The Meat Racket: The Secret Takeover of America's Food Business

by Christopher Leonard

  It was an odd place for Jackson to end up: Haskell Jackson, interview by author.

  By the early 1960s, Americans were in a hurry: Steve Striffler, Chicken: The Dangerous Transformation of America’s Favorite Food (New Haven: Yale University Press, 2005), 16.

  Don Tyson saw the changes clearly: Joe Fred Starr and Blair, interviews by author, 2010, 2011.

  Don discovered a new source of credit: Joe Fred Starr, interview by author, 2011.

  As Haskell Jackson was organizing Tyson’s financial ledgers: Haskell Jackson, interview by author.

  While Tyson couldn’t escape paying taxes altogether: Carol D. Petersen, William Shear, and Charles L. Vehorn, “Cash Accounting Rules for Farmers: Differential Benefits and Federal Costs,” Journal of Economic Issues, June 1987; Haskell Jackson, interview by author.

  On Monday mornings at six o’clock: Haskell Jackson, Joe Fred Starr, and Buddy Wray, interviews by author, 2011.

  Just a year after he joined the company: Haskell Jackson, interview by author.

  Tyson’s contract farmers were largely shielded: Arkansas Valley Industries v. Freeman. 415 F.2d.713. United States Court of Appeals Eighth Circuit. 1969, https://bulk.resource.org/courts.gov/c/F2/415/415.F2d.713.19204_1.html, accessed April 20, 2013.

  As Don Tyson had predicted: Haskell Jackson, interview by author.

  A photograph from 1963 shows a young Don Tyson: Strausberg, From Hills and Hollers, 108.

  Garrett owned Garrett Poultry in Rogers: Haskell Jackson and Buddy Wray, interviews by author; Schwartz, Tyson: From Farm to Market, 57.

  Nobody in the courtroom ever expected mercy: Jim Blair, interview by author; Attorney Mark Henry, interview by author, 2011.

  New members of the Northwest Poultry Growers Association: Arkansas Valley Industries v. Freeman. 415 F.2d.713. United States Court of Appeals Eighth Circuit, 1969,. https://bulk.resource.org/courts.gov/c/F2/415/415.F2d.713.19204_1.html, accessed April 20, 2013: Strausberg, From Hills and Hollers, 104; Jim Blair, interview by author.

  By 1966, Don Tyson was eyeing his company’s next acquisition: Haskell Jackson and Buddy Wray, interviews by author; Schwartz, Tyson: From Farm to Market, 15.

  Haskell Jackson noticed that as the company grew: Haskell Jackson, interview by author.

  In 1967, John Tyson and his wife, Helen: Don Tyson, interview by author.

  CHAPTER 4: THE INDUSTRIAL ANIMAL

  Don Tyson became a billionaire: Haskell Jackson, Buddy Wray, Joe Fred Starr, interviews by author; background interviews by author.

  Between 1970 and 1978 alone: Data provided by Food and Agricultural Policy Research Institute, University of Missouri.

  By the early 1970s, Tyson Foods had moved out of its offices: Haskell Jackson, interview by author; background interviews by author.

  Don Tyson’s obsession with fast food made him: Jim Blair and Joe Fred Starr, interviews by author; background interviews by author.

  Look, we’ll dedicate a whole plant to your production: Jim Blair, interview by author.

  Although he didn’t know it, Haskell Jackson hired his replacement: Haskell Jackson, interview by author; Gerald Johnston, interview by author, 2011.

  Haskell Jackson liked to play basketball: Haskell Jackson, interview by author.

  After Haskell Jackson’s departure Gerald Johnston rose through the ranks: Gerald Johnston, interview by author.

  Jim Blair didn’t want to raise unnecessary attention: Jim Blair, interview by author.

  When Lane refused to sell to Don Tyson in 1982: Jim Blair, interview by author; SEC News Digest, July 15, 1983.

  Among Gerald Johnston’s more unpleasant tasks: Gerald Johnston, interview by author.

  One of the slaughterhouses that Tyson bought: Jerry Skeen, interview by author, 2011; Tommy Brown, interview by author.

  When Tyson bought Valmac: Background interviews by author, 2011.

  In 1969 the average American ate: Data from the National Chicken Council, http://www.nationalchickencouncil.org/about-the-industry/statistics/per-capita-consumption-of-poultry-and-livestock-1965-to-estimated-2012-in-pounds/, accessed April 23, 2013.

  In 1994 Tyson Foods made an acquisition: Tyson Foods Inc., Fiscal 2012 Fact Book, 26.

  In 1925, it took fifteen weeks to raise: N.B. Anthony, “A Review of Genetic Practices in Poultry: Efforts to Improve Meat Quality,” Journal of Muscle Foods 9 (1998), 27.

