Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Joe, why did the chicken join the Revolutionary War? I
Speaker 2: have no idea, because it didn't want to be cooped
Speaker 2: up under British rule.
Speaker 3: Okay, but it sitting aside the terrible puns. Wasn't it
Speaker 3: really about taxes?
Speaker 4: Joe?
Speaker 2: Joe? Why did the colonial chicken refuse to pay British
Speaker 2: taxes because it didn't want to put all its eggs
Speaker 2: in King George's basket?
Speaker 5: Should I keep going?
Speaker 3: I'm good, I'm good, Thanks, I'm good, Okay.
Speaker 2: Fine. To understand chicken and the current landscape of the
Speaker 2: US economy and the companies in it, it helps to
Speaker 2: go back in time and revisit a few key moments
Speaker 2: in US history.
Speaker 6: Going back to the founding, Americans were actually suspicious of
Speaker 6: the power of large corporations. And one reason for that
Speaker 6: is that it used to be that the government would
Speaker 6: grant corporate charters.
Speaker 7: Right.
Speaker 6: There's this history in the United States before general and
Speaker 6: corporation statutes that corporations are really creatures of the state,
Speaker 6: and so there was always this suspicion that if they
Speaker 6: grew to be too powerful, the kind of abuse that
Speaker 6: they could bring to bear on the lives of ordinary
Speaker 6: people was really extensive.
Speaker 2: And so Doha Mecki is the Principal Deputy Assistant General
Speaker 2: in the Anti Trust Division of the Department of Justice.
Speaker 2: That's a long title. It means she's the second highest
Speaker 2: ranking official there.
Speaker 3: Today. The US government has a whole constellation of laws, acts,
Speaker 3: and agencies all aimed at ensuring that America's economy remains
Speaker 3: fair and competitive. One of the most important is where
Speaker 3: Doha works.
Speaker 6: The DOJ, and the Anti Trust Division is one component
Speaker 6: of many at the Justice Department. And our specific mandate
Speaker 6: is to enforce the anti trust laws and essentially to
Speaker 6: guarantee and vindicate the economic liberty of all Americans. And
Speaker 6: we do that by enforcing the federal and he trust laws,
Speaker 6: the best known of which are the Sherman Act and
Speaker 6: the Clayton Act, but you've.
Speaker 2: Probably heard of these before. The Sherman Anti Trust Act
Speaker 2: of eighteen ninety was famously deployed in the breakup of
Speaker 2: Standard Oil back in nineteen eleven, which is still probably
Speaker 2: the country's most well known anti trust case, and the
Speaker 2: Clayton Act arrived soon after that. But America's approach to
Speaker 2: antitrust has constantly changed over time, and.
Speaker 3: Chicken, with all its accusations of price gouging and unfair
Speaker 3: labor practices and just huge corporate concentration, seems to be
Speaker 3: a perfect poultry. Peatrie dish to experiment with some new
Speaker 3: ways of looking at antitrust.
Speaker 2: Welcome to Part three of Beak Capitalism, our ongoing exploration
Speaker 2: of the US economy through the medium of Chicken. In
Speaker 2: this episode, we're asking how we can solve some of
Speaker 2: the problems that Big Chicken creates. Can we actually uncluck
Speaker 2: the system?
Speaker 7: So a little bit of history. Actually, the relationship between
Speaker 7: agriculture and anti trust goes back to the beginning. Farmers
Speaker 7: were one of the big supporters of the Sherman Act,
Speaker 7: the first anti trust statue passed by Congress.
Speaker 3: Michael Cati's is Deputy Assistant Attorney General for the Anti
Speaker 3: Trust Division at the DOJ. He works alongside Doha, but
Speaker 3: recently he spent a lot of time focused on agriculture
Speaker 3: and Act because it turns out the DOJ has a
Speaker 3: long history with the food industry.
Speaker 7: And early on the Department of Justice brought a number
Speaker 7: of cases against meat packers and along about nineteen fourteen,
Speaker 7: Congress looked at the way the Supreme Court was handling
Speaker 7: that Act and was not happy. So they passed the
Speaker 7: Clayton Act, which was supposed to broadened the enforcement powers
Speaker 7: of the Division. They also created the Federal Trade Commission, and.
Speaker 2: The first thing the President asked the newly created Federal
Speaker 2: Trade Commission to do was study the meat packing industry.
