Beak Capitalism, Part 3: Un-Clucking the System

In the final episode of our special three-part series exploring the US economy through the chicken industry, we’re taking a look at market competition. Chicken in the US is dominated by a handful of huge poultry processors. But new technologies, like algorithmic pricing, are also leading to accusations of anticompetitive corporate behavior that can potentially create bad outcomes for both consumers and workers. We’re using poultry to trace the evolution of America’s approach to antitrust and learning what’s different now. You’ll hear from senior officials at the Department of Justice about how concentration in chicken and elsewhere is impacting the economy, and what can be done to fix it. Become a Bloomberg.com subscriber using our special intro offer at bloomberg.com/podcastoffer. You’ll get episodes of this podcast ad-free and exclusive access to our daily Odd Lots newsletter. Already a subscriber? Connect your account on the Bloomberg channel page in Apple Podcasts to listen ad-free. See omnystudio.com/listener for privacy information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

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• 0:52Tracy Alloway?

  Joe, why did the chicken join the Revolutionary War?

• 0:56Joe Weisenthal?

  I have no idea.

• 0:57Tracy Alloway?

  Because it didn't want to be cooped up under British rule.

• 0:59Joe Weisenthal?

  Okay, but setting aside the terrible puns, wasn't it really about taxes?

• 1:04Tracy Alloway?

  Joe, Joe, why did the colonial chicken refuse to pay British taxes? Because it didn't want to put all its eggs in King George's basket. Should I keep going?

• 1:13Joe Weisenthal?

  No, I'm good. I'm good. Thanks. I'm good.

• 1:15Tracy Alloway?

  Okay, fine. To understand chicken and the current landscape of the US economy and the companies in it, it helps to go back in time and revisit a few key moments in US history.

• 1:27Speaker 04

  Going back to the founding, Americans were actually suspicious of the power of large corporations. And one reason for that is that it used to be that the government would grant corporate charters, right? There's this history in the United States before general and corporation statutes that corporations are really creatures of the state. And so there was always this suspicion that if they grew to be too powerful, the kind of abuse that they could bring to bear on the lives of ordinary people was really extensive.

• 2:00Tracy Alloway?

  Doha Mekki is the principal deputy assistant general in the antitrust division of the Department of Justice. That's a long title. It means she's the second highest ranking official there.

• 2:11Joe Weisenthal?

  Today, the US government has a whole constellation of laws, acts and agencies, all aimed at ensuring that America's economy remains fair and competitive. One of the most important is where Doha works, the DOJ.

• 2:23Speaker 04

  The antitrust division is one component of many at the Justice Department. And our specific mandate is to enforce the antitrust laws and essentially to guarantee and vindicate the economic liberty of all Americans. And we do that by enforcing the federal antitrust laws, the best known of which are the Sherman Act and the Clayton Act.

• 2:45Tracy Alloway?

  You've probably heard of these before. The Sherman Antitrust Act of 1890 was famously deployed in the breakup of Standard Oil back in 1911, which is still probably the country's most well-known antitrust case. And the Clayton Act arrived soon after that. But America's approach to antitrust has constantly changed over time.

• 3:05Joe Weisenthal?

  And Chicken, with all its accusations of price gouging and unfair labor practices and just huge corporate concentration, seems to be a perfect poultry petri dish to experiment with some new ways of looking at antitrust.

• 3:21Tracy Alloway?

  Welcome to part three of Beak Capitalism, our ongoing exploration of the US economy through the medium of Chicken. In this episode, we are asking how we can solve some of the problems that big Chicken creates. Can we actually uncluck the system?

• 3:56Speaker 05

  So a little bit of history.

• 3:59Speaker 05

  Actually, the relationship between agriculture and antitrust goes back to the beginning. Farmers were one of the big supporters of the Sherman Act, the first antitrust statute passed by Congress.

• 4:12Joe Weisenthal?

  Michael Cadiz is Deputy Assistant Attorney General for the Antitrust Division at the DOJ. He works alongside Doha, but recently, he's spent a lot of time focused on agriculture. Because it turns out the DOJ has a long history with the food industry.

