Between the Obama administration’s own backpedaling and Congress’s opposition, the GIPSA rule was dead. A final version of the rule was released in December. It enacted one reform, one that allowed poultry farmers the right to sue meat companies in court if they had a contract dispute. Most contracts had previously forced farmers into private arbitration hearings to settle disputes, keeping them away from unpredictable juries. The final rules also contained new guidelines suggesting when a poultry company could cut off a farmer or require a farmer to invest more money in his chicken houses. Those guidelines did not have the binding power of new rules, Vilsack admitted, but he hinted that the new measures would act as a deterrent for poultry companies.
* * *
A full year and a half after the joint workshops between the U.S. Departments of Agriculture and Justice were completed, no major new policy recommendations had been issued by either department. No major antitrust cases were filed. No joint report was issued.
The Department of Justice released its own small report on the workshops, with little fanfare, in May 2012. The twenty-four-page document enumerated all the problems and abuses the department learned about during the workshops, while outlining the unprecedented level of market concentration that existed after a wave of company mergers. But in its brief conclusion, the report mostly focused on why the Justice Department couldn’t do much to solve the problems. Antitrust laws weren’t made to solve many of the problems identified by the hearings, the report said.
The Justice Department pointed out that it had enhanced its cooperation with the USDA, helping that agency prosecute cases. It also said it would boost its efforts to block mergers that were anticompetitive. But the only major case the report could point to as an example of its efforts was one filed by the Bush administration in 2008, which blocked the merger of meatpackers JBS and National.
By the spring of 2012, the Obama administration had lost most of its key architects for a new agricultural policy. In May John Ferrell quit and went back home to Iowa, where he started studying for an advanced degree. Christine Varney quit later that summer and took a job with the elite law firm Cravath, Swaine & Moore. Varney assumed a prominent spot at the firm’s antitrust practice, where she would help companies fight off challenges from the government. Ethics rules prohibited her from immediately protecting companies like Tyson Foods, which had been the focus of federal litigation under her watch. But even if Varney didn’t directly take up Tyson’s fight against stronger antitrust enforcement, the Obama administration had lost one of its toughest fighters.
Shortly after the GIPSA rule was defeated, Dudley Butler resigned. He returned to his family farm in Mississippi and started up a small law practice that represented farmers.
During the spring of 2012, the presidential campaign entered into full swing and Secretary Vilsack continued publicizing the campaign narrative that U.S. agriculture was an economic success story. Vilsack made public appearances extolling the job creation and income being generated in rural America, even as the broader job market remained tepid. It was clear that Barack Obama did not plan to campaign on his achievements as an industry reformer.
Vilsack was correct when he said that the agricultural sector, overall, was booking record profits, at least when it came to the industrial meat business. Billions in profits were being generated in meat producing towns like Waldron, Arkansas; Dodge City, Kansas; and Emmetsburg, Iowa.
But the existence of those profits told only half the story. The other half of the story was hidden and more complicated. And the other half of the story could be seen only after asking one simple question: If record profits were being made, who got to keep them?
* * *
1. The latter two groups, the NCBA and the NPCC, are strange entities in that they purport to represent “producers” in the broadest term, meaning both farmers and the big meat companies that buy their animals. Both groups came out against the GIPSA rule.
CHAPTER 13
* * *
Don’s Horizon
(2011–2012)
ONE OF Don Tyson’s houses is a palatial estate in the countryside south of Springdale, with big windows and a commanding view of the Ozark hills and bluffs that surround it. The land it overlooks is rugged and remote. It is land where generations of settlers had failed to grow much of anything on the rocky soil, but it’s where Don Tyson had built a multibillion-dollar empire whose tendrils reached from South Dakota to Mississippi, to Brazil, India, and China.
During the winter of early 2011, a lot of people stood and stared out those windows. They took in the view of barren trees and hard, cold ground. The emptiness of the vista reflected the sorrow of the moment. They had come to say goodbye to Don Tyson. His intimate circle of friends and family had learned he was dying.
