The Meat Racket: The Secret Takeover of America's Food Business Page 2

  For all its power over the meat supply, Tyson escapes the news coverage it deserves because from a Wall Street–centric perspective, Tyson looks pretty boring. There’s no such thing as a day when Tyson Foods delivers an earnings surprise and moves the markets. No one is waiting for the company to introduce the next iPad, or make some sort of stunning merger or acquisition (itself a sad testament to the fact that Tyson has no one left to buy). Tyson is a Fortune 100 company that feeds most families, but that’s the single thing that it does day after day, in a quite predictable fashion. There’s nothing especially innovative happening, and no expectation that there ever will be. The company’s stock ticker symbol, TSN, just slowly crawls around and around each day at the bottom ring of everyone’s circle of concern. It hovers near the same level where it’s been for years, with a value that neatly mirrors the nexus between the price of corn and the price of wholesale meat at the butcher shop.

  But the view of Tyson looks different when you’re at the bottom, looking up. And that view provides the more accurate picture. Because Tyson doesn’t really exist on Wall Street. It doesn’t exist in the studios of CNBC or even at Tyson’s own headquarters in Springdale. Tyson exists within its footprint of slaughterhouses, feed mills, and farms. It lives in the widely dispersed network of industrial fortresses, like the Tyson complex in Waldron and other isolated towns like Berryville, Arkansas; Dexter, Missouri, and Broken Bow, Oklahoma. In these places, Tyson is the center of economic gravity. In these places, it is revered and feared. It provides the jobs. It provides the tax base. If Tyson ever closed up shop, the town itself would evaporate.

  This is power, very real power, and it can be felt only by visiting the far-flung places Tyson calls home. The power is etched into the fretful face of men like Edwin, who once tended to the industrial-sized flocks of birds that Tyson owns. Edwin is a polite man, a country man, and so was willing to sit on a bench in his front yard and entertain questions from a reporter. But Edwin was too scared to give his name, too scared to share his phone number. And that was back in 2004, when things were good for Edwin and his wife and kids, well before the fainting spells that Edwin blamed on the fumes in the chicken houses where he worked every day. Well before Edwin lost his farm and got divorced. This was before all that, when Edwin’s life was about as stable as it was going to be. Edwin was willing to talk anonymously about the diseased birds Tyson gave him to try and raise, and how they died en masse and left him losing money with each new flock. But he was mortified at the thought that his story might end up in a newspaper.

  Tyson’s power could be felt several miles down winding country roads from Edwin’s farm, at a small house where an elderly woman answered the door. She was also polite, and she stood out on her front porch to entertain questions. But her face zipped closed when Tyson’s name was brought up. Her son worked at the Tyson plant. She didn’t want to talk about the company. There wasn’t anything around but green hillsides and fresh country air, not a person to overhear what she might say. But it was as if a Tyson field technician were sitting right there on her porch, in his trademark khaki uniform. She’d talk about anything in town except Tyson, insistently fending off any questions about the company until the painful encounter was over and she went back inside.

  When a reporter knocked on the door of a Tyson field veterinarian in a small town in rural Missouri in 2009, the man came outside to talk. His wife joined him, then his children. The reporter might as well have been a federal agent in the age of Prohibition, poking around rural enclaves and asking residents how they made their money. The message was clear, from both the field tech and frigid stares of his family: Go away. Get off this property. Stop asking questions.

  At its heart, Tyson’s power is economic, and it has used this power to redraw the laws of wealth and income in rural America. The way the company is structured has done more than revolutionize how meat is produced. It has also fundamentally altered the way money is distributed in America’s Heartland. This fact is difficult to discern by simply visiting the towns where Tyson operates. The run-down streets of Waldron and the shabby farms in surrounding rural Scott County help perpetuate a peculiar American stereotype about farming: that it is a hardscrabble business defined by thin profits and economic volatility. The financial decline of farming towns has become an accepted fact of American life, and the economic plight of farmers (who seem to complain incessantly about their low prices, high debt, and the ever-present threat of bad weather) is now considered a kind of inescapable destiny. The American farm and the small towns it once supported, the thinking goes, have died over the last fifty years because there’s no money to be made in a largely backward-looking business.

  This would be a sad thing, if it was in any way true, but it is not. Farming is immensely profitable. The agriculture sector is one of the richest, most productive moneymaking machines in American life. After all, a lot of the business simply involves sitting around and letting plants grow and letting animals get fat. Mother Nature does the heavy lifting. Then the farmer harvests the plants, kills the animals, and watches the money roll in. In 2010 alone Tyson Foods sold $28.43 billion worth of meat and cleared $780 million in pure profit. And that was during a tough year, when consumers were dining out less and scrimping on steaks and the precooked meals that are Tyson’s real moneymakers. Other agriculture companies did just as well.