• 4:26Speaker 05

  And early on, the Department of Justice brought a number of cases against meat packers. And along about 1914, Congress looked at the way the Supreme Court was handling that act and was not happy. So they passed the Clayton Act, which was supposed to broaden the enforcement powers of the division. They also created the Federal Trade Commission.

• 4:46Tracy Alloway?

  And the first thing the president asked the newly created Federal Trade Commission to do was study the meatpacking industry.

• 4:53Speaker 05

  Fast forward to 1920, the FTC issues a three-volume report documenting everything going wrong in meatpacking markets, both collusion and deception. And at the same time, the Justice Department files an antitrust case that breaks up the packing industry. And yet Congress still wasn't happy. So then in 1921, Congress, now under a strong Republican and a fairly conservative Congress, passes the Packers and Stockyards Act, which really said, look, we are concerned that the people who ranch and grow hogs are always going to be facing very large, powerful interests, and we want to give them extra protections.

• 5:38Speaker 05

  And so whereas the antitrust laws focused solely on competition, the Packers and Stockyards Act actually provided explicit protection for ranchers, hog growers, eventually chicken growers, from deception, unfairness, discrimination.

• 5:55Joe Weisenthal?

  You're going to want to remember the Packers and Stockyards Act. It's been deployed quite a bit lately in the name of antitrust enforcement in agriculture and chickens especially.

• 6:04Tracy Alloway?

  But chicken also says something about fairness in business more generally.

• 6:09Speaker 04

  There are many lessons to be drawn from antitrust enforcement in the chicken industry that I think have made us better enforcers and that have really brought into focus the expansiveness of our mission. Again, antitrust is a big mandate. It rhymes with a lot of core democratic values that all of us hold as citizens of this country. And so to bring that down to the level of enforcement, antitrust enforcement at the market level, what we see in the chicken industry is that this outsourcing of risk is actually a business model that many kinds of companies employ.

• 6:49Speaker 04

  For example, a ridesharing company, right, that outsources risk, investment, and recoups a lot of the profit for simply matching riders and passengers, for example. There are other examples in the real estate industry, in banking, again, where you see this sort of outsourcing of risk. And it raises fundamental questions about how those markets are functioning, whether consumers are ultimately getting the kind of choices, good value, innovation, and other things that we really lean on the antitrust laws to deliver.

• 7:32Joe Weisenthal?

  All of this raises the question of what exactly we mean by antitrust and what exactly is anti-competitive behavior?

• 7:38Tracy Alloway?

  Yeah, we should talk about that because for years, competition was judged on the basis of a consumer welfare standard. What that means was, for example, if two companies decided to merge and prices for consumers ended up being lower as a result, then that was generally fine. Monopoly was only a really bad thing if it led to higher prices.

• 7:59Joe Weisenthal?

  Right, because pretty much everyone likes cheap chicken. And at a minimum, you could argue that concentration in the poultry industry and industrialization of chicken and all the scale that comes with it has created a lot more white meat to go around.

• 8:11Tracy Alloway?

  But in recent years, policymakers' approach to anti-competitive behavior has started to change, a lot. Not only are they looking beyond simple chicken supply, but they're also arguing that it's not clear that all of this is leading to better outcomes for consumers either.

• 8:28Speaker 05

  One of the problems in antitrust enforcement generally is people said, well, you know, if you have power on the buying side, that just will get passed down the line to the ultimate consumers. That's actually wrong, right? The concern here is if the middle person has the power, they're going to extract taxes up and down the line. And it's not the case that you would expect somebody, if they are forcing prices down through anti-competitive means, that they're going to pass that along. And just as a sort of general example, think about it this way. The way you exert monopoly power on the buying side, which we call monopsony power, right? Is you actually buy less.

• 9:13Speaker 05

  So you're reducing demand so that prices go low. Well, if they're buying less, they're selling less. And so that can't help consumers. Consumers want more supply, more competition. So either it has sort of no effect downstream or it actually contributes to higher prices. So when we go after monopsony power in the agricultural industry and are successful, it benefits both the producer and often the consumer.

• 9:44Tracy Alloway?

  Joe, ring the monopsony klaxon.

• 9:46Joe Weisenthal?

  Monopsony.

• 9:49Joe Weisenthal?

