. This is a theory that was

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Speaker 6: pioneered by Joan Robinson in the nineteen thirties, and so

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Speaker 6: there's this idea that buyer power might be harmless. But

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Speaker 6: we've known for almost a century empirically that you know,

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Speaker 6: if a buyer chooses an in along a supply curve

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Speaker 6: and then is able to exercise the power to drop

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Speaker 6: the value of that input, maybe in the short run

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Speaker 6: you get lower prices or expanded output, but if you

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Speaker 6: drop the value below a reservation wage, right, especially when

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Speaker 6: you're talking about labor markets, which a lot of producer

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Speaker 6: and grower economies you know, are basically labor markets, that

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Speaker 6: you will eventually destroy incentives to continue making that input,

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Speaker 6: and so in the long run you will actually get

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Speaker 6: contraction in a market that is classical monopsony power that

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Speaker 6: is empirically sound, and that has been I think upheld

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Speaker 6: by a lot of economists for a very long time.

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Speaker 6: There is another flavor of monopsony, of course, which is

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Speaker 6: just the abuse of bargaining leverage. If you fear termination

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Speaker 6: of a contract that your buyer has any negotiated with you,

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Speaker 6: if you fear this is the same thing with non compete, right,

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Speaker 6: This is the same sort of economic idea that if

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Speaker 6: you have lower bargaining leverage, you are likely to do

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Speaker 6: everything you possibly can to be more compliant with the

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Speaker 6: terms that are imposed by the purchaser of whatever product

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Speaker 6: or service that you are selling. And so that just

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Speaker 6: maps on almost perfectly with the chicken industry. And what

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Speaker 6: is really I think most fascinating in the chicken industry

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Speaker 6: and other types of labor markets is that you can

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Speaker 6: actually exercise power and abuse bargaining leverage at much lower

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Speaker 6: concentration thresholds, which is a really interesting and fruitful area

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Speaker 6: of economic research that has been produced over the last

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Speaker 6: five to ten years.

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Speaker 2: So, armed with that wider definition of competitive pressures, the

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Speaker 2: DOJ has gone on the attack. For instance, they successfully

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Speaker 2: blocked a merger of the publisher's Penguin, Random Had and

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Speaker 2: Simon and Schuster by arguing that the deal would lead

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Speaker 2: to lower earnings for authors.

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Speaker 3: But the DOJ's results when it comes to chicken have

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Speaker 3: been more mixed despite that broader definition of anti trust.

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Speaker 3: In twenty twenty, the DOJ indicted executives from poultry processors

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Speaker 3: including Pilgrim's Pride and Claxton Poultry Farms for price fixing,

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Speaker 3: only to see them acquitted by a jury.

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Speaker 2: There have been some wins too. The DOJ got a

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Speaker 2: eighty five million dollar settlement with a bunch of poultry

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Speaker 2: processors over allegations that they conspired to share information on wages.

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Speaker 7: One of the cases we brought involved an information sharing

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Speaker 7: amongst chicken processors, and they were sharing incredibly detailed information

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Speaker 7: about compensation. And not only were they sharing it, they

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Speaker 7: were like meeting every year and eventually bringing their data

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Speaker 7: so that they could all be sure that they were

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Speaker 7: sharing accurate data and then talking about compensation. So there's

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Speaker 7: the example of coordination amongst people who should be competing

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Speaker 7: for workers actually figuring out how not to compete with

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Speaker 7: each other.

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Speaker 2: And last year Coke Food's, a huge poultry processor, agreed

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Speaker 2: that it would no longer charge a penalty if contract

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Speaker 2: growers choose to switch processors after the DOJ filed suit

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Speaker 2: under Sherman and our good friend the Packers and Stockyards Act.