Speaker 7: Fast forward to nineteen twenty, the FTC issues a three
Speaker 7: volume report documenting everything going wrong in meat packing markets,
Speaker 7: both collusion and deception, and at the same time, the
Speaker 7: Justice Department files an anti trust case that breaks up
Speaker 7: the packing industry. And yet Congress still wasn't happy. So
Speaker 7: then in nineteen twenty one, Congress, now under a strong
Speaker 7: Republican and a fairly conservative Congress, passes the Packers and
Speaker 7: Stockyards Act, which really said, look, we are concerned that
Speaker 7: the people who ranch and grow hogs are always going
Speaker 7: to be facing very large, powerful interests, and we want
Speaker 7: to give them extra protections. And so was the anti
Speaker 7: trust laws focus solely on competition. The Packers in stock
Speaker 7: Guards Act actually provided explicit protection for ranchers, hot growers,
Speaker 7: eventually chicken growers from deception on fairness discrimination, you're.
Speaker 3: Going to want to remember the Packers in Stockgards Act.
Speaker 3: It's been deployed quite a bit lately in the name
Speaker 3: of anti trust enforcement in agriculture and chickens especially.
Speaker 2: But chicken also says something about fairness in business more generally.
Speaker 6: There are many lessons to be drawn from anti trust
Speaker 6: enforcement in the chicken industry that I think have made
Speaker 6: us better enforcers and that have really brought into focus
Speaker 6: the expansiveness of our mission. Again, anti trust is a
Speaker 6: big mandate. It rhymes with a lot of core democratic
Speaker 6: values that all of us hold as citizens of this country.
Speaker 6: And so to bring that down to the level of
Speaker 6: enforcement anti trust enforcement at the market level. What we
Speaker 6: see in the chicken industry is that this outsourcing of
Speaker 6: risk is actually a business model that many kinds of
Speaker 6: companies employee. For example, a ride sharing company right that
Speaker 6: outsources risk investment and recoups a lot of the profit
Speaker 6: for simply matching writers and passengers.
Speaker 5: For example.
Speaker 6: There are other examples in the real estate industry, in
Speaker 6: banking again where you see this sort of outsourcing of risk,
Speaker 6: and it raises fundamental questions about how those markets are functioning,
Speaker 6: whether consumers are ultimately getting the kind of choices, good value, innovation,
Speaker 6: and other things that we really lean on the antitrust
Speaker 6: laws to deliver.
Speaker 3: All of this raises the question of what exactly we
Speaker 3: mean by anti trust and what exactly is anti competitive behavior.
Speaker 2: Yeah, we should talk about that because for years, competition
Speaker 2: was judged on the basis of a consumer welfare standard.
Speaker 2: What that means was, for example, if two companies decided
Speaker 2: to merge and prices for consumers ended up being lower
Speaker 2: as a result, then that was generally fine. Monopoly was
Speaker 2: only a really bad thing if it led to higher prices, right.
Speaker 3: Because pretty much everyone likes cheap chicken, and at a minimum,
Speaker 3: you could argue that concentration in the poultry industry and
Speaker 3: industrialization of chicken and all the scale that comes with
Speaker 3: it has created a lot more white meat to go around.
Speaker 2: But in recent years, policymaker's approach to anti competitive behavior
Speaker 2: has started to change a lot. Not only are they
Speaker 2: looking beyond simple chicken supply, but they're also arguing that
Speaker 2: it's not clear that all of this is leading to
Speaker 2: better outcomes for consumers either.
Speaker 7: One of the problems in anti trust enforcement generally is
Speaker 7: people said, well, you know, if you have power on
Speaker 7: the buying side that just will get passed down the
Speaker 7: line to the ultimate consumers. That's actually wrong, right. The
Speaker 7: concern here is if the middle person has the power,
Speaker 7: they're going to extract taxes up and down the line.
Speaker 7: And it's not the case that you would expect somebody
Speaker 7: if there are forcing prices down through any competitive means,
Speaker 7: that they're going to pass that along. And just as
Speaker 7: a sort of general example, think about it this way.