  It comes up a lot nowadays. To put it simply, it's basically a market structure where there's only one big buyer, whether that's of labor, widgets, whatever.

• 9:56Tracy Alloway?

  So if you're a chicken farmer in Rhode Island, for instance, there might be just one poultry processor that you can sell your chickens to. And that company might be able to dictate its terms.

• 10:07Joe Weisenthal?

  So where a monopoly is all about a single seller that controls supply of a particular product or service, monopsony is about what's happening on the buy side. Here's Doha.

• 10:17Speaker 04

  It's this idea of deep power that is exercised on the buy side of the market. And this is actually very old economics, right? This is a theory that was pioneered by Joan Robinson in the 1930s. And so there's this idea that buyer power might be harmless, but we've known for almost a century empirically that, you know, if a buyer chooses an input along a supply curve and then is able to exercise the power to drop the value of that input.

• 10:49Speaker 04

  Maybe in the short run, you get lower prices or expanded output. But if you drop the value below a reservation wage, right? Especially when you're talking about labor markets, which a lot of producer and grower economies, you know, are basically labor markets, that you will eventually destroy incentives to continue making that input. And so in the long run, you will actually get contraction in a market. That is classical monopsony power that is empirically sound. And that has been, I think, upheld by a lot of economists for a very long time.

• 11:30Speaker 04

  There is another flavor of monopsony, of course, which is just the abuse of bargaining leverage. If you fear termination of a contract that your buyer has negotiated with you, if you fear, this is the same thing with non-competes, right? This is the same sort of economic idea that if you have lower bargaining leverage, you are likely to do everything you possibly can to be more compliant with the terms that are imposed by the purchaser of whatever product or service that you are selling. And so that just maps on almost perfectly with the chicken industry. And what is really, I think, most fascinating in the chicken industry and other types of

• 12:12Speaker 04

  labor markets is that you can actually exercise power and abuse bargaining leverage at much lower concentration thresholds, which is a really interesting and fruitful area of economic research that has been produced over the last five to 10 years.

• 12:30Tracy Alloway?

  So armed with that wider definition of competitive pressures, the DOJ has gone on the attack. For instance, they successfully blocked a merger of the publishers Penguin Random House and Simon & Schuster by arguing that the deal would lead to lower earnings for authors.

• 12:46Joe Weisenthal?

  But the DOJ's results when it comes to chicken have been more mixed, despite that broader definition of antitrust. In 2020, the DOJ indicted executives from poultry processors, including Pilgrim's Pride and Claxton Poultry Farms for price fixing, only to see them acquitted by a jury.

• 13:02Tracy Alloway?

  There have been some wins, too. The DOJ got a $85 million settlement with a bunch of poultry processors over allegations that they conspired to share information on wages.

• 13:13Speaker 05

  One of the cases. We brought involved an information sharing amongst chicken processors and they were sharing incredibly detailed information about compensation. And not only were they sharing it, they were like meeting every year and eventually bringing their data so that they could all be sure that they were sharing accurate data and then talking about compensation. So there's the example of coordination amongst people who should be competing for workers, actually figuring out how not to compete with each other.

• 13:47Tracy Alloway?

  And last year, Coke Foods, a huge poultry processor, agreed that it would no longer charge a penalty if contract growers choose to switch processors after the DOJ filed suit under Sherman and our good friend, the Packers and Stockyards Act.

• 14:02Speaker 05

  Another case we brought involved, again, a specific chicken processor who was contracting with, and that's already a relationship where the processor owns most of the bargaining power, but decided that wasn't enough, their growers. If you want to switch to one of our competitors, we're going to make you pay a penalty. So that is the processor preventing competition unilaterally by making it harder for the grower to actually benefit from whatever competition exists in the market. And it's also just simply, obviously unfair to these growers who don't have that much opportunity by denying them whatever limited opportunities exist.

• 14:46Joe Weisenthal?

  It's a nice step for critics of the tournament system that we talked about in episode two, but there's also more that could be done.

