The nation's farmers in general and poultry producers in particular are quickly wising up to President Donald Trump's claims that he's for the little guy.
It's fair to say that POTUS has sold out the nation's livestock farmers. POTUS promised to restore farm prosperity and “drain the swamp”. Producers hoped the White House would end the financial death grip that Big Ag has held on their farming operations, especially in the livestock sector.
The Packers and Stockyards Act of 1921 was supposed to protect the family farmer from the misdeeds and abuses of Big Ag. The act prohibited meatpackers from essentially ripping off farmers through price manipulation, creation of monopolies and deceptive practices.
Needless to say Big Ag chaffed at the Act's provisions and took their frustrations to whomever would listen – notably the Justice Department, the Federal Trade Commission and USDA.
All that angst bore fruit.
The Act was supposed to prevent monopolies, but between 1986 and 2016 market share for the nation's top four chicken producers – Tyson Foods, Pilgrim’s Pride, Sanderson Farms and Perdue Farms – rose from 34% to 50%. Toss in the fifth largest chicken company, Koch Foods, and market share increases to 61%.
That's massive. So much in fact that the Inspector General for the Small Business Administration thinks there's no such thing as an independent chicken farmer.
“The large chicken companies (integrators) in our sample exercised such comprehensive control over the growers that the SBA Office of Inspector General believes the concerns appear affiliative under SBA regulations...This control overcame practi-cally all of a grower’s ability to operate their busi-ness independent of integrator mandates.This control was enforced through close integrator oversight, management agreements, and grower–integrator communication. A grower’s failure to comply with these requirements could result in a significant decrease in integrator payments, a reduction in flock placements, or a cancellation of the contract.”
The chicken industry says consolidation has benefited consumers through increased productivity. But chicken farmers say weakening of the Packers and Stockyards Act had done little beyond lining Big Ag's pockets at their expense.
Here's how the system works.
Chicken companies contract with local farmers to grow birds for slaughter, providing chicks and feed. Farmers pay all costs associated with housing the birds, fuel and equipment.
But here's where it turns south for chicken farmers.
Chicken companies pay farmers using what they call the tournament system – essentially paying farmers for how plump the birds get. On first blush this sounds fair. But chicken companies control all the variables that ultimately determine plumpness including which farmers receive the healthiest chicks and the most nutritious feed.
Back in 2010 USDA proposed some new regulations that could have helped chicken farmers.
The rules would have prevented Big Ag from terminating their contracts without notice, make it easier for chicken farmers to sue chicken companies and restrict chicken companies from using the tournament system to favor some farmers over others.
Needless to say the meat industry opposed the regulations and lobbied Congress to block them, specifically Georgia Republican Jack Kingston who chaired the agriculture appropriations subcommittee and Arkansas Republican Steve Womack whose district includes Tyson Foods.
All that arm twisting worked.
Lawmakers included language in their annual spending bill that prohibited the USDA from spending any staff time to complete the new regulation.
So what has the White House been doing in the last two-and-a-half years to address chicken farmer concerns?
As it turns out nothing.
But oh how the White House loves chicken companies.
POTUS appointees got rid of the office responsible for policing meat companies for defrauding and cheating farmers. Predictably, fines against poultry companies plummeted to just $243,000 last year. That's less than a tenth of what that were in 2013.
The National Chicken Council, which represents chicken companies, applauded the decision.
The White House claims it will propose new chicken regulations this summer and has been talking with industry groups to formulate a new policy.
Chicken farmers should be very afraid.
A new chicken company friendly plan may be enough for staunch POTUS chicken farmers to reconsider their votes in 2020.
About Dave Dickey
Dickey spent nearly 30 years at University of Illinois at Urbana-Champaign’s NPR member station WILL-AM 580 where he won a dozen Associated Press awards for his reporting. For 13 years, he directed Illinois Public Media’s agriculture programming. His weekly column for the Midwest Center covers agriculture and related issues including politics, government, environment and labor. Email him at firstname.lastname@example.org.