Speaker 7: The way you exert monopoly power on the buying side,
Speaker 7: which we call monopsony power, right, is you actually buy less,
Speaker 7: so you're reducing demand so that prices go low. Well,
Speaker 7: if they're buying less, they're selling less, and so that
Speaker 7: can't help consumers. Consumers want more supply, more competition, So
Speaker 7: either it has sort of no effect downstream, or it
Speaker 7: actually contributes to higher prices. So when we go after
Speaker 7: monopsony power in the agricultural industry and are successful, it
Speaker 7: benefits both and often the consumer.
Speaker 2: Joe ring the monopsony clackson monopsony.
Speaker 3: It comes up a lot nowadays. To put it simply,
Speaker 3: it's basically a market structure where there's only one big buyer,
Speaker 3: whether that's of labor widgets, whatever.
Speaker 2: So if you're a chicken farmer in Rhode Island, for instance,
Speaker 2: there might be just one poultry processor that you can
Speaker 2: sell your chickens too, and that company might be able
Speaker 2: to dictate its terms.
Speaker 3: So, where monopoly is all about a single seller that
Speaker 3: controls supply of a particular product or service, monopsony is
Speaker 3: about what's happening on the buy side. Here's Doha.
Speaker 6: It's this idea of deep power that is exercised on
Speaker 6: the buy side of the market. And this is actually
Speaker 6: very old economics, right. This is a theory that was
Speaker 6: pioneered by Joan Robinson in the nineteen thirties, and so
Speaker 6: there's this idea that buyer power might be harmless. But
Speaker 6: we've known for almost a century empirically that you know,
Speaker 6: if a buyer chooses an in along a supply curve
Speaker 6: and then is able to exercise the power to drop
Speaker 6: the value of that input, maybe in the short run
Speaker 6: you get lower prices or expanded output, but if you
Speaker 6: drop the value below a reservation wage, right, especially when
Speaker 6: you're talking about labor markets, which a lot of producer
Speaker 6: and grower economies you know, are basically labor markets, that
Speaker 6: you will eventually destroy incentives to continue making that input,
Speaker 6: and so in the long run you will actually get
Speaker 6: contraction in a market that is classical monopsony power that
Speaker 6: is empirically sound, and that has been I think upheld
Speaker 6: by a lot of economists for a very long time.
Speaker 6: There is another flavor of monopsony, of course, which is
Speaker 6: just the abuse of bargaining leverage. If you fear termination
Speaker 6: of a contract that your buyer has any negotiated with you,
Speaker 6: if you fear this is the same thing with non compete, right,
Speaker 6: This is the same sort of economic idea that if
Speaker 6: you have lower bargaining leverage, you are likely to do
Speaker 6: everything you possibly can to be more compliant with the
Speaker 6: terms that are imposed by the purchaser of whatever product
Speaker 6: or service that you are selling. And so that just
Speaker 6: maps on almost perfectly with the chicken industry. And what
Speaker 6: is really I think most fascinating in the chicken industry
Speaker 6: and other types of labor markets is that you can
Speaker 6: actually exercise power and abuse bargaining leverage at much lower
Speaker 6: concentration thresholds, which is a really interesting and fruitful area
Speaker 6: of economic research that has been produced over the last
Speaker 6: five to ten years.
Speaker 2: So, armed with that wider definition of competitive pressures, the
Speaker 2: DOJ has gone on the attack. For instance, they successfully
Speaker 2: blocked a merger of the publisher's Penguin, Random Had and
Speaker 2: Simon and Schuster by arguing that the deal would lead
Speaker 2: to lower earnings for authors.
Speaker 3: But the DOJ's results when it comes to chicken have
Speaker 3: been more mixed despite that broader definition of anti trust.
Speaker 3: In twenty twenty, the DOJ indicted executives from poultry processors
Speaker 3: including Pilgrim's Pride and Claxton Poultry Farms for price fixing,
Speaker 3: only to see them acquitted by a jury.
Speaker 2: There have been some wins too. The DOJ got a
Speaker 2: eighty five million dollar settlement with a bunch of poultry
Speaker 2: processors over allegations that they conspired to share information on wages.
Speaker 7: One of the cases we brought involved an information sharing
Speaker 7: amongst chicken processors, and they were sharing incredibly detailed information
Speaker 7: about compensation. And not only were they sharing it, they
Speaker 7: were like meeting every year and eventually bringing their data
Speaker 7: so that they could all be sure that they were
Speaker 7: sharing accurate data and then talking about compensation. So there's
Speaker 7: the example of coordination amongst people who should be competing
Speaker 7: for workers actually figuring out how not to compete with
Speaker 7: each other.
