America loves chicken, but what do we know about the industry behind it? First we learned about how they abuse workers–now we’re hearing about how they’ve possibly been harming consumers.
America’s most popular meat has been in the media a lot lately, and it’s not good news. Mostly, it’s been about the mistreatment of workers: from denying breaks to use the bathroom, to government investigations that have resulted in companies like Tyson Foods and Pilgrim’s being cited for harming their workers by repeatedly violating crucial health and safety regulations.
Now there’s a new story that shows how the poultry industry’s relentless pursuit of profits may be affecting another group of people: chicken consumers. (Which is a lot of people; Americans eat an average of 90 pounds per capita every year.)
A series of lawsuits filed last month allege that more than a dozen of the nation’s largest poultry companies have been conspiring together to artificially inflate the price of chicken — for the last eight years. This includes the four biggest companies who are the focus of Oxfam’s poultry worker campaign: Tyson Foods, Pilgrim’s, Perdue and Sanderson Farms.
The result of this alleged conspiracy? According to Bloomberg, “You’ve been paying 50 percent more for that supermarket rotisserie bird.”
The proof is in the numbers. For years, chicken prices followed the same up and down pattern as other commodities: higher demand leads to higher prices, before oversupply brings prices back down. But in 2008, that began to change, as you can see in the chart: starting in 2008, the price of chicken has been rising steadily.
The lawsuits claim that the steady rise is due to the fact that the poultry companies began working together to keep supply low. They would reduce numbers by “killing their birds early, shipping more eggs, and buying one another’s products.” The lawsuit details how, in the span of one year, poultry companies began using similar language about the need to cut production, and then almost simultaneously announced production cuts; just a few months later, chicken prices began rising. As one analyst puts it, “big companies like Tyson began pointlessly purchasing competitors’ chickens, exporting eggs to Mexico, and even using a data service called Agri Stats that let them monitor each other’s chick breeds, average bird sizes, and production numbers.”
Oxfam reached out to all four of our poultry company targets for comments on the lawsuit. Tyson responded by saying: “We dispute the claims made in this complaint and will defend ourselves in court.” Perdue responded that they do not comment on pending litigation. The two other companies did not respond.
The ability of poultry companies to control the market like this is not news for anyone familiar with journalist Chris Leonard’s groundbreaking book The Meat Racket. Leonard tells the story of our modern meat industry by exploring the rise of one of its biggest players, Tyson Foods. He details how consolidation and vertical integration in the meat industry have essentially eliminated competition and increased control, giving companies leverage to set production levels and raise prices almost at will.
“From these computers (at Tyson headquarters), it was determined how many chickens would be raised in a network of farms that stretched from Missouri to Georgia. It was determined what breed of chicken would be raised to provide Americans their poultry…with a few strokes on their computer keyboards.”
In our report released last year, Lives on the Line, Oxfam detailed how the poultry industry has built a business model focused on increasing profits at the expense of America’s 250,000 poultry processing workers. Profits are soaring and executive compensation is skyrocketing: Tyson Foods announced profits of over $1 billion last quarter and their CEO made over $12.6 million in 2015. Compensation for top Sanderson Farms executives doubled from 2011 to 2015 (from $5.18 million to $10.34 million).
Meanwhile, workers we have met speak passionately about poultry companies treating them like machines and pushing them beyond their limits. Poultry workers earn near poverty-level wages, whose value has declined 40% in the last thirty years, and have few benefits like paid sick time. They work in dangerous environments, facing preventable safety violations due to companies not providing adequate training, protective equipment, or even proper medical attention. OSHA health and safety investigations have found “serious” and “repeated” violations.
Workers in the plants are not the only ones who’ve paid a high price for poultry companies seeking to maximize profits. From the start, the companies have been careful to outsource the part of the chicken production process with the most volatility–the growing of chickens. Leonard, among many others, has exposed how poultry companies “keep farmers in a state of indebted servitude, living like modern-day sharecroppers on the ragged edge of bankruptcy.”
Now, we can add one more population to those who are taking a hit in the poultry industry’s drive for ever-increasing profits: consumers. It’s possible we’re all paying higher than necessary prices for the chicken we eat. But while the companies reap billions in rewards, they’re doing little to reinvest in the workers and farmers who make this wild success possible.
It appears that the news about price fixing is one thing that is finally making a dent in the industry’s standing, and in Wall Street’s estimation of value. Tyson’s shares “tumbled” shortly after news of the lawsuit broke. However, few days after the price drop, one analyst raised the stock rating, calling the class-action complaint “baseless.”
When we launched our campaign last year, Oxfam outlined a series of cost-effective steps the industry can take to improve conditions for their workers. It’s time for everyone– consumers, workers and advocates– to come together and hold the industry accountable.
No one should have to pay such a high price for our food. Not workers, not consumers. The industry can and should share the enormous bounty of a healthy and productive system.
Last year, Oxfam America launched a campaign that aims to improve the lives of the roughly 250,000 poultry workers in the US. They earn low wages, suffer high rates of injury and illness, and often work in a climate of fear. For information about the challenges facing poultry workers, please explore our interactive site, Lives on the Line, sign the petition, or read our full report.