The public comment from Tyson Foods on the GIPSA rule didn’t look like a letter: Comment from Tyson Foods, obtained by author from U.S. Department of Agriculture archive of public comment on GIPSA rules.
The final hearing in the series of USDA/DOJ workshops: “Workshop on Agriculture and Antitrust Enforcement Issues in Our 21st Century Economy,” http://www.justice.gov/atr/public/workshops/ag2010/dc-agworkshop-transcript.pdf, December 8, 2010.
David Murphy arrived at the hearing with some heavy boxes: David Murphy, interview by author.
During the course of 2011, the meat industry’s intensified opposition to the GIPSA rule began to foster deep divisions: J. Dudley Butler, interviews by author; background interviews by author.
To the pragmatists, the GIPSA rule was starting to look like a disaster : Butler, interviews by author; background interviews by author. Accounts of meetings are based on the accounts of at least two people who attended the meetings reported here. Secretary Vilsack refused several requests to comment on the meetings. U.S. Department of Agriculture Public Affairs Director Justin DeJong refused to allow Anne Cannon MacMillan or Krysta Harden to provide comment or responses to the accounts of multiple people who attended meetings with MacMillan and Harden.
On a chilly Thursday morning in October 2011: “Agriculture Secy: US Having Record Year in Agriculture,” MSNBC, Morning Joe, aired October 6, 2011.
Inside GIPSA, it became clear that Dudley Butler had lost the fight: J. Dudley Butler, interviews by author; background interviews by author.
But the so-called “competitive injury” provision had become a political liability: Remarks by Senator Pat Roberts to the Committee on Agriculture, Nutrition and Forestry, Washington, D.C., June 28, 2011, transcript available at http://www.gpo.gov/fdsys/pkg/CHRG-112shrg71631/html/CHRG-112shrg71631.htm.
The USDA decided it would repropose the “competitive injury” rule: “USDA Implements Provisions from 2008 Farm Bill to Protect Livestock and Poultry Producers,” http://www.usda.gov/wps/portal/usda/usdamediafb?contentid=2011/12/0508.xml&printable=true&contentidonly=true, accessed December 8, 2011.
The House of Representatives passed a spending bill that summer that banned GIPSA from using any money: Christopher Leonard, “Congress Set to Cut Money for Meat Industry Reform,” Associated Press, November 16, 2011.
After the bill was released, meat industry lobbyists gave a special public thanks: Statement from National Pork Producers Council e-mailed to author.
The Department of Justice released its own small report on the workshops: “Competition and Agriculture: Voices from the Workshops on Agriculture and Antitrust Enforcement in Our 21st Century Economy and Thoughts on the Way Forward,” http://www.justice.gov/atr/public/reports/283291.pdf, May 2012.
Shortly after the GIPSA rule was defeated, Dudley Butler resigned: Christopher Leonard, “Top Meat Antitrust Regulator Quits,” Associated Press, January 19, 2012; J. Dudley Butler, interview by author.
CHAPTER 13: DON’S HORIZON
One of Don Tyson’s houses is a palatial estate: Jim Blair, interview by author.
Don Tyson saw the real opportunity in countries like Brazil, India, and China: Christopher Leonard, “Don Tyson Says Meat Company Seeks Global Growth,” Associated Press, November 3, 2008.
But Don was still surrounded by family: J.J. Caldwell-Tyson, interview by author, 2011.
When Don was out on the open ocean, he woke up early to go fishing: J.J. Caldwell-Tyson, interview by author, 2011.
Don and Johnny seemed to overcome whatever hard feelings: Statement from Tyson Foods, May 2013.
Jim Blair drove down the lonely country roads: Jim Blair, interview by author.
On Sunday, January 4, 2011, Don Tyson watched: Jim Blair, interview by author, March 2011; J.J. Caldwell-Tyson, interview by author.
President Bill Clinton was solemn as he walked: Transcript of remarks by President William Jefferson Clinton at the funeral of Don Tyson, Springdale, Arkansas, January 8, 2011, obtained by author.
Don Tyson left behind a company that reaped $28.4 billion: Tyson Foods Annual Report 2010, Form 10-K, 17.