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Speaker 7: Another case we brought involved again a specific chicken processor

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Speaker 7: who was contracting with and that's already a relationship where

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Speaker 7: the processor owns most of the bargaining power, but decided

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Speaker 7: that wasn't enough their growers. If you want to switch

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Speaker 7: to one of our competitors, we're going to make you

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Speaker 7: pay a penalty. So that is the processor preventing competition

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Speaker 7: unilaterally by making it harder for the grower to actually

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Speaker 7: benefit from whatever competition exists in the market. And it

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Speaker 7: is also just simply obviously unfair to these growers who

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Speaker 7: don't have that much opportunity by denying them whatever limited

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Speaker 7: opportunities exist.

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Speaker 3: It's a nice step for critics of the tournament system

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Speaker 3: that we talked about in episode two, but there's also

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Speaker 3: more that could be done.

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Speaker 7: The third case involved the chicken tournament system, right, and

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Speaker 7: so One of the things chicken farmers face growing chickens

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Speaker 7: is every six weeks when their chickens are picked up

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Speaker 7: by the processor, they are actually weighed and measured against

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Speaker 7: the other growers that are delivering chicks the same week,

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Speaker 7: and it's almost you know, you're directly competing with your

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Speaker 7: fellow chicken growers. And some people get penalized and some

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Speaker 7: people get a benefit. But given the risk these growers face,

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Speaker 7: we brought a case saying the penalty itself makes it

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Speaker 7: impossible for growers to really understand the financial risks they're

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Speaker 7: taking because there's a lot of arbitrariness in the tournament

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Speaker 7: and it's not just your results don't depend on how

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Speaker 7: well you perform. And so Wayne Sanderson, who is the

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Speaker 7: I believe the third largest chicken processor in the country,

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Speaker 7: agreed that they would stop penalizing growers in their tournament.

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Speaker 2: System, so another small victory. Meanwhile, the US Department of

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Speaker 2: Agriculture this year proposed more regulation of the tournament system

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Speaker 2: under you guessed it, the Packers in Stockyards Act. Joe,

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Speaker 2: should we make packers in stockyards merch?

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Speaker 4: Yes?

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Speaker 3: Absolutely, well maybe, but it is kind of interesting to

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Speaker 3: think about how two hundred and fifty years ago, Americans

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Speaker 3: were all worried about taxes under King George and the

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Speaker 3: tyranny of the state. But today maybe we should all

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Speaker 3: be worrying about something else, what Dilha calls the tyranny

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Speaker 3: of the intermediary.

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Speaker 6: Thinking about the chicken industry in particular, you see limits

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Speaker 6: on the ability to sell your product or service to

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Speaker 6: a small number of companies, And that is how you

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Speaker 6: get this problem of the tyranny of the intermediary. It's

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Speaker 6: the meat processor that sits in the middle, right between

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Speaker 6: the ultimate purchaser and the grower, and can command a

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Speaker 6: certain sum or lower the price on one side of

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Speaker 6: the market and really grow revenues and get fatter in

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Speaker 6: the middle.

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Speaker 2: So anti trust has a long history with agriculture and

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Speaker 2: the poultry industry, although the way it's being viewed and

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Speaker 2: enforced has been changing recently. But that's only one side

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Speaker 2: of the story, because even as anti trust evolves, the

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Speaker 2: way companies run their businesses has evolved too.

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Speaker 3: A lot. When the Sherman Act and the Clayton Act

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Speaker 3: and the Packers and Stockyards Act were all created, the

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Speaker 3: middlemen of America were smaller and not as technically sophisticated. Obviously,

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Speaker 3: if you're going to influence prices, you're probably doing it

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Speaker 3: in a back room somewhere, smoking a cigar, probably playing poker.

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Speaker 2: But today companies have a host of new data sources

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Speaker 2: and tech powered tools to run their businesses. And when

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Speaker 2: it comes to Chicken and souped up data sources, we

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Speaker 2: have to talk about Agristats.

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Speaker 5: We'll say, generally speaking, it's often been referred to as

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Speaker 5: the most important, one of the most important companies you've

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Speaker 5: never heard of.

