The Meat Racket: The Secret Takeover of America's Food Business Page 3
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 canc
el 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 raw timber from the endless acres of the Ouachita national forest surrounding their small home. The Yandell family had a small sawmill on their property. It almost paid the bills.
Jerry Yandell spent his childhood summers as a migrant farm worker, traveling to Oregon with his family to work in the orchards there. His mom and dad rigged a tarp over the rust-pocked flatbed of his father’s pickup truck, and Jerry and his seven siblings crawled beneath it, finding a seat among the packed baggage as the family drove west. The trip took at least five days. The Yandells went to the same fruit orchard every summer, where the family worked six days a week picking fruit—mostly strawberries. They lived in small cabins with other families who came looking for work, families with big broods of kids from small towns like Waldron, out-of-the-way places in the woods where kids knew how to split wood and prayed at the supper table. After work, Jerry Yandell played with the other kids in the dirt-packed yard outside the barracks. They slept on the floor. When he got back home and enrolled in Waldron Elementary School, his hands were as tough and gnarly as fresh-dug potatoes. His dad returned to the daily pursuit of a paycheck, logging in the national forestland or hewing timber in the mill behind their home.
One year his dad built a big long barn with wooden beams and a tin-looking roof. He grew chickens there for a new slaughterhouse in town. The birds yielded just about as much cash as the pulpy softwood tree trunks.
Jerry Yandell’s life was a chain of long days spent at labor, in the hope of good pay, with little concern about cheap pleasures or entertainment. That was life in Scott County. He grew up into a thin and rangy man, with eyes set deep in his face, who doesn’t talk for fun. He parts with his words slowly, as if they were saved-up coins.
Jerry bought his first chicken house from his father, just after he graduated high school. The birds didn’t yield much money, but the pay was steady. Jerry married a slight and pretty girl named Kanita who lived a few miles down the road. Just after his wedding, Jerry brought Kanita home to live with him and help with the new chicken house. She was almost seventeen years old. After the couple was married, it wasn’t unusual for Jerry to leave the house before dawn and start the long drive out to the chicken houses he owned.
The chicken business in Waldron picked up in the mid-1980s when Tyson Foods bought the local processing plant. Tyson was big, one of the biggest in the business, and it started to pump money into every corner of Scott County. Bankers were hot to extend loans on poultry houses. Tyson field men visited local ranchers and landowners with brochures and cash-flow sheets, enticing them to borrow outsized mortgages that could have financed mansions no one in Waldron had ever dreamed of owning. Jerry and Kanita signed contracts with Tyson, took on loans with the local Chambers Bank, and built more chicken houses. By 1997 the Yandells had seven houses spread around on plots of land within a few miles of their home, with clusters of the barns hidden up by a bend in Lick Skillet Road and a few more on wide, flat pastureland near the lonely hutch of homes called Hale Town. Jerry and Kanita had three sons, and by the time they were teenagers, each boy had his own truck and helped out in the chicken houses after school. Jerry thought he had given his boys a prosperous and stable life he had never known.
* * *
The Yandells received their first flock of diseased chickens in the winter of 2003. Shortly after the birds were delivered, Jerry opened a small door in the side of the chicken house and entered the dim space inside, making his way through the floating feathers and the heavy stink of ammonia. Big round steel lamps hung from the ceiling, suspended just a few feet above the carpet of wood chips where piles of white chicks clustered together. The brooding lamps hissed and emitted blue discs of propane flame that gave the young chicks their warmth.
When Jerry looked at the floor his stomach went cold. The birds were piled on top of each other in white mounds. They were sick, feverish, climbing on each other to survive. Jerry had been running the heat lamps full bore, pouring propane into the houses to keep the birds warm. But they had huddled there in piles and died overnight. He got the wheelbarrow and pushed it through the flock of birds, shooing them away from each other and trying to break up the piles where they smothered. But they just waved their wings listlessly as he passed. He dug into the piles of dead birds, where they were rotting like hot fruit. He tried to pull them away and their legs slipped off the body.