On February 4, 2011, Donnie Smith woke up early: Donnie Smith, CEO Tyson Foods, Earnings Call Transcript discussing Q1 2011 results, February 4, 2011.
The unemployment rate was 9.7 percent: “Unemployment rate and civilian labor force, January 2008–December 2010,” http://www.bls.gov/opub/ted/2011/ted_20110111_data.htm. January 11, 2011.
In the midst of all this, Donnie Smith had some very good news: Donnie Smith, remarks on Earnings Call, February 4, 2011.
Smith’s prediction turned out to be correct: “Tyson Reports Fourth Quarter and Fiscal Year 2011 Results,” November 2011.
After 2011, price hikes and production cuts became central to Tyson’s business model: Analysis by author of Tyson Foods Annual Reports for fiscal years 2007, 2008, 2009, 2010, 2011, 2012.
The operating profit margins of the nation’s top four meat companies doubled: 2011 P&SP Annual Report, Packers and Stockyards Program, March 2012, 32.
By the middle of 2012, the plan was working well: “News Release, Tyson Reports Second Quarter and Six Months Fiscal 2012 Results,” http://ir.tyson.com/phoenix.zhtml?c=65476&p=irol-newsArticle_Print&ID=1692164&highlight=, accessed April 19, 2013.
But it is possible, using government data: Analysis by the author and Casey Smith, University of Missouri student and IRE database researcher, of county-level income data provided by the U.S. Bureau of Economic Analysis.
Berryville’s First National Bank sits on a corner: Robert West, interview by author, 2011.
Tyson Foods used to recruit new contract farmers: “Grow with Tyson: A Resource for Independent Growers for Tyson Foods, Inc.,” http://www.growwithtyson.com/overview-of-contract-poultry-farming/, accessed April 19, 2013.
INDEX
“accrual” accounting, 72, 73
activist groups, 257, 262, 279, 283, 294, 317–18
Administrative Procedure Act (1946), 289
Agricultural Adjustment Act (1933), 57–58
Agricultural Producer Protection Act (2000), 252
agriculture, industrial, 6, 7, 10, 159, 246–47, 268, 294, 296, 314
biological and chemical innovations in, 5–6, 21, 52, 69, 92, 108–9, 157, 235, 314
corporate oligarchies and concentration of power in, 12, 231, 232–33, 235, 246, 249, 254, 261–62, 280–81, 282, 302–3, 316
declining profits for farmers in, 7, 69–70, 79, 269, 281, 294
in disappearance of independent/family farms, 5, 49, 50, 70, 184, 191, 194, 196–97, 202, 205, 231, 232, 236, 238, 246, 281, 298
rise of, 69–70, 110, 198
specialization in, 69, 94, 166
USDA/DOJ workshops on growing power of corporations in, 12, 279–82, 287, 288, 289, 294–95, 298, 302–3
see also farming and agriculture; meat industry; specific types of farms and industries
Agriculture Act (1961), 67
Agriculture Department, U.S. (USDA), 45, 141, 153, 175, 202, 246, 263, 265, 269, 273, 275, 276, 280, 281, 282, 289, 290, 291, 294, 295, 297, 300, 301, 302, 327n
beef grades given by, 213, 215–16, 222
central planning regime of, 165
DOJ’s joint public workshops with, 12, 279–82, 287, 288, 289, 294–95, 298, 302–3
Farmers Home Administration of, 140
Farm Service Agency of, 139–45
labor disputes and, 84–85
OMB meetings with, 298–99
“Visions for the Millennium” event of, 244–46, 250
see also Grain Inspection, Packers and Stockyards Administration
Agri-Pulse industry news service, 291
Ainsworth Feed Yard, 219
Allen, Bob, 187–89, 191–94
brain aneurysm of, 197–98, 199, 200
debts of, 199–200
Tyson’s contract with, 193–94, 198