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Speaker 2: That's Jonathan Canter, the Assistant US Attorney General for Antitrust

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Speaker 2: at the DOJ. He's the head honcho Doha and Michael's

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Speaker 2: boss basically, and together with Lena Kahan, the chair of

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Speaker 2: the Federal Trade Commission, he's been leading one of the

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Speaker 2: most aggressive regulatory responses to antitrust in years, decades even, and.

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Speaker 3: One of their more recent actions is against Agristads. Now

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Speaker 3: onloads listeners will actually have heard of this company before.

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Speaker 3: We spoke about it earlier this year with David Dian,

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Speaker 3: the executive editor of The American Prospect. He did such

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Speaker 3: a good job describing what Agristas does that we're just

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Speaker 3: going to let him do it again here.

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Speaker 8: And this company collects real time proprietary data from all

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Speaker 8: of the meat packing producers in a given market, whether

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Speaker 8: it's pulk or pork, or poultry or chicken or turkey.

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Speaker 8: And they put all this data in these giant books

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Speaker 8: and they give them out to these various competitors, which

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Speaker 8: now have basically a setup of everything that their competitors

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Speaker 8: are doing, including their price, including their supply, including every

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Speaker 8: single thing.

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Speaker 7: Part of their market.

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Speaker 8: And now they can know that, oh, I can probably

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Speaker 8: raise my price because I'm under price relative to my competitor,

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Speaker 8: but I won't lose market share because my competitor is

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Speaker 8: charging more for this product and it has the tendency

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Speaker 8: to ratchet prices upward.

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Speaker 2: The DOJ filed suit against Agristats last year, arguing that

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Speaker 2: it was violating the Sherman Act by sharing competitive information.

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Speaker 2: We reached out to Agristats for comment, however, they didn't respond.

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Speaker 2: The company published a statement on its website shortly after

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Speaker 2: the lawsuit was initially filed. They're denying the allegations.

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Speaker 3: Currently, the case is still live, which means Jonathan can't

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Speaker 3: talk about it in detail, but more generally, he argues

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Speaker 3: that it illustrates the dominance of intermediarias in the economy.

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Speaker 5: So this is a case that we brought involving information exchanges,

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Speaker 5: among other things, poultry processors and the idea. And this

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Speaker 5: is something that we're seeing in many aspects of our economy,

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Speaker 5: is that when large companies share competitively sensitive information using

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Speaker 5: often faceless intermediaries, that sharing of information can result in

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Speaker 5: higher prices to consumers, but it could also result in depriving,

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Speaker 5: in this instance, family farmers and others of a fair

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Speaker 5: return on investment.

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Speaker 2: So the way companies might share price and market information

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Speaker 2: has moved on from those secret deals in dark rooms

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Speaker 2: of the past. Now they might do it on a

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Speaker 2: platform or through an algorithm, and antitrust enforcement has to

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Speaker 2: adapt to this new world.

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Speaker 5: This is an issue that we are confronting throughout our

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Speaker 5: economy and so the concerns around data sharing and coordinat

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Speaker 5: are not new. The antitrust laws enacted initially in eighteen

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Speaker 5: ninety have been dealing with this ever since. But what

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Speaker 5: we are encountering now is almost a supercharging of data

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Speaker 5: sharing and coordination, and so the use of technology and

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Speaker 5: intermediaries has created the opportunity for companies to contribute information,

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Speaker 5: for example, to a central database or service and have

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Speaker 5: that service essentially perform the function of coordinating and using

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Speaker 5: that data to help those companies extract higher prices or

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Speaker 5: offer lower returns to people who are selling their goods

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Speaker 5: and services. In the context of technology, now, something that

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Speaker 5: used to be difficult to do because it required Manila

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Speaker 5: envelopes of data and spreadsheets and calculators and a lot

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Speaker 5: of manual labor is increasingly being outsourced to technology algorithms

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Speaker 5: that can take this information and essentially take on the

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Speaker 5: pricing or take on competitively sensitive functions of a business.

