In late January, I was flying home from San Diego. I was ravenous and quite grateful for my chicken salad. That is, until I began reading The Meat Racket by Christopher Leonard. The first chapter, entitled How Jerry Yandell Lost the Farm, is about a couple trying to make a living farming chickens. The baby chicks delivered to them by the giant Tyson Foods began dying in bulk. Their bodies were like soft, purple balloons by the time (Kanita Yandell) gathered them, Leonard writes. They fell apart to the touch, legs sloughing off the body. ... It was like they were unraveling from the inside at a heated speed.
Leonard is an evocative writer, and if disintegrating chickens don’t do you in, learning about the growth hormone Zilmax, which Tyson used until about a year ago to make cattle blow up like muscled balloons, just might turn you vegetarian. According to a letter Tyson wrote to its suppliers and that Leonard obtained, Tyson finally banned the drug’s use because Zilmax might be causing paralysis in some cattle, and rendering others unable to walk.
But the book isn’t an animal welfare or dietary screed. These incidents are part of Leonard’s deeply reported narrative about how big business has come to rule production of meat. Leonard reports that about 95 percent of Americans eat chicken, which means they almost certainly eat chicken produced by Tyson, which means this story affects us all. And as the title indicates, Leonard is a harsh critic of the system as it now operates, not so much because of what it might do to our health, but because of what he believes it does to farmers.
Only a very good writer could turn a story about chickens, hogs and cattle into a thriller, and Leonard is that. He brings his characters to life. At the center of the book, of course, is the Tyson family. It all began with the indomitable John, who came of age at the start of the Depression, had nothing and created what is now Tyson Foods.
The arc of the story is the process of what farmers call being chickenized. Tyson and its like have consolidated the industry not only by buying up competitors, but also by expanding vertically in an effort to control every step of production. That control has come at the expense of once-independent chicken farmers, who now mainly sell their birds to Tyson under contracts, the terms of which are tough, tough, tough. Tyson then used the techniques it pioneered in the hog business and, according to Leonard, is increasingly doing the same with cattle. That has left farmers to struggle to eke out a living in Tyson’s shadow. And according to Leonard, it has wrecked the small, farming towns of America.
Leonard thinks that the contracts that dominate the chicken business, and to a lesser extent the hog and cattle industries, are nothing but parodies of free-market deals. During their entire lifespan the animals will never brush up against an open, competitive market, he writes. Although you might think that a contract is still a free-market tool, Leonard argues convincingly that this is not the case. Tyson, for instance, pays farmers via a tournament, in which they compete to get paid based on their relative performance, measured by things like pounds of chicken delivered per week. The tournament is always a zero-sum game where those at the top earn at the expense of those at the bottom. This helps push the financial risks of farming from Tyson to its farmers, Leonard writes.
The contracts are dangerous for farmers not just because one of them has to lose for another one to win, but also because so little is under their control. Success in chicken farming, Leonard asserts, depends on the health of the chicks and the food they are fed and the technology of the farms. Tyson delivers the chicks and the feed. Leonard reports rumors that farmers who complain are given sick chicks or poisoned food, so they will go bankrupt. As for the farms, newer ones can produce more chicken at lower cost than older ones; Leonard tells of families who have sunk their savings into farms only to find themselves outgunned in the tournament by a newcomer just when they thought they were getting clear of their debt.
Leonard also details how the Obama administration’s initial promise to take on the meat industry was challenged by an onslaught of lobbying and ended in pretty much business as usual. The book is a scary portrait of capitalism run amok.
I found myself wishing that I could trust Leonard completely, but a few things gave me pause. He has an almost overwhelming nostalgia for the small farms of yesteryear. And so the farmers are always the good guys: hard-bitten but hard-working, honest, family-oriented. He felt the wind blow through his hair and saw nothing but blue sky and open land ...(he) knew he would do nothing else with his life but farm, Leonard writes about one. The Tyson workers, on the other hand, are always either hopelessly conflicted (at least he didn’t hate himself every morning as he headed into work, Leonard writes about one who was fired) or just plain mean. About a Tyson’s lawyer, Leonard writes that he had intelligence that wasn’t just impressive; it was weaponlike. It hurt people. The clichéd contrast made me wonder about Leonard’s judgment. The good guys are never so perfectly wholesome, nor the bad guys so devoid of humanity. Truth is never that clean.
Also wanting desperately to cast Tyson as his villain, Leonard overreaches in a way that mars his credibility. For instance, he writes at the beginning, The first barrier to change is the fact that everything about Tyson Foods seems hidden. Really? Tyson is a publicly traded company, meaning that it files dense financial reports full of information about its business every three months.
More important, Leonard seems to miss a chunk of the economic story. His argument, in essence, is that Tyson and the other meat companies are making so much money that some of it should go to the farmers. The critical question isn’t whether there is money in agriculture, but rather where the money goes, he writes. Consumers pay more, farmers make less, and corporations in the middle grab a windfall. Toward the end of his book, he writes that the agricultural sector in this country is now producing record profits, but the existence of those profits only told half the story ... if record profits were being made, who got to keep them? Yet at various points he undercuts his own arguments, writing, for instance, that competitors don’t challenge Tyson because its profit margins are too slim to tempt them and that a big rival, Pilgrim’s Pride, went bankrupt after the financial crisis.
I pulled up Tyson’s most recent financial report. A quick skim revealed that Tyson earned pre-tax profits of $848 million last year on sales of $34.4 billion – which, indeed, translates to a super-skinny 2.5 percent profit margin. What’s more, Tyson’s operating income in 2013 was less than it was in 2010, and a stunning 13 percent of its sales went to Wal-Mart – which itself is merciless to suppliers like Tyson in its pursuit of lower costs. The report also notes that consolidation among Tyson’s customers has produced large, sophisticated customers with increased buying power. Tyson may seem all-powerful to the farmers who have to deal with it, but its financial reports don’t tell the story of a company that can write its own rules and simply mint money. That doesn’t take away from the ugly results Leonard so effectively documents. But pretending the problem is simpler than it is won’t help us find a real solution.