Speaker 2: And last year Coke Food's, a huge poultry processor, agreed
Speaker 2: that it would no longer charge a penalty if contract
Speaker 2: growers choose to switch processors after the DOJ filed suit
Speaker 2: under Sherman and our good friend the Packers and Stockyards Act.
Speaker 7: Another case we brought involved again a specific chicken processor
Speaker 7: who was contracting with and that's already a relationship where
Speaker 7: the processor owns most of the bargaining power, but decided
Speaker 7: that wasn't enough their growers. If you want to switch
Speaker 7: to one of our competitors, we're going to make you
Speaker 7: pay a penalty. So that is the processor preventing competition
Speaker 7: unilaterally by making it harder for the grower to actually
Speaker 7: benefit from whatever competition exists in the market. And it
Speaker 7: is also just simply obviously unfair to these growers who
Speaker 7: don't have that much opportunity by denying them whatever limited
Speaker 7: opportunities exist.
Speaker 3: It's a nice step for critics of the tournament system
Speaker 3: that we talked about in episode two, but there's also
Speaker 3: more that could be done.
Speaker 7: The third case involved the chicken tournament system, right, and
Speaker 7: so One of the things chicken farmers face growing chickens
Speaker 7: is every six weeks when their chickens are picked up
Speaker 7: by the processor, they are actually weighed and measured against
Speaker 7: the other growers that are delivering chicks the same week,
Speaker 7: and it's almost you know, you're directly competing with your
Speaker 7: fellow chicken growers. And some people get penalized and some
Speaker 7: people get a benefit. But given the risk these growers face,
Speaker 7: we brought a case saying the penalty itself makes it
Speaker 7: impossible for growers to really understand the financial risks they're
Speaker 7: taking because there's a lot of arbitrariness in the tournament
Speaker 7: and it's not just your results don't depend on how
Speaker 7: well you perform. And so Wayne Sanderson, who is the
Speaker 7: I believe the third largest chicken processor in the country,
Speaker 7: agreed that they would stop penalizing growers in their tournament.
Speaker 2: System, so another small victory. Meanwhile, the US Department of
Speaker 2: Agriculture this year proposed more regulation of the tournament system
Speaker 2: under you guessed it, the Packers in Stockyards Act. Joe,
Speaker 2: should we make packers in stockyards merch?
Speaker 4: Yes?
Speaker 3: Absolutely, well maybe, but it is kind of interesting to
Speaker 3: think about how two hundred and fifty years ago, Americans
Speaker 3: were all worried about taxes under King George and the
Speaker 3: tyranny of the state. But today maybe we should all
Speaker 3: be worrying about something else, what Dilha calls the tyranny
Speaker 3: of the intermediary.
Speaker 6: Thinking about the chicken industry in particular, you see limits
Speaker 6: on the ability to sell your product or service to
Speaker 6: a small number of companies, And that is how you
Speaker 6: get this problem of the tyranny of the intermediary. It's
Speaker 6: the meat processor that sits in the middle, right between
Speaker 6: the ultimate purchaser and the grower, and can command a
Speaker 6: certain sum or lower the price on one side of
Speaker 6: the market and really grow revenues and get fatter in
Speaker 6: the middle.
Speaker 2: So anti trust has a long history with agriculture and
Speaker 2: the poultry industry, although the way it's being viewed and
Speaker 2: enforced has been changing recently. But that's only one side
Speaker 2: of the story, because even as anti trust evolves, the
Speaker 2: way companies run their businesses has evolved too.
Speaker 3: A lot. When the Sherman Act and the Clayton Act
Speaker 3: and the Packers and Stockyards Act were all created, the
Speaker 3: middlemen of America were smaller and not as technically sophisticated. Obviously,
Speaker 3: if you're going to influence prices, you're probably doing it
Speaker 3: in a back room somewhere, smoking a cigar, probably playing poker.
Speaker 2: But today companies have a host of new data sources
Speaker 2: and tech powered tools to run their businesses. And when
Speaker 2: it comes to Chicken and souped up data sources, we
Speaker 2: have to talk about Agristats.