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Speaker 5: And the more that is outsourced to these technologies, these algorithms,

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Speaker 5: the more the difficulties that used to somewhat restrict the

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Speaker 5: ability of companies to engage in anti competitive coordination. Those frictions,

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Speaker 5: those impediments are being lifted and eliminated, and it's going

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Speaker 5: to make it easier and more effective. And that is

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Speaker 5: a real big concern of ours. And so when we

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Speaker 5: think about what does an agreement look like, what does

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Speaker 5: information sharing, what does coordination look like? In the year

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Speaker 5: twenty twenty four, we have to look at what market

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Speaker 5: realities present and market realities today present algorithms doing that work.

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Speaker 5: And whether it's an algorithm taking the information, spinning it

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Speaker 5: back out and resulting at higher prices, or two individuals

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Speaker 5: in a smoke filled room as it might have been

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Speaker 5: one hundred years ago, it's the same anti competitive end.

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Speaker 5: They're just doing it through different means. And so whether

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Speaker 5: it's a handshake, using the postal service and sending mail

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Speaker 5: to coordinate, whether it's it's using email or text messages

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Speaker 5: or chat or phone, or in today's world, sharing information

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Speaker 5: through an algorithm and outsourcing it to AI, it's still

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Speaker 5: the same thing. It's coordination, it's price fixing, it's market allocation.

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Speaker 5: In the antitrust laws applied just as much now, if

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Speaker 5: not more, than they did when they were enacted in

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Speaker 5: eighteen ninety.

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Speaker 3: So the outcome of the agristatsuit will be very interesting

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Speaker 3: to watch.

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Speaker 2: But what about changes in the way we raise chickens too,

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Speaker 2: Because even if chicken prices come down and labor practices improve,

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Speaker 2: there might still be some other poultry related problems.

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Speaker 4: One of the most remarkable food miracles is the story

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Speaker 4: of Chicken, a triumphle of research on the farm and

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Speaker 4: in the marketing system. Once something special for Sunday dinner.

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Speaker 4: Chicken inspected and graded is now thrifty every day. Yes,

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Speaker 4: in one generation, people of this country have doubled their

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Speaker 4: consumption of potun Bomb research has led to the control

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Speaker 4: of disease, improvement of breeds, advancement of production marketing research

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Speaker 4: has developed low cost methods of mass distribution in processing, storing, handling,

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Speaker 4: and packing. And these boxes joined the never ending.

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Speaker 3: Technological changes in the way we grow chickens was once

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Speaker 3: pitched as a big win for consumers. We talked about

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Speaker 3: it in our earlier episode. The introduction of hormones, antibiotics,

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Speaker 3: and growth promoters all combined to create a more robust chicken.

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Speaker 2: But just as antitrust regulators have started to prepare some

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Speaker 2: of the damage wrought by new technologies, consumers have been

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Speaker 2: pushing back too.

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Speaker 3: We spoke to Marion McKenna, the public health specialist earlier

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Speaker 3: in the series, and as she explained it, people's attitudes

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Speaker 3: towards let's call them augmented chickens has turned.

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Speaker 7: Now.

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Speaker 3: The worry is that all that antibiotic use in birds

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Speaker 3: might make it more difficult to treat people, and that's

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Speaker 3: led to a big change.

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Speaker 1: We got really significant change in the United States about

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Speaker 1: how antibiotics were allowed to be used in the raising

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Speaker 1: of livestock, not legislation, because legislation had been tried on

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Speaker 1: this issue back in the nineteen seventies and foiled by

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Speaker 1: some congressman with big agricultural interest behind them. What the

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Speaker 1: Obama administration did in pretty much their last days in

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Speaker 1: office was instead to change some regulations they're technically called

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Speaker 1: guidances at the FDA that affected how antibiotics were allowed

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Speaker 1: to be labeled. And since the label has the force

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Speaker 1: of law for how an antibiotic can be used, that

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Speaker 1: actually created significant change. What it basically did was outlaw

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Speaker 1: growth promotion. Now, the reason why this happened was first

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Speaker 1: because the Obama administration took it on as a cause,

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Speaker 1: and second because one of the most power chicken companies

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Speaker 1: in the United States produce foods, got behind the change.