Don Tyson had struggled for years with liver cancer, largely outside the public view. He visited clinics and doctors secretly, battling the disease. In 2010 his prognosis worsened, and the cancer progressed. By all logical predictions, it seemed he had just a few months to live.
Don Tyson quietly got his affairs in order. He structured Tyson Foods in a way that his leadership over the company would endure for years after his passing. With his approval, the company promoted Donnie Smith to the position of CEO. Smith, the vice president over poultry operations who had overseen the production cutbacks during 2008, seems a man cut from Don Tyson’s own image. Smith has a pronounced southern twang, a kind of deceptive humbleness about him that resembled Don’s. And Smith had learned the meat business at the feet of Don’s lieutenants Leland Tollett and Buddy Wray. Don also structured his special class of voting stock in a way that passed control to his son, Johnny, and a trusted cadre of advisors and old friends like Tollett.
Even in the last years of his life, Don Tyson was pushing for visionary change and growth at the company that carried his name. His imagination was captured by the idea of taking Tyson Foods global. He kept color photos on his desk showing new poultry plants being built on the freshly cleared ground of Brazilian forests, and he watched over projects for new poultry plants in Asia.
Don Tyson saw the real opportunity in countries like Brazil, India, and China. Consumers there resemble U.S. shoppers back in 1960. The middle class is growing in places like Brazil, and it has more money to spend on meat and eggs. At the same time, people are getting busier. Fast-food chains are expanding in the developing world, with more drive-through windows opening every day. Tyson Foods planned to replicate its growth curve in the United States by catering to the growing middle class of the developing world.
In September 2008, Tyson Foods bought two poultry companies in Brazil, and it bought a majority ownership stake in a third. Tyson Foods announced three joint ventures in China, where it bought majority ownership in three big slaughterhouses. In India, Tyson bought a majority share of a poultry company based in Mumbai. These companies were Don Tyson’s beachheads, the forward bases from which he would infiltrate the rural economies that represented billions in annual sales.
But it became clear in late 2010 that Tyson’s global conquest would be left to others. Don Tyson made the final arrangements for his lieutenants to watch over the company, and he seemed ready to let go. He retreated to the place he loved best, his home in the Ozark hills of Arkansas. His wife, Jean, had died a few years before, the two of them estranged until the end. But Don was still surrounded by family. He presided over a big Christmas dinner, with Johnny and Johnny’s now-grown children. Don seemed happy and energetic on Christmas night.
Over the next two weeks, a parade of visitors streamed through the house. Friends, children, and girlfriends, all of them saying their goodbyes.
One of the guests was a young woman who had just turned twenty-nine years old. Her name was J.J., and she lived in Texas most of the time but traveled a lot. She had an unmistakable roundness in her cheeks and a broad arch to her eyebrows. She also had a special kind of confidence, a loquaciousness and charisma. In short, she very clo
sely resembled her father, Don Tyson. She looked a lot more like her dad than her half-brother, Johnny, who had been heir to Don’s kingdom.
J.J. is decades younger than Johnny Tyson, the daughter of one of Don’s girlfriends. Unlike Johnny, J.J. never worked for Don, and because of that she knew her father better in some ways. She saw the man outside of the corporate headquarters. The Don Tyson J.J. knew was a man who spent a lot of his time circumnavigating the globe on his yacht, and he often kept J.J. at his side.
J.J. Caldwell-Tyson was born in 1981 to Ramona Caldwell, an attractive blond woman from Fayetteville who was Don Tyson’s longtime companion. Ramona Caldwell never became Don’s wife, but she never became an exgirlfriend, either. Ramona and J.J. lived in a number of apartments over the years, in Little Rock and London, and Don Tyson often stayed with them when he traveled on business. He was always “Dad” to J.J.