  Tyson’s wave of acquisitions wasn’t easy: Jim Blair, interview by author.

  Between 1962 and 1997, Tyson Foods bought at least thirty-three companies: Tyson Foods Inc., Fiscal 2012 Fact Book, 24-28; Paul Whitley, I Refuse to Have a Bad Day (PBWinSights, LLC, 2008), 218-220.

  In 1979 Tyson’s annual sales were $382.2 million: Tyson Foods, annual reports.

  By 1992, 88 percent of all chicken in the United States was produced: Michael Ollinger, James MacDonald, and Milton Madison, “Structural Change in U.S. Chicken and Turkey Slaughter,” Economic Research Service, U.S. Department of Agriculture (September 2000), 7.

  Jim Blair didn’t have much time to think: Jim Blair, interview by author.

  CHAPTER 5: CAGE MATCH

  During 2004, it was common to see groups of Laotian immigrants: Christopher Leonard, Arkansas Democrat-Gazette, May 30, 2004.

  And so it happened that in 2004: Boonau Phouthavong, interviews by author, 2008, 2010, 2011, 2012.

  At the end of any given week, a series of letters is mailed out from the Tyson complex: Various farmers in Waldron, interviews by author, 2004, 2008, 2010, 2011.

  If a farmer ranks near the top, he might earn 5 cents a pound for his labor: Tyson tournament settlement sheets, 2009.

  The differences in pay are severe: Tyson tournament settlement sheets, 2009.

  Around 2008, longtime farmers who raised chickens for Tyson Foods in Waldron noticed a change in their paychecks: Coy Butler and Richard Moore, interviews by author, 2008.

  Tyson and its defenders say the tournament price incentivizes farmers to work hard: C. Robert Taylor, interview by author, 2011; C. Robert Taylor, e-mail message to author, April 18, 2011.

  Boonau Phouthavong’s background made him an ideal chicken farmer: Boonau Phouthavong, interviews by author.

  Greg and Donna Owens had done well in Tyson’s tournament system for nearly a decade: Greg and Donna Owens, interview by author, 2008.

  The tournament system isn’t built to produce enduring winners: Boonau Phouthavong, interview by author.

  The chicken houses on N&N Farm: Nouk and Nue Yang, interviews by author, 2008, 2010, 2011.

  In 2009 Boonau Phouthavong discovered he was a failure as a chicken farmer: Boonau Phouthavong, interviews by author; documents obtained by author.

  C. Robert Taylor, the Auburn economist, has seen the trend clearly in the data he reviewed: C. Robert Taylor, interview by author; C. Robert Taylor, e-mail message to author, April 18, 2011.

  On Valentine’s Day, 2010, only the children were home at N&N Farm: Nouk and Nue Yang, interview by author, 2010; personal reporting by author.

  The Tyson trucks had delivered 39,000 chickens to each of the Yangs’ seven houses: Delivery log documents viewed by author.

  By the end of the second week, they had taken between 2,000 and 5,000 dead birds from each house: Mortality sheet documents viewed by author.

  The Yangs had no idea what kind of disease was burning through the birds: Nouk and Nue Yang, interview by author.

  By the time N&N Farm got up and running, Jerry and Kanita Yandell were well ensconced in their new life: Jerry and Kanita Yandell, interview by author.

  Nouk Yang spent his long weekend days alone on N&N farm: Nouk Yang, interview by author.

  On a hilltop south of Waldron, an old farmhouse has been painted in wild tropical colors: Personal reporting, photographs by author.

  With his own farm on the edge of failure, Boonau was at a loss: Boonau Phouthavong, interview by author.

  He had just signed a contract with the company: Tyson’s Broiler Producti
on Contract, 2009, obtained by author.

  After a long Saturday morning of work in 2011, Boonau Phouthavong sat on the front porch: Boonau Phouthavong, interviews by author.

  The tournament system is kept afloat by an obscure federal organization called the Farm Service Agency: Personal reporting; Farm Service Agency website, http://www.fsa.usda.gov; Jim Radintz, interview by author, 2010.

  Ron Burnett is a loan officer in Arkansas: Ron Burnett, interview by author, 2011.

  The Farmers Home Administration (FHMA) was created in the 1940s because private banks had backed out of the business of extending farm loans: A Brief History of Farmers Home Administration, U.S. Department of Agriculture, 1989, http://www.rurdev.usda.gov/rd/70th/history%20of%20farmers%20home.pdf, accessed April 23, 2013; Jim Radintz, Ron Burnett, interviews by author.

  The FMHA extended some loans to chicken farmers, but that was a small part of the agency’s business: Jim Radintz, Ron Burnett, interviews by author.

  Burnett and other loan officers noticed a change in the mid-1990s, when the FMHA got wrapped into a large agency: Ron Burnett, interview by author.