• 14:53Speaker 05

  The third case involved the chicken tournament system, right? And so one of the things chicken farmers face growing chickens is every six weeks when their chickens are picked up by the processor, they are actually weighed and measured against the other growers that are delivering chicks the same week. And it's almost, you know, you're directly competing with your fellow chicken growers. And some people get penalized and some people get a benefit. But given the risk these growers face, we brought a case saying the penalty itself. Makes it impossible for growers to really understand the financial risks they're taking because there's a lot of arbitrariness

• 15:37Speaker 05

  in the tournament and it's not just, your results don't just depend on how well you perform. And so Wayne Sanderson, who is the, I believe, the third largest chicken processor in the country, agreed that they would stop penalizing growers in their tournament system.

• 15:55Tracy Alloway?

  So another small victory. Meanwhile, the US Department of Agriculture this year proposed more regulation of the tournament system under, you guessed it, the Packers and Stockyards Act. Joe, should we make Packers and Stockyards merch?

• 16:09Joe Weisenthal?

  Yes, absolutely. Well, maybe. But it is kind of interesting to think about how 250 years ago, Americans were all worried about taxes under King George and the tyranny of the state. But today, maybe we should all be worrying about something else, what Doha calls the tyranny of the intermediary.

• 16:25Speaker 04

  Thinking about the chicken industry in particular, you see limits on the ability to sell your product or service to a small number of companies. And that is how you get this problem of the tyranny of the intermediary, right? It's the meat processor that sits in the middle, right, between the ultimate purchaser and the grower and can command a certain sum or lower the price on one side of the market and really grow revenues and get fatter in the middle.

• 16:55Tracy Alloway?

  So antitrust has a long history with agriculture and the poultry industry, although the way it's being viewed and enforced has been changing recently. But that's only one side of the story. Because even as antitrust evolves, the way companies run their businesses has evolved too. A lot.

• 17:14Joe Weisenthal?

  When the Sherman Act and the Clayton Act and the Packers and Stockyards Act were all created, the middlemen of America were smaller and not as technically sophisticated, obviously. If you were going to influence prices, you were probably doing it in a backroom somewhere, smoking a cigar, probably playing poker.

• 17:31Tracy Alloway?

  But today, companies have a host of new data sources and tech-powered tools to run their businesses. And when it comes to chicken and souped-up data sources, we have to talk about Agrostats.

• 17:43Speaker 06

  I will say, generally speaking, it's often been referred to as the most important, one of the most important companies you've never heard of.

• 17:49Tracy Alloway?

  That's Jonathan Cantor, the Assistant U.S. Attorney General for antitrust at the DOJ. He's the head honcho, Doha and Michael's boss, basically. And together with Lina Khan, the Chair of the Federal Trade Commission, he's been leading one of the most aggressive regulatory responses to antitrust in years, decades even.

• 18:10Joe Weisenthal?

  And one of their more recent actions is against Agrostats. Now, Odlod's listeners will actually have heard of this company before. We spoke about it earlier this year with David Dian, the Executive Editor of The American Prospect. He did such a good job describing what Agrostats does that we're just going to let him do it again here.

• 18:26Speaker 07

  And this company collects real-time proprietary data from all of the meatpacking producers in a given market, whether it's pork or pork or poultry or chicken or turkey. And they put all this data in these giant books, and they give them out to these various competitors, which now have basically a setup of everything that their competitors are doing, including their price, including their supply, including every single thing, part of their market. And now, they can know that, oh, I can probably raise my price because I'm under price relative to my competitor, but I won't lose market share because my

• 19:10Speaker 07

  competitor is charging more for this product. And it has the tendency to ratchet prices upward.

• 19:18Tracy Alloway?

  The DOJ filed suit against Agrostats last year, arguing that it was violating the Sherman Act by sharing competitive information. We reached out to Agrostats for comment. However, they didn't respond. The company published a statement on its website shortly after the lawsuit was initially filed. They are denying the allegations.

• 19:37Joe Weisenthal?

  Currently, the case is still live, which means Jonathan can't talk about it in detail. But more generally, he argues that it illustrates the dominance of intermediaries in the economy.

• 19:47Speaker 06

  So this is a case that we brought involving information exchanges, among other things poultry processors. And the idea, and this is something that we're seeing in many aspects of our economy, is that when large companies share competitively sensitive information using often faceless intermediaries, that sharing of information can result in higher prices to consumers, but it could also result in depriving, in this instance, family farmers and others of a fair return on investment.