  The critical question isn’t whether there is money in agriculture, but rather where the money goes. It certainly doesn’t go to places like Waldron. On Saturday night, Waldron’s Main Street is quiet to the point of abandonment. The new strip mall at the southern end of downtown is vacant, with lumpy black garbage bags peppering its empty parking lot. The sole locus of activity is the renovated Scott County Movie Theater, which draws a crowd for its single screening of the night. A young woman named Frankie Watson takes tickets, chatting with the clientele. Watson takes cash from a young couple, no older than teenagers, and the shy blond girl mutters something toward the window.

  “What?” Frankie asks.

  “I found out I’m pregnant,” the blond girl says louder, no note of particular urgency in her face. The boy with her smiles faintly.

  “I knew it!” Frankie exclaims.

  “I didn’t know it,” the girl says over her shoulder as she walks inside the theater. Moments like this have kept Watson and her husband in Waldron, even though they probably should have done the sensible thing and moved out of town to find a job, as many of her grade-school friends have done. Instead, they renovated the city’s theater, gutting the moldy insides that had been empty for years. The weekend shows make enough money to pay the bills. The Watsons thought of Waldron as home, and so they wanted to stay there, even if it meant earning far less than they could easily find just an hour north in Fort Smith. The people are so poor in Waldron, Watson said, that the Great Recession of 2007 and 2008 largely passed them over, unnoticed.

  If the money isn’t circulating in places like Waldron, if it isn’t in the hands of Frankie Watson or the teenagers who visit her theater, then where is it?

  The money is riding on a one-way current. It is generated in the churning machinery of Tyson’s slaughterhouse: Cash is minted along the conveyor belts carrying chicken carcasses and in the industrial ovens where chicken patties are cooked and breaded. But the money exists for only a moment or two within Waldron City limits. Almost as soon as it’s created, it rides a current north to Springdale, to the treasury of Tyson Foods. It stops there temporarily and some of it is doled out to workers in the black steel-and-glass office buildings. Then the current carries the cash to Wall Street, which acts as a post office address for Tyson’s owners. These owners are mostly big institutions and shareholders, and Tyson’s profits stay with them.

  Tyson’s structure, and its dominance over all aspects of the rural economy, has delinked the corporation’s well-being from the fortunes of the towns in which it operates. The average per capita income in Waldron and surrounding Scott County has
stagnated in Tyson’s shadow, growing just 1.4 percent over the last decade, to about $22,000. During that time, Tyson’s annual income rose 245 percent. The same pattern is writ large across other communities where the company operates. While Tyson profits, rural America treads water and consumers pay more for their food.

  Tyson’s power has become entrenched over decades, as Democratic and Republican administrations traded places in Washington. But the economic malaise of rural America caught the attention of a young presidential candidate named Barack Obama as he spent months campaigning in Iowa during 2007 and 2008. In towns like Council Bluffs and Storm Lake, Tyson’s economic power is a fierce and partisan political issue, a fact that did not escape the Harvard-trained lawyer from Chicago. When Obama was elected, he named Iowa’s governor, Tom Vilsack, to the post of secretary of agriculture, and he told Vilsack to take action on the concentration of power among a few giant agribusiness companies. Unlike a parade of agriculture secretaries before him, Vilsack actually took up the challenge. The U.S. Department of Agriculture proposed the toughest antitrust rules over meat companies since the Great Depression. The USDA has held a series of workshops with the U.S. Department of Justice, with Vilsack and Attorney General Eric Holder traveling to places like Normal, Alabama, and Ankeny, Iowa, to learn more about Tyson’s power. The workshops were the biggest effort in decades to find a legislative prescription for the ills of highly concentrated corporate power over the U.S. food supply.

  In retrospect, the Obama administration seems almost naive in the way it attempted to reform the meat industry. The series of workshops were launched with soaring rhetoric about the creation of a new food system and new rural economy. What the administration did not seem to anticipate was the organized resistance it would face from Tyson Foods and other multinational meat corporations. The companies were not enthralled by the promises of change. Instead, the corporations marshaled millions of dollars and teams of lobbyists to help turn back the biggest effort to reform the meat industry since the 1930s.

  The system that Tyson pioneered is now entrenched in the American economy and American way of life. Tyson’s corporate culture became small-town America’s corporate culture while no one was paying attention. There have been benefits to this but also deep costs. If America’s consumers and farmers cannot rid themselves of the system that Tyson has imposed on them, they are at least entitled to understand the company, and to see it from the inside.

  PART 1

  * * *

  “THINGS ARE BORN. THINGS DIE.”

  CHAPTER 1

  * * *

  How Jerry Yandell Lost the Farm1

  (2003–2004)

  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 s
uits 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.