  Under the guaranteed loan program, the FSA would pay back the bank more than 90 percent of the loan value if a farmer defaulted: A Brief History of Farmers Home Administration, U.S. Department of Agriculture, 1989; Farm Service Agency website, http://www.fsa.usda.gov.

  The FSA became a pipeline of credit for chicken farmers: Documents provided by the Farm Service Agency (FSA) in response to author’s Freedom of Information Act request.

  As more Laotians moved south to buy up poultry farms: Documents provided by the Farm Service Agency (FSA) in response to author’s Freedom of Information Act request.

  The paperwork for these loans reflected the same sort of hazy math and willful blindness: Mark Henry, interview by author, 2011.

  A review of the Farm and Home Plans submitted by a single loan officer in Arkansas: Farm and Home Plans obtained from Mark Henry.

  One reason it’s difficult to put an exact dollar amount on this subsidy is that the government itself does not know: Jim Radintz, interview by author.

  According to one internal FSA audit, the agency guaranteed more than $568.9 million in new loans: Documents provided by the Farm Service Agency (FSA) in response to author’s Freedom of Information Act request.

  But a series of open records requests sent to the nation’s biggest poultry-producing states met with mixed results: Documents provided by the Farm Service Agency (FSA) in response to author’s Freedom of Information Act request.

  Jim Blair, Don Tyson’s top attorney, repeatedly reminded his boss that U.S. antitrust laws prohibited Tyson Foods from taking over the entire market: Jim Blair, interview by author.

  CHAPTER 6: PIG CITIES

  In the early days, Don Tyson’s hog farms: Bill Moeller, interview by author, 2011; The Tyson Swine Story, Tyson Foods corporate history of farming operations, March 1994; Schwartz, Tyson: From Farm to Market, 89.

  The takeover started in 1973, on a nondescript farm in northwestern Arkansas: Bill Moeller, interview by author, 2011; Schwartz, Tyson: From Farm to Market, 89.

  In 1973 there were about 736,000 hog farms in the United States, which collectively made about $7.7 billion a year: “Meat Animals, Farm Production Disposition Income, 1972–1973,” U.S. Department of Agriculture, April 1974.

  Luckily for Tyson Foods, the livestock industry was becoming more vulnerable to a takeover in the 1970s and 1980s: Striffler, Chicken: The Dangerous Transformation of America’s Favorite Food, 18; data from the National Chicken Council at http://www.nationalchickencouncil.org/about-the-industry/statistics/per-capita-consumption-of-poultry-and-livestock-1965-to-estimated-2012-in-pounds/, accessed April 23, 2013.

  Moeller’s business plan was almost thwarted by piglets: Bill Moeller, interview by author.

  By the late 1980s, Tyson had built a small network of hog farms based on Moeller’s system: Bill Moeller, interview by author; The Tyson Swine Story, Tyson Foods corporate history of farming operations, March 1994.

  Downtown Holdenville, Oklahoma, is like a ragged grid of inner-city ghetto, inexplicably dropped down into the middle of desolate prairie: Personal reporting and notes from Holdenville, May, 2011.

  When Bill Moeller saw Holdenville, he knew it was perfect: Bill Moeller, interview by author.

  Throughout the 1990s, industrial hog farms began sprouting up across rural America: Personal reporting over the years in Missouri and Arkansas.

  CHAPTER 7: THE NEXT GENERATION

  There was a sense of grandeur, by the mid-1990s, at the Tyson Foods complex: Gerald Johnston and Donald Wray, interview by author; background interviews by author.

  Tyson Foods even made a $243 million bet that it could control the seafood industry with its purchase of Arctic Alaska Fisheries: Helen Jung, “King of Poultry Decides to Bail on Fish Business,” The Seattle Times, June 20, 1999; Tyson Foods Annual Report, SEC, December 12, 1992.

  The 1990s was the age of dominance for corporate agribusiness: Tyson Foods Annual Report 1996, Form 10-K, 57.

  Having built this empire, Don Tyson finally decided it was time to step aside: Patricia May, “Tyson Names Tollett CEO, Don Tyson Remains Chairman,” Arkansas Democrat-Gazette, April 2, 1991; background interviews by author.

  Don Tyson’s lieutenants had vied for decades: Jim Blair, interview by author; background interviews by author.

  He was always “Johnny”: Jim Blair, Joe Fred Starr, and Gerald Johnston, interviews by author; background interviews by author.

  The name was his childhood name, and it stuck: Jim Blair, interview by author; background interviews by author.

  Johnny Tyson later admitted to heavy drug and alcohol abuse: David Barboza, “John Tyson Kicked Drug Habit; Takes Leadership Challenge,” New York Times, March 11, 2001, http://www.nytimes.com/2001/03/04/business/business-why-is-he-on-top-he-s-a-tyson-for-one.html?pagewanted=all&src=pm; Scott A. Johnson, “John Howard Tyson from Chicken to Beef and Pork,” Arkansas Democrat-Gazette, December 1, 2002.

