The Meat Racket
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The Meat Racket

The Secret Takeover of America's Food Business

Christopher Leonard

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eBook - ePub

The Meat Racket

The Secret Takeover of America's Food Business

Christopher Leonard

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An investigative journalist takes you inside the corporate meat industry—a shocking, in-depth report every American should read. How much do you know about the meat on your dinner plate? Journalist Christopher Leonard spent more than a decade covering the country's biggest meat companies, including four years as the national agribusiness reporter for the Associated Press. Now he delivers the first comprehensive look inside the industrial meat system, exposing how a handful of companies executed an audacious corporate takeover of the nation's meat supply.Leonard's revealing account shines a light on the inner workings of Tyson Foods, a pioneer of the industrial system that dominates the market. You'll learn how the food industry got to where it is today, and how companies like Tyson have escaped the scrutiny they deserve. You'll discover how these companies are able to raise meat prices for consumers while pushing down the price they pay to farmers. And you'll even see how big business and politics have derailed efforts to change the system, from a years-long legal fight in Iowa to the Obama administration's recent failed attempt to pass reforms.Important, timely, and explosive, The Meat Racket is an unvarnished portrait of the food industry that now dominates America's heartland.

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How Jerry Yandell Lost the Farm1
KANITA YANDELL was waiting for the men to come and clean out the carcasses so her family’s farm could die in peace. And the men showed up, eventually, arriving in a caravan of trucks emblazoned with the red oval TYSON logo. The men got out and milled around next to the long chicken houses that had been emptied out earlier. Kanita didn’t become afraid until she saw them donning the blue plastic suits: big, baggy plastic suits with bulging helmets that swallowed their heads. They were dressed like men who handle nuclear waste. And they did this to enter the chicken houses where Kanita had worked with her sons just days before, laboring long hours shuttling in and out with wheelbarrows and buckets full of rotting chickens. Days and days her family had worked in there, breathing the air, grabbing the piles of hot dead birds and gathering them up to take outside.
When Kanita saw the men wearing blue moon suits, she returned to her house to grab her camera, and she photographed the men as they worked.
The chicken houses sat side by side on a grassy plateau, just east of Waldron, Arkansas. The Ouachita Mountains rose up behind them like a green wall. The houses were long and squat and their walls were studded at regular intervals with round silver fans that ventilated them during the summer months. At the back end of each house was a big bay door that could slide open like a loading dock. These doors were where the men in blue moon suits entered and left.
Kanita had called the Tyson plant again and again, for months, begging them to come, demanding help, asking for explanations. She and her husband, Jerry, had been raising chickens for two decades, since they were teenagers, and they’d never been through anything like the last six months. It was a strange disease, or an industrial accident, or both. It was something gone wrong on a grand scale, something that got worse and worse, and something they didn’t understand and couldn’t stop. The birds were simply dying. Dying just hours after they arrived by the hundreds, and not from some ordinary flu. It seemed like they had started rotting even while they were still alive. She and Jerry worked ten-hour days, seven days a week, and even enlisted their sons to help. Their labor seemed to do nothing but dig them deeper and deeper into debt. But the Yandells had no choice but to continue working. Their home, their farm, and their livelihood depended on whether the birds lived or not.

About every eight weeks, a Tyson truck delivered birds to the Yandell farm. A crew of men unloaded crates of baby chicks, each worker filing into the barn and dumping the birds in neat rows on a fresh bed of litter. Jerry’s and Kanita’s job was to raise the tens of thousands of birds, keeping them fed and watered and warm and fattening them up until Tyson returned six weeks later to collect them for slaughter. It was a routine the couple knew well, one that defined the rhythm of their twenty-six-year marriage and the lives of their three boys.
It was a routine that collapsed in the fall of 2003, when the birds started dying overnight in great piles. Jerry and Kanita hadn’t seen anything like it. Tyson field technicians visited the farm and looked inside the plastic freezers full of limp white carcasses. They told the Yandells to turn up the heat, turn on the fans, and give the birds more water.
Kanita walked through the houses and picked the rotten birds off each other. Their bodies were like soft, purple balloons by the time she gathered them. They fell apart to the touch, legs sloughing off the body when she tried to pick them up. It was like they were unraveling from the inside at a heated speed. She walked along the floors of the cavernous barns and put the gelatinous pieces of the dead chickens into buckets, looking at the pink featherless chests that were blooming with the colors of a violent bruise, like fruit in the sun. She started wearing gloves, and she made her sons wear masks. She kept calling the Tyson field men, asking them to come and inspect the buckets full of liquefying birds.
But the Tyson men never had answers, only more instructions. Turn up the fans; keep the heat higher. Salt the ground between flocks and clean out the litter. It’s got to be a problem with your chicken houses, they said. But Kanita knew different. Rumors spread in town; she heard secondhand from other farmers that they were seeing the same strange disease in their own chicken houses. The birds all came from the same Tyson hatchery, so there must be a problem there, the neighbors speculated. But the field techs would never say.
Around Christmas, Kanita and Jerry realized it didn’t matter. Whatever it was that burned through the chickens, it had eaten their livelihood as well. They had taken on more than $260,000 in debt to build the chicken houses and they had borrowed thousands more to buy propane to heat them this winter. Still, the sickness wiped out the birds. And the dead birds wiped out their paycheck. This would be the last flock and the end of their farm. The end of their home.
So the crew of Tyson men came to gather the last flock. They only picked up the birds that were still alive, birds that Kanita knew would be dead in a few hours anyway. They loaded them onto the truck to ship to the slaughterhouse where they’d be quickly transformed into chicken nuggets and frozen breasts. But the crew left a litter of carcasses behind, and freezers still stuffed with dead birds. So Kanita called the plant and demanded they come clean out the houses. She was still naive enough then to hope that she and Jerry might be able to stave off bankruptcy and sell the farm. So she wanted the chicken houses to be clean.
And that’s when the men in blue suits arrived and terrified her. She and her sons had worn gloves, and many times facemasks, when they were cleaning out the houses. But not always. The hours were too long; the work was hot and sweaty. Sometimes they’d slipped off the masks, dropped the gloves, and kept working. Now she wondered what they had been breathing, and what they’d held in their hands.
The Tyson field men had told her it was safe. They told her it was nothing to worry about.2
And now here they were in plastic suits, as if fending off a plague.

