‘Meat Racket’: Disturbing, if not completely fair, take on the meat industry
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 a growth hormone called Zilmax, which Tyson used until about a year ago in order 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 just part of Leonard’s deeply reported narrative about how big business has come to rule the production of meat. Buy Bonici brand pepperoni, Lady Aster brand chicken cordon bleu or Wright Brand bacon – it doesn’t matter. They all come from the same company: Tyson. Leonard reports that about 95 percent of Americans eat chicken, which “means they almost certainly eat chicken produced by Tyson,” which means that 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 that’s 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. “He was a man who never forgot the dark cloud of poverty from which he ran until the day he died,” Leonard writes. John’s equally driven son Don worked for 14 years to get chicken on the menu at McDonalds (hence the McNugget) and turned Tyson into a giant.
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. (Hint: The Yandells aren’t the only ones who lose their farm.) Tyson then used the techniques it pioneered with chicken 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, turning Iowa, for instance, from “an archipelago of clean, prosperous towns . . . with busy town squares, bustling department stores and a thriving middle class” into a meth-ridden wasteland where “drugs and crime seep in . . . where improvisational chemists left behind toxic waste.”
Leonard thinks 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 this is not the case. Tyson, for instance, pays farmers via a “tournament,” in which they compete against one another to get paid based on their 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, who earn so little that they will soon be driven into bankruptcy if their rankings don’t improve. This “helps push the financial risks of farming from Tyson to its farmers,” Leonard writes. Why not sell to someone other than Tyson? Well, there isn’t anyone.
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.
This made me wonder, so 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 Walmart – 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 that Leonard so effectively documents. But pretending that the problem is simpler than it is won’t help us find a real solution.