Speaker 5: We'll say, generally speaking, it's often been referred to as
Speaker 5: the most important, one of the most important companies you've
Speaker 5: never heard of.
Speaker 2: That's Jonathan Canter, the Assistant US Attorney General for Antitrust
Speaker 2: at the DOJ. He's the head honcho Doha and Michael's
Speaker 2: boss basically, and together with Lena Kahan, the chair of
Speaker 2: the Federal Trade Commission, he's been leading one of the
Speaker 2: most aggressive regulatory responses to antitrust in years, decades even, and.
Speaker 3: One of their more recent actions is against Agristads. Now
Speaker 3: onloads listeners will actually have heard of this company before.
Speaker 3: We spoke about it earlier this year with David Dian,
Speaker 3: the executive editor of The American Prospect. He did such
Speaker 3: a good job describing what Agristas does that we're just
Speaker 3: going to let him do it again here.
Speaker 8: And this company collects real time proprietary data from all
Speaker 8: of the meat packing producers in a given market, whether
Speaker 8: it's pulk or pork, or poultry or chicken or turkey.
Speaker 8: And they put all this data in these giant books
Speaker 8: and they give them out to these various competitors, which
Speaker 8: now have basically a setup of everything that their competitors
Speaker 8: are doing, including their price, including their supply, including every
Speaker 8: single thing.
Speaker 7: Part of their market.
Speaker 8: And now they can know that, oh, I can probably
Speaker 8: raise my price because I'm under price relative to my competitor,
Speaker 8: but I won't lose market share because my competitor is
Speaker 8: charging more for this product and it has the tendency
Speaker 8: to ratchet prices upward.
Speaker 2: The DOJ filed suit against Agristats last year, arguing that
Speaker 2: it was violating the Sherman Act by sharing competitive information.
Speaker 2: We reached out to Agristats for comment, however, they didn't respond.
Speaker 2: The company published a statement on its website shortly after
Speaker 2: the lawsuit was initially filed. They're denying the allegations.
Speaker 3: Currently, the case is still live, which means Jonathan can't
Speaker 3: talk about it in detail, but more generally, he argues
Speaker 3: that it illustrates the dominance of intermediarias in the economy.
Speaker 5: So this is a case that we brought involving information exchanges,
Speaker 5: among other things, poultry processors and the idea. And this
Speaker 5: is something that we're seeing in many aspects of our economy,
Speaker 5: is that when large companies share competitively sensitive information using
Speaker 5: often faceless intermediaries, that sharing of information can result in
Speaker 5: higher prices to consumers, but it could also result in depriving,
Speaker 5: in this instance, family farmers and others of a fair
Speaker 5: return on investment.
Speaker 2: So the way companies might share price and market information
Speaker 2: has moved on from those secret deals in dark rooms
Speaker 2: of the past. Now they might do it on a
Speaker 2: platform or through an algorithm, and antitrust enforcement has to
Speaker 2: adapt to this new world.
Speaker 5: This is an issue that we are confronting throughout our
Speaker 5: economy and so the concerns around data sharing and coordinat
Speaker 5: are not new. The antitrust laws enacted initially in eighteen
Speaker 5: ninety have been dealing with this ever since. But what
Speaker 5: we are encountering now is almost a supercharging of data
Speaker 5: sharing and coordination, and so the use of technology and
Speaker 5: intermediaries has created the opportunity for companies to contribute information,
Speaker 5: for example, to a central database or service and have
Speaker 5: that service essentially perform the function of coordinating and using
Speaker 5: that data to help those companies extract higher prices or
Speaker 5: offer lower returns to people who are selling their goods
Speaker 5: and services. In the context of technology, now, something that
Speaker 5: used to be difficult to do because it required Manila
Speaker 5: envelopes of data and spreadsheets and calculators and a lot
Speaker 5: of manual labor is increasingly being outsourced to technology algorithms
Speaker 5: that can take this information and essentially take on the
Speaker 5: pricing or take on competitively sensitive functions of a business.