Her childhood spanned the globe. In his later years, Don Tyson became dissatisfied with his yacht, Tyson’s Pride, because it couldn’t carry enough fuel for long, deep-sea voyages. So he bought a commercial tuna vessel and retrofitted it to be his home ship. He called it the Horizon.
J.J. spent a lot of time on the Horizon. She sailed it from Hawaii to Tahiti. Rather than regularly attending elementary school, J.J. traveled at Don’s side to Tokyo, Tanzania, and Australia. They went on daytrips that Don called “cultural projects.” Don hired drivers and guides and they toured different countries.
When Don was out on the open ocean, he woke up early to go fishing. He disembarked from the Horizon on smaller fishing vessels, like the Tyson’s Pride, and headed out into deep waters. Out there on the back of the fishing boat, with whitecaps breaking against the hull and the world wide open around him, Don was in his own paradise.
Don Tyson often sat quietly, but J.J. knew there were jet streams of information swirling in his head. At a moment’s notice, he could tell his daughter what the current cattle prices were, or how much soybeans were fetching on global markets. He chewed over business strategies and concocted new plans.
Even with a fishing line in the water, Don’s life revolved around work. His bone-deep desire to make money never left him. He scheduled trips that also involved working stops, like visiting new sites for Tyson Foods plants in Brazil. There was never a moment when Don Tyson sat back and said: This is enough.
Don never pushed J.J. to join the business. This might have been born from hard-earned wisdom he gleaned at Johnny Tyson’s expense. J.J. remembered the dark time when Don Tyson had to fire his son, and how much it seemed to hurt him.
— It’s the hardest thing I’ve ever had to do. I’ll always love Johnny, Don said. Don and Johnny seemed to overcome whatever hard feelings might have developed from their time at work together, and they still saw each other or talked on the phone almost every day.
J.J. hurried to Arkansas when she heard Don was losing ground against cancer.
She spent her days in the house as visitors came and went. She remembers her father reading a long letter he received from a perfect stranger, a woman who emigrated to the United States some twenty years before. Her first job in the country was at a Tyson Foods plant. Like so many who arrived here barely speaking the language and with few job skills to speak of, a job at Tyson Foods had been the first rung of this woman’s American experience.
It was only then that it really sank in for J.J. how enormous her father’s company had been, and how many lives he had touched.
* * *
Jim Blair drove down the lonely country roads, out to Don Tyson’s secluded house. Blair was getting older. Years of vigorous exercise, some of it on the tennis courts behind his house, had taken their toll. His hips bothered him some mornings, and he loosened up with long walks along the hillsides by his home. It wasn’t easy, getting old, and it wasn’t easy watching his best friend die. After Christmas, Don was weakening more by the day. He had trouble talking, and he seemed to be in pain.
Jim raided Don’s wine cellar during one visit and brought up one of the finest bottles. He knew that Don loved a good drink.
— Does it taste good? Blair asked.
— Nothing tastes good, Don said.
Don Tyson didn’t have any illusions about what was happening.
— You know, Don told Blair, I’ve been preparing for this for thirty years.
Blair tried to comfort him.
— Well, you’ve done everything you’ve wanted to do, you’ve seen everything you’ve wanted to see. You’ve slept with every woman you’ve wanted to sleep with.
Don groaned.
— Marilyn Monroe . . .
Blair smiled later at the memory of it. His old friend, dying, still had his eyes on the horizon, and the one woman he never took to bed.
* * *
On Sunday, January 4, 2011, Don Tyson watched the Arkansas Razorbacks play Ohio State in the Sugar Bowl with Ramona and J.J. Don Tyson usually paced during football games and hollered to support his team. He cheered on the Razorbacks that Sunday, and even though they lost, he seemed content.
Hours later, he went into shock. On Monday, the family came to sit by his bedside, though he couldn’t speak.
Don’s daughter Cheryl sat on the bed and held his hand. Seeing that J.J. was in the room, Cheryl patted the bed and gestured for her to sit down. Don’s daughters, born decades apart and by different women, both held his hands.