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Speaker 1: In fact, you could argue led the change in some ways,

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Speaker 1: but also there was a consumer movement. And it's kind

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Speaker 1: of remarkable to me that given the size of the

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Speaker 1: economic forces that we're talking about, this incredibly large trade

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Speaker 1: in livestock, that consumer voices were heard, but sets of

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Speaker 1: very large buyers, for instance, university medical centers and very

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Speaker 1: large public school systems, both of which are feeding like

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Speaker 1: vulnerable children or feeding vulnerable patients. Said to essentially their wholesalers,

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Speaker 1: we don't want any more to buy chicken that was

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Speaker 1: raised with routine use of antibiotics, because if there is

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Speaker 1: resistant bacteria on this meat, it is going to endanger

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Speaker 1: people whom we're feeding. And that led both the companies

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Speaker 1: and the regulators to understand that if they stepped out

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Speaker 1: and made these changes, there was an audience and a

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Speaker 1: market waiting for them, and someone, to everyone's shock, the

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Speaker 1: change actually happened. So in the last days of the

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Speaker 1: Obama administration, it became no longer possible to use growth

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Speaker 1: promoters in the United States.

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Speaker 2: Because, of course, chicken isn't just about prices and wages.

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Speaker 2: It's about lives too. We eat a lot of chicken

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Speaker 2: meat and we want it to be good for us. Meanwhile,

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Speaker 2: the use of antibiotics has gone hand in hand with

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Speaker 2: crowded chicken houses and factory farming.

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Speaker 3: Is Marin mentioned. Perdue, the fourth largest poultry company in

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Speaker 3: the US, got on board with the change. Even eight

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Speaker 3: years later, it says it's still committed to quote no

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Speaker 3: antibiotics ever, in its flocks. Some other companies have backtracked,

442
00:26:49,160 --> 00:26:52,600
Speaker 3: though Tyson, for instance, has dropped its no antibiotics label,

443
00:26:52,920 --> 00:26:55,159
Speaker 3: though it says it's only using drugs that aren't important

444
00:26:55,200 --> 00:26:55,879
Speaker 3: to human health.

445
00:26:57,320 --> 00:27:00,520
Speaker 2: In twenty twenty four, however, there is something else to

446
00:27:00,560 --> 00:27:03,800
Speaker 2: worry about when it comes to chickens collective impact on

447
00:27:03,920 --> 00:27:05,760
Speaker 2: human health, bird flu.

448
00:27:06,480 --> 00:27:09,640
Speaker 1: Bird flu has been coming back to the United States

449
00:27:09,680 --> 00:27:14,679
Speaker 1: and being found not just in migrating wild birds and raptors,

450
00:27:14,720 --> 00:27:20,720
Speaker 1: for instance, but also in domesticated birds. And when avian flu,

451
00:27:20,800 --> 00:27:25,640
Speaker 1: which is incredibly pathogenic to birds, gets into a very

452
00:27:25,840 --> 00:27:31,520
Speaker 1: large scale chicken operation, whether that's turkeys or broilers, meat chickens,

453
00:27:31,760 --> 00:27:36,720
Speaker 1: or laying hens egg chickens, the results are incredibly dramatic.

454
00:27:37,480 --> 00:27:39,720
Speaker 1: Entire farms can be wiped out, and those farms may

455
00:27:39,720 --> 00:27:42,919
Speaker 1: be very large. Egg farms can have more than a

456
00:27:42,960 --> 00:27:46,840
Speaker 1: million chickens on them easily, and so it's a significant

457
00:27:46,920 --> 00:27:50,760
Speaker 1: concern that this flu keeps on, sort of like knocking

458
00:27:50,840 --> 00:27:56,199
Speaker 1: at the window of our agriculture and finding ways inside.