The struggles on Jerry Yandell’s farm could be observed on blinking computer screens inside the offices of Tyson Foods. Employees inside Tyson can look at operations on the farms that supply the company as if with an X-ray. Tyson can measure the profitability of every square foot of space under a farmer’s control, gauging how much weight the birds gained given the precisely measured amount of feed, water, and medicine Tyson provided. Tyson employees create graphs of each farm’s profitability to see in real time how efficiently the farmer transforms feed into fatter chickens. The information is aggregated on computer servers at Tyson Foods’ headquarters in Springdale, Arkansas, where engineers search through the vital statistics from farms stretching through Georgia to Delaware to Arkansas. Tyson’s headquarters is the real seat of power in the new, vertically integrated meat industry.
To understand how vertical integration works, and how it controls the livelihoods of people like Jerry and Kanita Yandell, it is helpful to tour the wide expanse of concrete on the north side of town in Waldron, Arkansas. This concrete plain is the Tyson Foods plant. It is the heart of the city, its economic lifeblood and the reason for Waldron’s existence.
The Tyson plant is a self-contained rural economy. Within its fenced confines are a slaughterhouse, a feed mill, a food-processing factory, a trucking lot and maintenance shop, administrative offices, a railroad spur, and a sewage plant. Decades ago, a big meat-producing town like Waldron—which pumps out millions of pounds of chicken products each week—might have contained a small network of businesses that supported and thrived from the local meat industry. There might have been several hatcheries that provided baby chicks to farmers, one or two slaughterhouses to kill the birds when they were grown. Feed mills would have mixed raw grains into chicken food to sell to local farmers, and local trucking companies would have hauled the feed and the birds between factories and the scattered farms where chickens were raised.
Under Tyson, all these businesses have been drawn onto one property. The company controls every step of meat production, with each aspect being centrally directed from the company’s headquarters in Springdale. The company’s control spans the lifetime of the animals it raises. Before there is a chicken or an egg, there is Tyson. The company’s geneticists select which kinds of birds will be grown. They breed and crossbreed the avian bloodlines to engineer meaty breasts and rapid metabolism in the same way automobiles are first cut from clay, then engineered on a drafting board before they’re built. The birds begin their brief life at the Tyson plant, within the heated hive of its industrial hatchery. The company produces more than two billion eggs a year, but none of them are sold to consumers. They are all hatched inside the company’s buildings and the chicks are transported in Tyson trucks to Tyson farms. The Tyson trucks retrieve the birds six weeks later, bringing them back to the plant, where the chickens are funneled into chutes in the side of the slaughterhouses and hung upside down on hooks and decapitated before they travel down a disassembly line, where workers in hairnets and white aprons cut them apart by hand. The meat is battered, cooked, and frozen, then sealed inside airtight bags and piled in vast freezing rooms. The bags are loaded onto Tyson trucks and taken to grocery stores, cafeterias, hospitals, and restaurants around the country. From its conception until its consumption, the bird never travels outside of Tyson’s ownership and control. The company collects every penny of profit to be made along the way because it owns every step in the process. The feed dealer or local trucker or slaughterhouse owner doesn’t complain about the arrangement because he simply doesn’t exist anymore. The money stays inside the system, with the surplus handed over to the company’s shareholders.
There is one link in the chain that Tyson has decided not to own, one part of the rural economy that the company has pushed far outside the limits of its property. While most businesses are drawn steadily into the integrator’s body, the force of gravity has been reversed when it comes to the farms. The farms are exiled, shoved away, and dumped from the balance sheet.
The reason for this is simple, even if it has been kept secret from people like Jerry Yandell. During the 1960s, Tyson Foods realized that chicken farming was a losing game. When Tyson executives examined operations at the company, they saw that farming was the least profitable, and most risky, side of the business. When they looked to invest in the future, they decided not to invest in farms. One of the people privy to those discussions was Jim Blair, who for decades was one of the company’s top attorneys.
“You need to allocate whatever capital you have where it produces the most return on your investment. Owning the land itself wasn’t in that category,” Blair explained. The company was more interested in the new equipment being developed for slaughterhouses. Buying just one of the big steel machines could cut out the need for hundreds of hours of labor. Other contraptions could automatically turn raw chicken meat into sliced and breaded chicken tenders, which magically doubled or tripled the product’s profit margin.