In the early morning hours of January 6, Don Tyson passed away.
* * *
Don Tyson’s funeral was a private affair. One old friend traveled many miles to attend it. President Bill Clinton was solemn as he walked to the front of the congregation to eulogize his old friend.
“I wasn’t very important in Don Tyson’s life, but he was quite important in mine,” Clinton said.
Clinton recalled how Don Tyson supported Clinton’s earliest campaign for Congress back in 1974, and how he later backed Clinton’s run for the White House in 1991. Clinton recalled the time Don Tyson let him drive his Bentley.
“And it was like driving a big boat on a totally calm lake. I will never forget it,” Clinton said. More than the fun they had together, Clinton remembered what he had learned from his early benefactor.
Don Tyson “had a realistic sense of what should and shouldn’t be done. And he was always straight with me, and, I suspect, with all of you. I’ll never forget when he came to the White House to see me once. He seemed a little bit awe-inspired, and yet, completely comfortable. . . . He was an astonishing man.”
The people who mourned Don Tyson mourned the man. But many also mourned the loss not just of a specific person, but a kind of person. A man born in rural poverty in the depths of the Depression. A small-town kid who inexplicably dreamed on a global scale and saw a future for himself that was impossibly larger than the world he knew. And a man who also, somehow, managed to achieve that impossibly ambitious dream.
Don Tyson was buried that icy weekend in January, but his legacy was a restless thing that never quit moving. He left behind a company that was working and moving and growing around the clock, even as he lay dying. Tyson Foods was a kind of perpetual motion machine, an entity with its own interests and guiding principles. It was built to expand and to exert control wherever it could.
Don Tyson left behind a company that reaped $28.4 billion in annual sales. It controlled a network of more than 6,000 industrial chicken farms that grew about 2.1 billion birds every year. The company slaughtered 7.2 million cows annually, killing more than 19,700 every day. It killed 20.5 million pigs every year, many of them born at the company’s contract farms in Oklahoma.
Tyson’s meat was eaten by almost every American consumer, whether they realized it or not. The company had become the biggest U.S. supplier to fast-food restaurants, cafeterias, and grocery stores, producing about a fifth of all the meat eaten in the United States. This was the thing Don Tyson left behind. It wasn’t just a company, but a new system of agriculture.
* * *
/> On February 4, 2011, Donnie Smith woke up early. He had a big morning ahead of him. Smith would be announcing, in the long-held tradition of the company’s CEO, the latest financial results for Tyson Foods. Smith would sit at a table with other senior executives and talk into a speakerphone, telling investors and stock analysts just how well Tyson Foods had done with their money.
The previous year had been one of the worst for America’s economy since the Great Depression. The unemployment rate was 9.7 percent at the beginning of 2010, and it hovered at that level through most of the year. The U.S. economy had shed millions of jobs during 2009 and there wasn’t any sign that those jobs were coming back. In the aftershocks of the financial crisis, Americans were watching their incomes shrink and the cost of living rise.
In the midst of all this, Donnie Smith had some very good news to report to Tyson’s investors. As he settled into his seat that morning and the speakerphone crackled to life, Smith sounded confident and upbeat. He spoke self-assuredly, almost cockily, the way that a quarterback might after winning the big game.
“Good morning everyone, and thanks for joining us,” Smith said. “If you read our press release this morning you saw that we set a record in our first quarter of the fiscal year.”
Tyson Foods had just reported an operating profit of $498 million for the previous three months. The company had sold $7.6 billion in products. And the record profits were part of a trend. Just a few months earlier, Donnie Smith had reported on a similar conference call that during the previous fiscal year, Tyson Foods earned $780 million in pure profit, breaking its own records. The company’s total revenue had risen almost 7 percent to $28.43 billion in one year.
The Meat Racket: The Secret Takeover of America's Food Business Page 33