• 20:19Tracy Alloway?

  So the way companies might share price and market information has moved on from those secret deals in dark rooms of the past. Now they might do it on a platform or through an algorithm. And antitrust enforcement has to adapt to this new world.

• 20:33Speaker 06

  This is an issue that we are confronting throughout our economy. And so the concerns around data sharing and coordination are not new, right? The antitrust laws enacted initially in 1890 have been dealing with this ever since. But what we are encountering now is almost a supercharging of data sharing and coordination. And so the use of technology and intermediaries has created the opportunity for companies to contribute information, for example, to a central database or service, and have that service essentially perform the function of coordinating and using that data to help those companies extract higher prices or offer lower returns to people who are selling their goods and services.

• 21:17Speaker 06

  In the context of technology now, something that used to be difficult to do because it required manila envelopes of data and spreadsheets and calculators and a lot of manual labor, is increasingly being outsourced to technology, algorithms that can take this information and essentially take on the pricing or take on competitively sensitive functions of a business. And the more that is outsourced to these technologies, these algorithms, the more the difficulties that used to somewhat restrict the ability of companies to engage in anticompetitive coordination. Those frictions, those impediments are being lifted and eliminated and it's going to make

• 22:01Speaker 06

  it easier and more effective. And that is a real big concern of ours. And so when we think about what does an agreement look like? What is information sharing? What does coordination look like in the year 2024? We have to look at what market realities present and market realities today present algorithms doing that work and whether it's an algorithm taking the information, spitting it back out and resulting in higher prices, or two individuals in a smoke filled room as it might have been 100 years ago. It's the same anti-competitive end. They're just doing it through different means. And so whether it's a handshake, using the postal service and sending mail to coordinate, whether it's using email or text messages or chat or phone, or in today's

• 22:44Speaker 06

  world, sharing information through an algorithm and outsourcing it to AI, it's still the same thing. It's coordination, it's price fixing, it's market allocation. And the antitrust laws apply just as much now, if not more than they did when they were enacted in 1890.

• 23:00Joe Weisenthal?

  So the outcome of the Aggrastad suit will be very interesting to watch.

• 23:03Tracy Alloway?

  But what about changes in the way we raise chickens too? Because even if chicken prices come down and labor practices improve, there might still be some other poultry-related problems.

• 23:20Speaker 00

  What's next for virtual assets? I'm Jacob Grease, host of Economy Scale, a series exploring growth in key global sectors. And in this episode, we're diving into the digital forces shaping finance. Sean McHugh from Dubai-based Virtual Assets Regulatory Authority has this to say.

• 23:36Speaker 06

  We're seeing a lot of institutional players come in, digital asset dedicated hedge funds, high-frequency traders and that sort of thing, and folks who service institutional clients.

• 23:45Speaker 00

  As more capital enters the market, adaptive regulation is likely to become increasingly key. Reese Merrick of Ripple says.

• 23:53Speaker 07

  globally would like to keep the industry at arm's length. That's the opposite here. I think also what you'll find is that regulation and frameworks can come out, but some of them are maybe a slight iteration on some 80 year old policy and not actually in line with what the technology can do and offer. And again, that's very different in Dubai.

• 24:12Speaker 00

  Listen to the full episode wherever you get your podcasts. This series is brought to you by Bloomberg Media Studios and the Dubai Department of Economy and Tourism.

• 24:21Speaker 01

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• 25:00Speaker 07

  One of the most remarkable food miracles is the story of chicken, a triumph of research on the farm and in the marketing system. Once something special for Sunday dinner, chicken, inspected and graded, is now thrifty every day. Yes, in one generation, people of this country have doubled their consumption of poultry.

• 25:26Speaker 07

  Farm research has led to the control of disease, improvement of breeds, advancement of production. Marketing research has developed low-cost methods of mass distribution in processing, storing, handling, and packing.

• 25:43Speaker 07

  And these boxes join the never-ending

• 25:45Joe Weisenthal?

  technological changes in the way we grow chickens was once pitched as a big win for consumers. We talked about it in our earlier episode, the introduction of hormones, antibiotics, and growth promoters all combined to create a more robust chicken.

• 25:57Tracy Alloway?