459
00:27:57,800 --> 00:28:00,840
Speaker 2: You may remember this virus from such inflame sationary events

460
00:28:00,880 --> 00:28:03,639
Speaker 2: as the twenty twenty three egg price spike, which was

461
00:28:03,720 --> 00:28:07,160
Speaker 2: caused in part by the culling of millions of hens

462
00:28:07,400 --> 00:28:09,879
Speaker 2: because of bird flu, as we discussed in the first

463
00:28:09,880 --> 00:28:10,719
Speaker 2: part of this series.

464
00:28:11,280 --> 00:28:14,320
Speaker 1: So over the past couple of years, it's become very

465
00:28:14,320 --> 00:28:18,240
Speaker 1: clear out in the wild world that this avian strain

466
00:28:18,280 --> 00:28:20,760
Speaker 1: of flu, avian flu H five N one also can

467
00:28:20,840 --> 00:28:25,480
Speaker 1: affect mammals. It had a really profound effect on several

468
00:28:25,640 --> 00:28:30,159
Speaker 1: collections of mammals living by ocean sides, like sea lions,

469
00:28:30,200 --> 00:28:33,320
Speaker 1: for instance, in South America. But I think it was

470
00:28:33,400 --> 00:28:37,440
Speaker 1: kind of a shock for people to realize that somehow

471
00:28:38,000 --> 00:28:42,080
Speaker 1: this flu had made a sufficient adaptation that it could

472
00:28:42,080 --> 00:28:42,840
Speaker 1: affect cows.

473
00:28:43,320 --> 00:28:46,480
Speaker 2: Did you hear that bird flu is now found in cows.

474
00:28:46,920 --> 00:28:49,120
Speaker 2: That's your chicken sandwich and your milkshake.

475
00:28:49,520 --> 00:28:52,480
Speaker 1: And now avian flu H five to one has been

476
00:28:52,520 --> 00:28:58,200
Speaker 1: found in primarily in dairy farms up and down the US.

477
00:28:59,120 --> 00:29:02,600
Speaker 1: It may well be in other types of cattle raising

478
00:29:02,680 --> 00:29:07,800
Speaker 1: as well. It happens that on dairy farms, first workers

479
00:29:07,840 --> 00:29:10,280
Speaker 1: are pretty face to face with the cows fairly often,

480
00:29:10,360 --> 00:29:13,160
Speaker 1: and second they interact with the cows fairly often because

481
00:29:13,160 --> 00:29:16,320
Speaker 1: the cows have to be milked regularly, and so that

482
00:29:16,440 --> 00:29:19,920
Speaker 1: flu caned sicken cows and can cross from cows to

483
00:29:20,040 --> 00:29:24,240
Speaker 1: humans has become visible on dairy farms in a way

484
00:29:24,240 --> 00:29:26,560
Speaker 1: that I think no one really expected and that has

485
00:29:26,600 --> 00:29:27,680
Speaker 1: taken us by surprise.

486
00:29:28,440 --> 00:29:30,760
Speaker 3: At the time we're recording this, the Center for Disease

487
00:29:30,800 --> 00:29:33,720
Speaker 3: Control and Prevention is confirmed that healthcare workers in Missouri

488
00:29:33,800 --> 00:29:36,120
Speaker 3: got sick if they're nursing a patient who is infected

489
00:29:36,160 --> 00:29:38,920
Speaker 3: with bird flu. It's not yet clear how they got it,

490
00:29:38,960 --> 00:29:40,960
Speaker 3: but it is a reminder the chicken might end up

491
00:29:41,000 --> 00:29:46,640
Speaker 3: being ground zero for another pandemic too. It's probably a

492
00:29:46,680 --> 00:29:50,520
Speaker 3: stretch to say that the US economy, whether it's inflation, wages,

493
00:29:50,920 --> 00:29:53,880
Speaker 3: quality of life, etc. Rests on how we grow, treat,

494
00:29:53,880 --> 00:29:56,400
Speaker 3: and sell its chicken. But like there's a lot there,

495
00:29:56,720 --> 00:29:57,959
Speaker 3: it contains multitudes.