Speaker 5: And the more that is outsourced to these technologies, these algorithms,
Speaker 5: the more the difficulties that used to somewhat restrict the
Speaker 5: ability of companies to engage in anti competitive coordination. Those frictions,
Speaker 5: those impediments are being lifted and eliminated, and it's going
Speaker 5: to make it easier and more effective. And that is
Speaker 5: a real big concern of ours. And so when we
Speaker 5: think about what does an agreement look like, what does
Speaker 5: information sharing, what does coordination look like? In the year
Speaker 5: twenty twenty four, we have to look at what market
Speaker 5: realities present and market realities today present algorithms doing that work.
Speaker 5: And whether it's an algorithm taking the information, spinning it
Speaker 5: back out and resulting at higher prices, or two individuals
Speaker 5: in a smoke filled room as it might have been
Speaker 5: one hundred years ago, it's the same anti competitive end.
Speaker 5: They're just doing it through different means. And so whether
Speaker 5: it's a handshake, using the postal service and sending mail
Speaker 5: to coordinate, whether it's it's using email or text messages
Speaker 5: or chat or phone, or in today's world, sharing information
Speaker 5: through an algorithm and outsourcing it to AI, it's still
Speaker 5: the same thing. It's coordination, it's price fixing, it's market allocation.
Speaker 5: In the antitrust laws applied just as much now, if
Speaker 5: not more, than they did when they were enacted in
Speaker 5: eighteen ninety.
Speaker 3: So the outcome of the agristatsuit will be very interesting
Speaker 3: to watch.
Speaker 2: But what about changes in the way we raise chickens too,
Speaker 2: Because even if chicken prices come down and labor practices improve,
Speaker 2: there might still be some other poultry related problems.
Speaker 4: One of the most remarkable food miracles is the story
Speaker 4: of Chicken, a triumphle of research on the farm and
Speaker 4: in the marketing system. Once something special for Sunday dinner.
Speaker 4: Chicken inspected and graded is now thrifty every day. Yes,
Speaker 4: in one generation, people of this country have doubled their
Speaker 4: consumption of potun Bomb research has led to the control
Speaker 4: of disease, improvement of breeds, advancement of production marketing research
Speaker 4: has developed low cost methods of mass distribution in processing, storing, handling,
Speaker 4: and packing. And these boxes joined the never ending.
Speaker 3: Technological changes in the way we grow chickens was once
Speaker 3: pitched as a big win for consumers. We talked about
Speaker 3: it in our earlier episode. The introduction of hormones, antibiotics,
Speaker 3: and growth promoters all combined to create a more robust chicken.
Speaker 2: But just as antitrust regulators have started to prepare some
Speaker 2: of the damage wrought by new technologies, consumers have been
Speaker 2: pushing back too.
Speaker 3: We spoke to Marion McKenna, the public health specialist earlier
Speaker 3: in the series, and as she explained it, people's attitudes
Speaker 3: towards let's call them augmented chickens has turned.
Speaker 7: Now.
Speaker 3: The worry is that all that antibiotic use in birds
Speaker 3: might make it more difficult to treat people, and that's
Speaker 3: led to a big change.
Speaker 1: We got really significant change in the United States about
Speaker 1: how antibiotics were allowed to be used in the raising
Speaker 1: of livestock, not legislation, because legislation had been tried on
Speaker 1: this issue back in the nineteen seventies and foiled by
Speaker 1: some congressman with big agricultural interest behind them. What the
Speaker 1: Obama administration did in pretty much their last days in
Speaker 1: office was instead to change some regulations they're technically called
Speaker 1: guidances at the FDA that affected how antibiotics were allowed
Speaker 1: to be labeled. And since the label has the force
Speaker 1: of law for how an antibiotic can be used, that
Speaker 1: actually created significant change. What it basically did was outlaw
Speaker 1: growth promotion. Now, the reason why this happened was first
Speaker 1: because the Obama administration took it on as a cause,
Speaker 1: and second because one of the most power chicken companies
Speaker 1: in the United States produce foods, got behind the change.