  But just as antitrust regulators have started to repair some of the damage wrought by new technologies, consumers have been pushing back too.

• 26:05Joe Weisenthal?

  We spoke to Maren McKenna, the public health specialist earlier in the series, and as she explains it, people's attitudes towards, let's call them augmented chickens has turned. Now the worry is that all that antibiotic use in birds might make it more difficult to treat people, and that's led to a big change. We got really

• 26:23Speaker 01

  Significant change in the United States about how antibiotics were allowed to be used in the raising of livestock. Not legislation, because legislation had been tried on this issue back in the 1970s and foiled by some congressmen with big agricultural interests behind them. What the Obama administration did in pretty much their last days in office was instead to change some regulations, they're technically called guidances, at the FDA that affected how antibiotics were allowed to be labeled. And since the label has the force of law for how an antibiotic can be used, that actually created significant change. And what it basically did was outlaw growth promotion.

• 27:08Speaker 01

  Now, the reason why this happened was, first, because the Obama administration took it on as a cause, and, second, because one of the most powerful chicken companies in the United States, Purdue Foods, got behind the change. In fact, you could argue led the change in some ways. But also, there was a consumer movement. And it's kind of remarkable to me that, given the size of the economic forces that we're talking about, this incredibly large trade in livestock, that consumer voices were heard. But sets of very large buyers, for instance, university medical centers and very large

• 27:51Speaker 01

  public school systems, both of which are feeding vulnerable children or feeding vulnerable patients, said to essentially their wholesalers, "We don't want anymore to buy chicken that was raised with routine use of antibiotics, because if there is resistant bacteria on this meat, it is going to endanger people whom we're feeding." And that led both the companies and the regulators.

• 28:17Speaker 01

  To understand that if they stepped out and made these changes, there was an audience and a market waiting for them. And somewhat to everyone's shock, the change actually happened. So in the last days of the Obama administration, it became no longer possible to use growth promoters in the United States.

• 28:40Tracy Alloway?

  Because, of course, chicken isn't just about prices and wages. It's about lives, too. We eat a lot of chicken meat, and we want it to be good for us. Meanwhile, the use of antibiotics has gone hand in hand with crowded chicken houses and factory farming.

• 28:55Joe Weisenthal?

  As Maren mentioned, Purdue, the fourth-largest poultry company in the US, got on board with the change. Even eight years later, it says it's still committed to, quote, "no antibiotics ever" in its flocks. Some other companies have backtracked, though. Tyson, for instance, has dropped its "no antibiotics" label, though it says it's only using drugs that aren't important to human health.

• 29:15Tracy Alloway?

  In 2024, however, there is something else to worry about when it comes to chickens' collective impact on human health: bird flu.

• 29:24Speaker 01

  Bird flu has been coming back to the United States and being found not just in migrating wild birds and raptors, for instance, but also in domesticated birds. And when avian flu, which is incredibly pathogenic to birds, gets into a very large-scale chicken operation, whether that's turkeys or broilers, meat chickens, or laying hens, egg chickens, the results are incredibly dramatic. Entire farms can be wiped out, and those farms may be very large. Egg farms can have more than a million chickens on them easily. And so it's a significant concern

• 30:06Speaker 01

  that this flu keeps on sort of like knocking at the window of our agriculture and finding ways inside.

• 30:16Tracy Alloway?

  You may remember this virus from such inflationary events as the 2023 egg price spike, which was caused in part by the culling of millions of hens because of bird flu, as we discussed in the first part of this series.

• 30:29Speaker 01

  So, over the past couple of years, it's become very clear out in the wild world that this avian strain of flu, avian flu H5N1, also can affect mammals. It had a really profound effect on several collections of mammals living by ocean sides, like sea lions, for instance, in South America.

• 30:51Speaker 01

  But I think it was kind of a shock for people to realize that somehow this flu had made a sufficient adaptation that it could affect cows.

• 31:01Tracy Alloway?

  Did you hear that? Bird flu is now found in cows. That's your chicken sandwich and your milkshake.