496
00:29:58,320 --> 00:30:01,920
Speaker 2: Chicken does contain multitudes. When demand goes up and supply

497
00:30:02,040 --> 00:30:05,320
Speaker 2: chains and labor markets get upended, whether it's from disease

498
00:30:05,440 --> 00:30:09,120
Speaker 2: or climate disaster, chicken prices go up too, adding to

499
00:30:09,240 --> 00:30:13,080
Speaker 2: overall inflation, and companies might push price in that scenario

500
00:30:13,120 --> 00:30:16,920
Speaker 2: to make up for lost volumes, which also adds to inflation.

501
00:30:17,080 --> 00:30:19,080
Speaker 3: And chicken on the way birds are raised could be

502
00:30:19,120 --> 00:30:21,760
Speaker 3: the source of another major pandemic, one that could cause

503
00:30:21,760 --> 00:30:23,720
Speaker 3: a lot of disruption yet again, and the.

504
00:30:23,680 --> 00:30:26,360
Speaker 2: Tournament system has a lot to say about the balance

505
00:30:26,360 --> 00:30:29,840
Speaker 2: of power between big companies and platforms and the people

506
00:30:29,840 --> 00:30:33,000
Speaker 2: who rely on them. Plus, chickenization is on the march

507
00:30:33,040 --> 00:30:36,320
Speaker 2: more broadly, making its way into pig farming and other

508
00:30:36,400 --> 00:30:38,040
Speaker 2: parts of American agriculture.

509
00:30:38,600 --> 00:30:41,600
Speaker 3: In the meantime, the intense concentration in the poultry industry

510
00:30:41,600 --> 00:30:44,480
Speaker 3: has captured the attention of regulators and prompted some action

511
00:30:44,680 --> 00:30:47,400
Speaker 3: on things like price sharing, but with mixed results so far.

512
00:30:48,080 --> 00:30:51,600
Speaker 2: For them, chicken is really important because it's not just

513
00:30:51,680 --> 00:30:55,320
Speaker 2: about lost or lower earnings for farmers. It's also about

514
00:30:55,320 --> 00:30:59,360
Speaker 2: what happens after that. Here's Jonathan Canter from the DOJ again.

515
00:31:00,040 --> 00:31:02,840
Speaker 5: If you look at the aggregate data, our country has

516
00:31:02,880 --> 00:31:05,840
Speaker 5: lost more than one hundred thousand farms between twenty eleven

517
00:31:05,880 --> 00:31:09,160
Speaker 5: and twenty eighteen. This farmer's share of the retail food

518
00:31:09,200 --> 00:31:12,320
Speaker 5: dollar used to hover around forty percent. Now it's down

519
00:31:12,320 --> 00:31:15,640
Speaker 5: to about fourteen. We've got four companies that control eighty

520
00:31:15,680 --> 00:31:18,400
Speaker 5: five percent of the corn seats market. We have three

521
00:31:18,440 --> 00:31:22,600
Speaker 5: manufacturers that control ninety five percent of equipment production and maintenance.

522
00:31:22,920 --> 00:31:25,280
Speaker 5: We have four companies that control over eighty percent of

523
00:31:25,320 --> 00:31:28,720
Speaker 5: beef packing, and we have a small number of significant

524
00:31:28,920 --> 00:31:32,480
Speaker 5: packers that control poultry, including chicken. The changes that have

525
00:31:32,520 --> 00:31:36,040
Speaker 5: occurred in our economy around these industries and the consolidation

526
00:31:36,200 --> 00:31:40,040
Speaker 5: the concentration are alarming and often are one of the

527
00:31:40,040 --> 00:31:43,200
Speaker 5: reasons why it is important that we remain vigilant and

528
00:31:43,280 --> 00:31:46,040
Speaker 5: focus on forcing the law when the facts and the

529
00:31:46,120 --> 00:31:48,920
Speaker 5: law demand it. But it affects the local community. It

530
00:31:48,960 --> 00:31:52,640
Speaker 5: affects the ability of people to maintain their way of life.