“That isn’t true, of course, in a four-hundred-by-forty-foot-wide chicken house. You can’t crowd the chickens in. [When] there’s too much chickens you create disease and you lose efficiency. You can’t keep a curve on the growth of production in the chicken house,” Blair recalled.
The economics of chicken farming was stubborn, and new technology wasn’t changing it. Companies were inventing new ventilation systems, new vaccines, new feed lines that whirred automatically to deliver food around the clock. But this was just an incremental boost of efficiency and profitability.
“There were never any huge leaps,” Blair said.
So Tyson plowed its capital into the slaughterhouses, where new dollars bought new machines that cut production time and fattened profit margins. The least profitable part of the business was left to the contract chicken farmers, who quickly learn how much of their money it takes to do the job.
Modern chicken houses are the length of several football fields and as wide across as a gymnasium. They are wired with automatic feeders, ventilation systems, watering lines, and thermostats, all of them controlled from a centralized computer system and command room off the side of the chicken house. Each house costs hundreds of thousands of dollars to build, and acres of property are needed to dispose of the waste they produce each month. Between the industrial barns and the land, a single complex can cost north of two million dollars to build. And hundreds of complexes must be in continual operation to support a single Tyson plant.
Farmers take out bank loans to finance the operations, and rural banks have become proficient at helping the farmers become indebted. The banks have learned to break down a farmer’s debt payments into a schedule that perfectly coincides with the life cycle of a flock of chickens. The farmer pays the bank every six weeks or so, just when his paycheck arrives from Tyson. In many cases Tyson cooperates with the bank and draws the loan payment from the farmer’s pay, directly depositing it into the bank. So with every flock, the farmer is racing against his debt, hoping the birds Tyson delivers will gain enough weight to earn a payment that will cover the mortgage and bills for electricity, heating fuel, and water.
Tyson has offloaded ownership to the farms, but it maintains control. The company always owns the chickens, even after it drops them off at the farm; it doesn’t sell baby chicks to the farmer and buy them back when they’re grown. So the farmer never owns his business’s most important asset. Tyson also owns the feed the birds eat, which is mixed at the Tyson plant according to the company’s recipe and then delivered to the farm on Tyson’s trucks according to a schedule that Tyson dictates. Farmers are accustomed to the big white feed trucks with the TYSON logo on their side arriving unannounced to refill the steel feed tanks that jut from the top of the houses like blunt horns. Tyson dictates which medicine the birds receive to stave off disease and gain weight, and Tyson field veterinarians travel from farm to farm to check the birds’ health.
Tyson also sets the prices for its birds. When the chickens arrive at the slaughterhouse, Tyson weighs them and tallies up how much it owes the farmer on a per-pound basis. When that price is determined, Tyson subtracts the value of the feed it delivered to grow the birds. This determines a rough payment for the farmer. But the farmer isn’t paid this flat fee. Instead, final payment is based on a ranking system, which farmers call the “tournament.” Tyson compares how well each farmer was able to fatten the chickens, compared to his neighbors who also delivered chickens that week.
The terms and conditions of Tyson’s relationship with its farmers are laid out in a contract the farmer signs with Tyson. This contract is the single most important document for a farmer’s livelihood. It ensures the steady flow of birds a farmer needs to pay off utility bills and bank debt. But for all their importance, the contracts are usually short and simple documents. While a farmer’s debt is measured in decades, the contracts are often viable for a matter of weeks and signed on a flock-to-flock basis. Farmers certainly have the right to negotiate terms when the contract is laid out on the hood of a Tyson truck that has arrived to deliver birds, but most often they do not. They accept the terms and sign. The contracts reserve Tyson’s right to cancel the arrangement at any time.
Farmers like Jerry Yandell, who are only called “farmers” for lack of a better word, don’t usually pay attention to the fine print of their contracts. They know it doesn’t matter anyway. The power arrangement is set by Tyson, and the farmer learns the rules quickly enough, whatever the documents might say. Vertical integration gives companies like Tyson the kind of power that feudal lords once held. The company can cancel a farmer’s contract and put him out of business. And with its control over all aspects of farming, Tyson Foods can ensure that it gets as much profit as possible out of the process, squeezing farmers who know they can’t fight back.

Jerry Yandell knew how to work.
He grew up in the wooded hills of Scott County, Arkansas, outside the town of Waldron, where daily life was directed by the hungry task of finding work. Men found jobs in town when they could, or out in the countryside, where they hauled timber or raised cattle or grew whatever crops they could in the sparse red soil. Jerry’s dad made a living hopscotching from one job to the next. Mostly he hewed r...

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