RENEE MONTAGNE, HOST:
A trip to the grocery store offers what appears to be an abundance of chicken choices - from patties to pot pie, tenders to Cornish hens. The selection can almost be overwhelming. But you can count on just one hand the number of food companies producing those choices.
In his new book, "The Meat Racket," author Christopher Leonard investigates the handful of companies that have taken control of the meat supply, focusing especially on Tyson Foods. Behind that household name was a man Leonard calls a genius, Don Tyson.
CHRISTOPHER LEONARD: Don Tyson had the ability to see the world as it did not yet exist. And the most important thing he saw, back in the 1960s, was that chicken would soon replace beef or pork as the most popular meat in the United States.
MONTAGNE: The idea was not common wisdom at the time. Up until the 1940s, chicken was reserved for special occasions.
LEONARD: It was a specialty meat. It's what you would cook for a nice Sunday dinner. Back then, you would typically cook a whole bird. It was a luxury item. I mean, when people talked about having a chicken in every pot, that was sort of a marker for affluence. But that really changed in the '40s and '50s, when these farmers in the South figured out how to raise chicken more efficiently.
MONTAGNE: Well, you refer to raising chickens, especially in the early days, as a casino.
LEONARD: Yeah, absolutely. The market was very volatile. When supply outstripped demand even by a little bit, the price of chicken would just drop through the floor. And it was hard to gauge production exactly right.
MONTAGNE: Well, this has to do with the fact that with a cow, you're talking anywhere from many months to a couple of years. I mean, you can raise a chicken and get it ready to be slaughtered in six weeks.
LEONARD: That's right. You can almost respond to the market in real time with a chicken. And in the early days, that's exactly what the industry looked like - this boom-and-bust-type cycle of people seeing good prices, ramping up production, creating an oversupply; and then prices would fall again.
MONTAGNE: So this is what the Tysons - John Tyson and son Don Tyson - figured out, that other companies copied - or tried to copy, but that they helped start; this idea that you had to count for this volatile market in the chickens themselves by doing what?
LEONARD: Well, this company, Tyson Foods, started in John Tyson's living room in the 1930s in rural Springdale, Ark. This was a hard place. Don Tyson did not grow up rich. And one thing he focused on relentlessly was keeping down costs - because what he learned was that the market would get good, and everybody would jump in and companies would get fat, and everybody made a lot of money but inevitably, the market would crash again. And the companies that survived were the low-cost producers.
MONTAGNE: OK. Nice thought. I suppose everybody, in a way, thought that. What Don Tyson figured out to do was to buy up every stage of production, even including the eggs that created the chicks. They had the feed. They had the slaughterhouses. They had the delivery systems. But the one thing they chose not to own were the farms. Why, exactly? Give us a little economics lesson here.
LEONARD: First of all, you have to have a lot of land to have an industrial chicken complex. I mean, farm is kind of a bad word for these meat factories - is really what they are. They're these giant, automated warehouses that can hold maybe 25,000 or more chickens at a time. And Tyson Foods realized that it was kind of a rotten investment to build chicken farms.
So Tyson developed a system over time, that's really called contract farming. And here's how it works: A person in a small town will borrow hundreds of thousands, or even millions, of dollars from the local bank. They'll build a giant industrial footprint of chicken houses; and then they sign a contract with Tyson Foods, which will deliver the chickens to their farm, deliver the feed to their farm. And the farmer grows the birds to Tyson's exacting specifications.
MONTAGNE: Well, you describe the system - which, by the way, is not exclusive to Tyson - as something close to modern-day sharecroppers.
LEONARD: That's exactly what it is - a high-tech form of sharecropping. And the farmers in this kind of contract system have almost zero autonomy over their operations. They can't control the quality of the chicks that arrive. They can't control the quality of the feed. When things go wrong, they depend on Tyson Foods to tell them what goes wrong. But you point to a critical outcome of this, which is that the farmers do not keep the majority of the income from their farm.
MONTAGNE: But how many other companies in the meat industry follow this example?
LEONARD: Just three firms produce almost half the chicken in the United States. Back in the '70s, you know, nearly 40 companies controlled that much of the market. So what that means is, these companies act as regional monopolies. You can go to any chicken town, and you'll find that a farmer will have a choice between one, maybe two, chicken companies to sign a contract with, if they're lucky. So that's one of the key reasons why the terms of these contracts have become less and less advantageous to farmers over time.
MONTAGNE: I mean, isn't the beauty of this system, though, that the chicken's cheaper, and that's a good thing for consumers?
LEONARD: No, it's not. (Laughter)
LEONARD: Chicken is not cheaper today. Meat prices have been rising very fast since 2008.
MONTAGNE: But chicken, not as much as other kinds of meat, right? And also, wouldn't it have gotten more expensive if this industry wasn't so centralized?
LEONARD: Chicken is relatively cheap today. It's cheaper than it was many, many decades ago, even though it's at nominal record-high prices right now. But you're right, the American food system is a technological marvel. I mean, it does an incredible job at giving us meat that is more or less safe, at a predictable price, that's relatively cheap to our incomes.
But I can say, chicken would be cheaper today if this industry was not so consolidated. You've got these giant companies whose reach spans out across 22 percent of the entire market. So a single company can cut its production and keep prices higher than they would be. A highly consolidated and monopolistic industry is not good for consumers.
MONTAGNE: I wonder how difficult it is for any person to opt out of the system; to steer clear of buying and eating meat produced by these enormous meat companies.
LEONARD: I have concluded that the only way to truly opt out of the system is to become vegetarian. If you're eating meat today, unless you know the farmer and that's the only meat you eat, you're participating in this industrial system. All of the unlabeled meat that is served in our restaurants, cafeterias, hospitals, at the grocery store - it all comes from industrial companies. And so I think we need to take a hard look at this system that delivers most of our meat to giant cities seven days a week, 52 weeks a year.
MONTAGNE: Thank you very much for joining us.
LEONARD: Thanks so much for having me.
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MONTAGNE: Christopher Leonard is the author of the new book "The Meat Racket." We reached out to Tyson Foods before our interview, and you can find their written statement at NPR.org.
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