531
00:31:52,720 --> 00:31:55,720
Speaker 5: It affects the bookstore, It affects the independent pharmacy. It

532
00:31:55,720 --> 00:31:59,600
Speaker 5: affects the survival of the local hospital. It affects the

533
00:31:59,680 --> 00:32:03,000
Speaker 5: local bank, which is important to providing capital to local

534
00:32:03,000 --> 00:32:05,920
Speaker 5: businesses who want to build. These are pillars of our

535
00:32:06,000 --> 00:32:10,320
Speaker 5: rural communities, which are in turn the lifeblood of our economy.

536
00:32:10,440 --> 00:32:14,400
Speaker 5: And if we're not investing in preserving a competitive economy

537
00:32:14,440 --> 00:32:18,160
Speaker 5: that provides opportunity for our family farmers to thrive and

538
00:32:18,280 --> 00:32:22,400
Speaker 5: build and maintain and sustain those small businesses hand them

539
00:32:22,440 --> 00:32:25,040
Speaker 5: down from generation to one another, we are not only

540
00:32:25,080 --> 00:32:28,160
Speaker 5: doing a disservice to our family farmers, but we're doing

541
00:32:28,240 --> 00:32:31,719
Speaker 5: a disservice to our rural communities at large. And that

542
00:32:31,880 --> 00:32:35,120
Speaker 5: is a significant problem, and it is why these cases

543
00:32:35,160 --> 00:32:36,040
Speaker 5: are so important.

544
00:32:36,920 --> 00:32:39,200
Speaker 2: So there you have it. Chicken can be an engine

545
00:32:39,200 --> 00:32:42,520
Speaker 2: for economic growth too, and when farmers can't make enough

546
00:32:42,560 --> 00:32:46,840
Speaker 2: money producing it, whole communities might suffer. Chicken can influence

547
00:32:47,160 --> 00:32:50,440
Speaker 2: entire towns, counties, states, and economies.

548
00:32:50,880 --> 00:32:53,520
Speaker 3: So the next time you eat a delicious chicken sandwich,

549
00:32:53,600 --> 00:32:55,760
Speaker 3: or a hard boiled egg, or even a nugget, we

550
00:32:55,840 --> 00:32:59,360
Speaker 3: hope you'll think about the bigger economic picture. The Chicken Represents.

551
00:33:04,240 --> 00:33:08,120
Speaker 2: Beat Capitalism is written by Tracy Alloway, Carmen Rodriguez, and

552
00:33:08,240 --> 00:33:09,120
Speaker 2: Joe Wisenthal.

553
00:33:09,600 --> 00:33:12,200
Speaker 3: This short series was produced and edited by Carmen with

554
00:33:12,240 --> 00:33:14,160
Speaker 3: the help of kil Brooks and Dashel Bennett.

555
00:33:14,320 --> 00:33:16,840
Speaker 2: It was also fact checked by Dash and Kale.

556
00:33:16,600 --> 00:33:19,840
Speaker 3: Blake Maple's chickenized our Odd Lots theme and mixed this

557
00:33:19,960 --> 00:33:20,640
Speaker 3: episode too.

558
00:33:21,080 --> 00:33:24,520
Speaker 2: Brendan Newnham is our executive producer, and Sage Bauman is

559
00:33:24,520 --> 00:33:27,920
Speaker 2: Bloomberg's head of Podcasts. If you enjoyed this three part

560
00:33:28,000 --> 00:33:31,280
Speaker 2: deep dive into the chicken industry, please consider leaving a

561
00:33:31,400 --> 00:33:35,280
Speaker 2: positive review on your favorite podcast platform. Thanks for listening.

562
00:33:59,480 --> 00:33:59,720
Speaker 2: Thanks