  By 1991, John Tyson wasn’t ready for the top job: “Tyson Names Leland Tollett CEO,” Business Wire, April 1, 1991; background interviews by author.

  Even when Don gave Leland the title of CEO in 1991: Tyson Foods Proxy Statement, 1999.

  Under these circumstances, Leland Tollett exercised what authority he could: Gerald Johnston and Donald Wray, interviews by author; background interviews by author.

  Investors weren’t impressed: Historic stock prices for Tyson Foods provided by Yahoo!Finance.

  Leland Tollett quit in 1998: “Tyson Chairman Leland Tollett to Retire; John Tyson Elected Chairman of Board; Wayne Britt Chosen CEO,” PR Newswire, September 25, 1998.

  In September 1998, Tyson’s senior managers were called to the company’s auditorium: Background interviews by author.

  But Johnny Tyson had made at least one change: Barboza, New York Times, March 11, 2001, http://www.nytimes.com/2001/03/04/business/business-why-is-he-on-top-he-s-a-tyson-for-one.html?pagewanted=all&src=pm.

  The company’s Seafood Group: Tyson Foods Inc. Annual Report, 2001, http://media.corporate-ir.net/media_files/irol/65/65476/reports/2001AR_2.pdf.

  Tyson’s stock price sank steeply: Tyson Foods historic stock prices provided by Yahoo!Finance.

  Wayne Britt left the company in April 2000: “Britt Announces His Departure as Tyson CEO; Grandson of Founder to Take Post as Poultry Producer Tries to Rebound,” Arkansas Democrat-Gazette, April 13, 2000; background interviews by author.

  By 1994, taxpayers were spending $7.9 billion every year: “Agricultural Income and Finance Situation and Outlook. Rural Economy Division, Economic Research Service,” U.S. Department of Agriculture, September 1995, http://usda.mannlib.cornell.edu/usda/ers/AIS/1990s/1995/AIS-09-25-1995.asc.

  In 1998 taxpayers handed over $12.4 billion to farmers: E.C. Pasour Jr. and Randal R. Rucker, Plowshares and Pork Barrels: The Political Economy of Agriculture (Oakland: Independent Institute,
2005), 134.

  For industrial hog producers alone, Freedom to Farm delivered about $947 million a year in savings: Elanor Starmer and Timothy A. Wise, “Living High on the Hog: Factory Farms, Federal Policy, and the Structural Transformation of Swine Production,” Global Development and Environment Institute, Tufts University, December 2007, 3, http://www.ase.tufts.edu/gdae/Pubs/wp/07-04LivingHighOnHog.pdf.

  As Don Tyson pulled away from daily operations: Jim Blair, interview by author.

  Johnny’s early tenure as CEO was rocky: Barboza, New York Times, March 11, 2001; http://www.nytimes.com/2001/03/04/business/business-why-is-he-on-top-he-s-a-tyson-for-one.html?pagewanted=all&src=pm; background interviews by author.

  None of this seemed to deter Bill Moeller: Jim Blair, interview by author.

  There was only one path to take: “Tyson Signs Definitive Agreement to Sell Gorges/Quick-to-Fix Plants; Company Exits Beef Business to Concentrate on Chicken,” PR Newswire, October 21, 1996.

  The deal fell through because Smithfield liked to operate bigger hog barns: “Tyson and Smithfield Terminate Sale of Pork Group,” PR Newswire, December 6, 1999.

  Tyson’s stock price continued to fall: Tyson Foods historic stock prices provided by Yahoo!Finance.

  Just about everybody hated Iowa Beef Processors: Jeffrey L. Rodengen, The Legend of IBP (Write Stuff Enterprises, Inc., 2000).

  IBP had large slaughterhouses scatterered through the Great Plains: IBP 4Q report for 1999 earnings.

  Tyson, by contrast, earned profits of $230 million: Tyson Foods 4Q report for 1999 earnings.

  Johnny decided he wasn’t going to let that happen: Jim Blair, interview by author; background interviews by author.

  In December 2000, Tyson Foods submitted a bid to buy IBP: “Tyson Foods, Inc. Offers to Acquire IBP, Inc. in Transaction Valued At $4.2 Billion,” PR Newswire, December 4, 2000

  Gary Combs, an Arkansas real estate developer: Gary Combs, interview by author, 2011.

  If consummated, Tyson’s merger with IBP: David R. Moeller, “The Problem of Agricultural Concentration,” Drake Journal of Agricultural Law, 2003.

  Lawyers for Tyson Foods were working feverishly: Jim Blair, interview by author.