Speaker 1: In fact, you could argue led the change in some ways,
Speaker 1: but also there was a consumer movement. And it's kind
Speaker 1: of remarkable to me that given the size of the
Speaker 1: economic forces that we're talking about, this incredibly large trade
Speaker 1: in livestock, that consumer voices were heard, but sets of
Speaker 1: very large buyers, for instance, university medical centers and very
Speaker 1: large public school systems, both of which are feeding like
Speaker 1: vulnerable children or feeding vulnerable patients. Said to essentially their wholesalers,
Speaker 1: we don't want any more to buy chicken that was
Speaker 1: raised with routine use of antibiotics, because if there is
Speaker 1: resistant bacteria on this meat, it is going to endanger
Speaker 1: people whom we're feeding. And that led both the companies
Speaker 1: and the regulators to understand that if they stepped out
Speaker 1: and made these changes, there was an audience and a
Speaker 1: market waiting for them, and someone, to everyone's shock, the
Speaker 1: change actually happened. So in the last days of the
Speaker 1: Obama administration, it became no longer possible to use growth
Speaker 1: promoters in the United States.
Speaker 2: Because, of course, chicken isn't just about prices and wages.
Speaker 2: It's about lives too. We eat a lot of chicken
Speaker 2: meat and we want it to be good for us. Meanwhile,
Speaker 2: the use of antibiotics has gone hand in hand with
Speaker 2: crowded chicken houses and factory farming.
Speaker 3: Is Marin mentioned. Perdue, the fourth largest poultry company in
Speaker 3: the US, got on board with the change. Even eight
Speaker 3: years later, it says it's still committed to quote no
Speaker 3: antibiotics ever, in its flocks. Some other companies have backtracked,
Speaker 3: though Tyson, for instance, has dropped its no antibiotics label,
Speaker 3: though it says it's only using drugs that aren't important
Speaker 3: to human health.
Speaker 2: In twenty twenty four, however, there is something else to
Speaker 2: worry about when it comes to chickens collective impact on
Speaker 2: human health, bird flu.
Speaker 1: Bird flu has been coming back to the United States
Speaker 1: and being found not just in migrating wild birds and raptors,
Speaker 1: for instance, but also in domesticated birds. And when avian flu,
Speaker 1: which is incredibly pathogenic to birds, gets into a very
Speaker 1: large scale chicken operation, whether that's turkeys or broilers, meat chickens,
Speaker 1: or laying hens egg chickens, the results are incredibly dramatic.
Speaker 1: Entire farms can be wiped out, and those farms may
Speaker 1: be very large. Egg farms can have more than a
Speaker 1: million chickens on them easily, and so it's a significant
Speaker 1: concern that this flu keeps on, sort of like knocking
Speaker 1: at the window of our agriculture and finding ways inside.
Speaker 2: You may remember this virus from such inflame sationary events
Speaker 2: as the twenty twenty three egg price spike, which was
Speaker 2: caused in part by the culling of millions of hens
Speaker 2: because of bird flu, as we discussed in the first
Speaker 2: part of this series.
Speaker 1: So over the past couple of years, it's become very
Speaker 1: clear out in the wild world that this avian strain
Speaker 1: of flu, avian flu H five N one also can
Speaker 1: affect mammals. It had a really profound effect on several
Speaker 1: collections of mammals living by ocean sides, like sea lions,
Speaker 1: for instance, in South America. But I think it was
Speaker 1: kind of a shock for people to realize that somehow
Speaker 1: this flu had made a sufficient adaptation that it could
Speaker 1: affect cows.
Speaker 2: Did you hear that bird flu is now found in cows.
Speaker 2: That's your chicken sandwich and your milkshake.
Speaker 1: And now avian flu H five to one has been
Speaker 1: found in primarily in dairy farms up and down the US.
Speaker 1: It may well be in other types of cattle raising
Speaker 1: as well. It happens that on dairy farms, first workers
Speaker 1: are pretty face to face with the cows fairly often,
Speaker 1: and second they interact with the cows fairly often because
Speaker 1: the cows have to be milked regularly, and so that
Speaker 1: flu caned sicken cows and can cross from cows to
Speaker 1: humans has become visible on dairy farms in a way
Speaker 1: that I think no one really expected and that has
Speaker 1: taken us by surprise.
Speaker 3: At the time we're recording this, the Center for Disease
Speaker 3: Control and Prevention is confirmed that healthcare workers in Missouri
Speaker 3: got sick if they're nursing a patient who is infected
Speaker 3: with bird flu. It's not yet clear how they got it,
Speaker 3: but it is a reminder the chicken might end up
Speaker 3: being ground zero for another pandemic too. It's probably a
Speaker 3: stretch to say that the US economy, whether it's inflation, wages,
Speaker 3: quality of life, etc. Rests on how we grow, treat,
Speaker 3: and sell its chicken. But like there's a lot there,
Speaker 3: it contains multitudes.
