The Meat Racket: The Secret Takeover of America's Food Business by Christopher Leonard

Author:Christopher Leonard [Leonard, Christopher]
Language: eng
Format: epub, azw3, pdf
Tags: Business & Economics, Food Indistry, Nonfiction, Retail
ISBN: 9781451645811
Amazon: 1451645813
Barnesnoble: 1451645813
Publisher: Simon & Schuster
Published: 2014-02-18T05:00:00+00:00

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By the mid-1990s, Bob Allen and his neighbors were getting better at their jobs. They steadily increased the number of piglets they could get from each sow, creating a steady traffic of hogs to Tyson’s nursery, where the animals were sorted and then shipped off to farms for fattening.

Though Allen and his neighbors could not see it, the pigs they were raising and sending out to contract farmers had an invisible effect on the entire national hog market. It was an effect that was poorly understood at the time it occurred, and it became visible only with the benefit of hindsight.

The hogs that were born in Oklahoma, raised in Arkansas, and slaughtered in Marshall, Missouri, never encountered an open, competitive cash market. They were moved through the supply chain under contract, owned the entire time by Tyson Foods. As contract hog farming became more prevalent, it meant that a smaller and smaller proportion of pigs were sold on open markets, at the kind of roadside sales barns where buyers and sellers haggled over an animal’s price.

This caused a surprising shift within the hog market. Each 1 percent gain in the proportion of pigs sold under contract created a 0.88 percent drop in the price of hogs that were sold on the cash market. In other words, the rise of contract farming came at the direct expense of the independent cash market for pigs. Each hog that Bob Allen delivered to the Tyson nursery helped lower the overall price for pigs on the open market. Each contract a hog farmer signed sucked one more breath of oxygen out of the cash market upon which farmers like Chuck Wirtz depended.

This created a new center of gravity within the hog industry. Each new contract farm made it that much harder to survive as an independent farmer. This wasn’t just a case of big farms driving out the little farms. Even if an independent farmer owned enormous hog barns and used the exact same high-tech methods to raise his pigs, he was at a disadvantage solely because he sold his pigs on the open market.

No one realized this was happening at the time, but people like Bob Allen might not have cared anyway. He had worries of his own.

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