He started another hard day of work, piling the birds and parts into a wheelbarrow, taking it out to an overflowing freezer unit full of carcasses, and wondering how he was going to keep his family from going broke.
* * *
By the time the Tyson trucks arrived at Jerry Yandell’s farm to pick up the first flock of sick chickens, just about half of the birds were still alive. The chickens were dropping dead in the hours before they were gathered up for slaughter. That’s the sorriest flock of birds I ever seen, Jerry told the Tyson field man as he watched the birds get loaded onto Tyson’s truck. He was promised the next batch would be better.
Later that fall, the Tyson trucks arrived with the new flock, and they were unloaded as always. The truck pulled up to the open doors of his barn, where a fresh bed of litter was laid for the birds to rest on. A long row of brooding lamps hanging low from the ceiling glowed orange as they burned off propane. It was near a hundred degrees inside the house. Men unloaded crates of chicks from the trucks and walked down the row of hot lamps, flipping the crates upside down to dump the loads of downy yellow chicks on the fresh litter. The chicks sat stunned for a moment, then began flapping their wings, skittering around in startled circles. The birds looked healthy enough then. The next day, Jerry drove between his chicken houses, monitoring the new chicks, keeping the lamps hot and ensuring there was ample water.
As the birds were unloaded, Jerry had probed the truck driver for clues.
— I hope these are good, Jerry said.
— We don’t know nothing about them, the driver replied.
On the second day after Jerry’s newest flock was delivered, the birds began to form rings around the brooding lamps. It was a hundred degrees beneath the lamps, so the birds were scalded when they drew too close. But still they pressed in as tightly as they could. Even then, they seemed to be freezing. They piled on top of one another and died and began to rot. Jerry walked along the row of lamps and used a rake to pull them away from each other and spread them apart. But as soon as he walked past, the birds recircled and pressed into the heat. Within hours they were bloated and black like little balloons. He spent the days wheeling pile after pile of dead birds out of his chicken houses and into the overstuffed freezers outside. It had only been a couple of months since the first batch of sick birds arrived, but Jerry knew his farm was already sinking dangerously into debt.
He called the field techs, trying to control the anger in his voice. He drove between his properties and when he got home at night he sometimes found the reports the
field men had delivered while he was gone.
Temperature: adequate. Water level: adequate. Feed system: adequate.
He called the field techs on their cell phones and they gave him the same suggestions as before. He kept his heat high. He scattered the birds with rakes. He carted the dead away.
Jerry kept calling the field techs and telling them what he saw. And he kept hoping that during one of those calls, a field tech might actually give him some answers.
* * *
One of Jerry Yandell’s field technicians over the years was a man named Tommy Brown. Brown didn’t work with Yandell during the time when Yandell’s flocks were dying, so Brown couldn’t help him understand what was happening. But because Brown worked on the inside of Tyson’s system, with the managers rather than the farmers, he understood deeper truths about how things worked. He knew about fundamental problems on the Yandell farm that had nothing to do with sick birds.
On any given workday, Brown had roughly one million chickens under his watch. As a Tyson field veterinarian, Brown spent most of his day driving a truck down winding back roads in the Ouachita Mountains, traveling to the secluded farms in his territory, some as far as eighty-five miles away from his home in Waldron. Brown was a babysitter of sorts, checking on the flocks of chickens that Tyson placed in its network of farms. He was part of the fleet of Tyson trucks that busily pass each other on the country roads outside Waldron, the red TYSON logo on their doors carrying the air of absolute authority that ends conversations when they arrive on a farm.
Brown knew the farms on his route well. He knew the setup of the houses and knew the owners. When he stopped at a farm, he donned tall rubber boots that prevented him from spreading disease as he went from barn to barn. He always entered barns by the same door. It was the door where the farmer kept his mortality chart, the worn paper showing daily hatch-marks that counted dead chickens. Ten a day wasn’t bad. More than that, and Brown started asking questions.