• 31:07Speaker 01

  And now avian flu H5N1 has been found in, primarily in dairy farms up and down the US. It may well be in other types of cattle raising as well. It happens that on dairy farms, first, workers are pretty face to face with the cows fairly often, and second, they interact with the cows fairly often because the cows have to be milked regularly. And so that flu can sicken cows and can cross from cows to humans, has become visible on dairy farms in a way that I think no one really expected, and that has taken us by surprise.

• 31:46Joe Weisenthal?

  At the time we're recording this, the Center for Disease Control and Prevention has confirmed that healthcare workers in Missouri got sick after nursing a patient who is infected with bird flu. It's not yet clear how they got it, but it is a reminder the chicken might end up being ground zero for another pandemic, too.

• 32:04Joe Weisenthal?

  It's probably a stretch to say that the US economy, whether it's inflation, wages, quality of life, et cetera, rests on how we grow, treat, and sell its chicken. But like, there's a lot there. It contains multitudes.

• 32:16Tracy Alloway?

  Chicken does contain multitudes. When demand goes up and supply chains and labor markets get upended, whether it's from disease or climate disaster, chicken prices go up, too, adding to overall inflation. And companies might push price in that scenario to make up for lost volumes, which also adds to inflation.

• 32:35Joe Weisenthal?

  And chicken on the way birds are raised could be the source of another major pandemic, one that could cause a lot of disruption yet again.

• 32:41Tracy Alloway?

  And the tournament system has a lot to say about the balance of power between big companies and platforms and the people who rely on them. Plus, chickenization is on the march more broadly, making its way into pig farming and other parts of American agriculture.

• 32:57Joe Weisenthal?

  In the meantime, the intense concentration in the poultry industry has captured the attention of regulators and prompted some action on things like price sharing, but with mixed results so far.

• 33:06Tracy Alloway?

  For them, chicken is really important because it's not just about lost or lower earnings for farmers, it's also about what happens after that. Here's Jonathan Cantor from the DOJ again.

• 33:18Speaker 06

  If you look at the aggregate data, our country has lost more than 100,000 farms between 2011 and 2018. This farmer's share of the retail food dollar used to hover around 40%. Now it's down to about 14. We've got four companies that control 85% of the corn seeds market. We have three manufacturers that control 95% of equipment production and maintenance. We have four companies that control over 80% of beef packing, and we have a small number of significant packers that control poultry, including chicken. The changes that have occurred in our economy around these industries and the consolidation and the concentration are alarming and often are one of the reasons why it is important

• 34:00Speaker 06

  that we remain vigilant and focus on enforcing the law when the facts and the law demand it. But it affects the local community. It affects the ability of people to maintain their way of life. It affects the bookstore. It affects the independent pharmacy. It affects the survival of the local hospital. It affects the local bank, which is important to providing capital to local businesses who want to build. These are pillars of our rural communities, which are in turn, you know, the lifeblood of our economy. And if we're not investing in preserving a competitive economy that provides opportunity for our family farmers to thrive and build and maintain and sustain those small businesses, hand them down from generation to one another, we are not only doing a disservice to our

• 34:45Speaker 06

  family farmers, but we're doing a disservice to our rural communities at large. And that is a significant problem, and it is why these cases are so important.

• 34:55Tracy Alloway?

  So there you have it. Chicken can be an engine for economic growth, too. And when farmers can't make enough money producing it, whole communities might suffer. Chicken can influence entire towns, counties, states, and economies.

• 35:09Joe Weisenthal?

  So the next time you eat a delicious chicken sandwich, or a hard-boiled egg, or even a nugget, we hope you'll think about the bigger economic picture that chicken represents.

• 35:22Tracy Alloway?

  "Beak Capitalism" is written by Tracy Alloway, Carmen Rodriguez, and Joe Weisenthal.

• 35:27Joe Weisenthal?

  This short series was produced and edited by Carmen with the help of Kale Brooks and Dashell Bennett.

• 35:32Tracy Alloway?

  It was also fact-checked by Dash and Kale.

• 35:35Joe Weisenthal?

  Blake Maples chickenized our Odd Lots theme and mixed this episode, too.

• 35:39Tracy Alloway?

  Brendan Noonan is our executive producer and Sage Baumann is Bloomberg's head of podcasts. If you enjoyed this three-part deep dive into the chicken industry, please consider leaving a positive review on your favorite podcast platform. Thanks for listening.