Speaker 2: Chicken does contain multitudes. When demand goes up and supply
Speaker 2: chains and labor markets get upended, whether it's from disease
Speaker 2: or climate disaster, chicken prices go up too, adding to
Speaker 2: overall inflation, and companies might push price in that scenario
Speaker 2: to make up for lost volumes, which also adds to inflation.
Speaker 3: And chicken on the way birds are raised could be
Speaker 3: the source of another major pandemic, one that could cause
Speaker 3: a lot of disruption yet again, and the.
Speaker 2: Tournament system has a lot to say about the balance
Speaker 2: of power between big companies and platforms and the people
Speaker 2: who rely on them. Plus, chickenization is on the march
Speaker 2: more broadly, making its way into pig farming and other
Speaker 2: parts of American agriculture.
Speaker 3: In the meantime, the intense concentration in the poultry industry
Speaker 3: has captured the attention of regulators and prompted some action
Speaker 3: on things like price sharing, but with mixed results so far.
Speaker 2: For them, chicken is really important because it's not just
Speaker 2: about lost or lower earnings for farmers. It's also about
Speaker 2: what happens after that. Here's Jonathan Canter from the DOJ again.
Speaker 5: If you look at the aggregate data, our country has
Speaker 5: lost more than one hundred thousand farms between twenty eleven
Speaker 5: and twenty eighteen. This farmer's share of the retail food
Speaker 5: dollar used to hover around forty percent. Now it's down
Speaker 5: to about fourteen. We've got four companies that control eighty
Speaker 5: five percent of the corn seats market. We have three
Speaker 5: manufacturers that control ninety five percent of equipment production and maintenance.
Speaker 5: We have four companies that control over eighty percent of
Speaker 5: beef packing, and we have a small number of significant
Speaker 5: packers that control poultry, including chicken. The changes that have
Speaker 5: occurred in our economy around these industries and the consolidation
Speaker 5: the concentration are alarming and often are one of the
Speaker 5: reasons why it is important that we remain vigilant and
Speaker 5: focus on forcing the law when the facts and the
Speaker 5: law demand it. But it affects the local community. It
Speaker 5: affects the ability of people to maintain their way of life.
Speaker 5: It affects the bookstore, It affects the independent pharmacy. It
Speaker 5: affects the survival of the local hospital. It affects the
Speaker 5: local bank, which is important to providing capital to local
Speaker 5: businesses who want to build. These are pillars of our
Speaker 5: rural communities, which are in turn the lifeblood of our economy.
Speaker 5: And if we're not investing in preserving a competitive economy
Speaker 5: that provides opportunity for our family farmers to thrive and
Speaker 5: build and maintain and sustain those small businesses hand them
Speaker 5: down from generation to one another, we are not only
Speaker 5: doing a disservice to our family farmers, but we're doing
Speaker 5: a disservice to our rural communities at large. And that
Speaker 5: is a significant problem, and it is why these cases
Speaker 5: are so important.
Speaker 2: So there you have it. Chicken can be an engine
Speaker 2: for economic growth too, and when farmers can't make enough
Speaker 2: money producing it, whole communities might suffer. Chicken can influence
Speaker 2: entire towns, counties, states, and economies.
Speaker 3: So the next time you eat a delicious chicken sandwich,
Speaker 3: or a hard boiled egg, or even a nugget, we
Speaker 3: hope you'll think about the bigger economic picture. The Chicken Represents.
Speaker 2: Beat Capitalism is written by Tracy Alloway, Carmen Rodriguez, and
Speaker 2: Joe Wisenthal.
Speaker 3: This short series was produced and edited by Carmen with
Speaker 3: the help of kil Brooks and Dashel Bennett.
Speaker 2: It was also fact checked by Dash and Kale.
Speaker 3: Blake Maple's chickenized our Odd Lots theme and mixed this
Speaker 3: episode too.
Speaker 2: Brendan Newnham is our executive producer, and Sage Bauman is
Speaker 2: Bloomberg's head of Podcasts. If you enjoyed this three part
Speaker 2: deep dive into the chicken industry, please consider leaving a
Speaker 2: positive review on your favorite podcast platform. Thanks for listening.
Speaker 2: Thanks