American Meat Institute, 251, 285, 286, 288, 289
Anderson,
Andy, 169–70
Ankeny, Iowa, 12, 279–82, 287, 298
antibiotic drugs, 7–8, 221
antitrust laws, 12, 99, 145, 220, 248–49, 251, 254, 271, 277, 283, 284, 299, 301, 302
Antonio (cowboy), 207–8, 210
Archer Daniels Midland, 235
Arctic Alaska Fisheries, 159
Arkansas, 42, 48, 53, 57, 58, 60, 64, 67, 68, 82, 83, 87, 99, 138, 143, 144, 155, 158, 191, 192, 243, 244, 256, 262, 314, 316
immigrant workers in, 45–46, 114, 118–20, 137, 141
lack of contract farming regulation in, 257, 280
Ozark hill country in, 48, 55, 58, 106, 305, 306
Arkansas, University of, 53, 59, 65, 68, 74, 77, 151, 162, 314
Arkansas Valley Industries, 84
Armour and Company, 76, 84, 149, 169, 214
Arnold, Thurmond, 277
Asian immigrants, 212
see also Laotian immigrants
Auburn University, 121, 132
auctions, cattle, 213, 219, 254
Avalos, Edward, 289–91
Baker, James R., 246–48, 249, 254
balloon loans, 200
banks, 1, 38–39, 55, 67, 98, 136, 138, 268, 281, 317
contract farmers extended loans by, 23, 26, 68, 70, 125, 127, 139, 140, 141–43, 144, 156, 188, 200, 247, 317
“dollar auctions” of, 57
Don Tyson’s risky loans from, 58–59, 67, 75, 78, 98
federal farm loan program and, 139–45
Barnicle, Mike, 298
Bass Brothers Enterprises, 101
Beef, 225
beef industry, 54, 92, 169, 171–72, 247, 308
battles between producers and meatpackers in, 208–9
biological innovations in, 6, 314
“boxed beef” in, 170–71, 172
cattle buyers in, 213–16, 217–21
centrally controlled system in, 215, 229, 266
“chickenization” of, 149, 152–53, 171–72, 173–74, 209, 216–17, 226, 242, 283
consolidation of power in, 5, 153, 171, 173–74, 208, 214, 215, 222, 229, 235, 248, 249, 280–81
corporate culture of, 210, 211, 215, 216, 218, 221
corporate oligarchy in, 5, 153, 171, 176, 208, 209, 212–13, 214, 218, 219, 220, 229, 235, 248, 249, 269, 280–81, 284
cutting of costs in, 212
declining consumer consumption in, 152, 158, 169, 171, 208, 242
declining quality of meat in, 153, 216, 224, 225
government regulations in, 66, 84–85, 220, 248, 254, 284
IBP’s dominance in, 169, 171, 174
lawsuits filed in, 269
lobbyists in, 210–11, 223, 285, 286, 295
loss of open, competitive market in, 5, 173–74, 209, 212–13, 217, 218–20, 221–23, 224, 229, 269
meatpacking sector in, see meatpackers
rising consumer prices in, 248, 269, 294, 313
slaughterhouses in, 169–70, 172, 174, 211–12, 215, 221, 226, 311
Tyson’s business model adopted in, 149, 173–74, 209, 212n, 223, 225
Tyson’s dominance in, 180, 208–9, 281n
USDA grades in, 213, 215–16, 222
vertical integration in, 5, 172, 209, 285
volatile market cycles in, 209, 213
Zilmax used in, 225, 226
see also cattle ranching; feedlots, cattle; meat industry
Beef Marketing Group (BMG), 222, 223
Berryville, Ark., 8, 120, 150–51, 315, 317
Bethel, Bill, 35, 36, 38
Blair, Jim, 22–23, 82–83, 84, 94, 102, 145, 168, 176, 308–9
background of, 82, 99
Don Tyson’s estate planning by, 166–67
in merger and acquisition deals, 98–99, 100–101, 109–10
Blunt, Roy, 302
Bond, Richard, 180, 264
Borck, Lee, 222–24, 226, 284
“boxed beef,” 170–71, 172
Brazil, 305, 306
breeding techniques, 21, 53, 62, 92, 108–9, 157, 159, 167, 202–3, 237
Breimyer, Harold F., 230–31, 233, 260, 316
Britt, Wayne, 163–64
Brown, Tommy, 29–32, 103
Burger King, 91, 92, 107, 108
Burnett, Ron, 139–40, 141
Burris, Chris, 221
Bush, George W., 264
Bush administration, 175–76, 254, 255, 277, 303
butchers, 66, 170, 171, 178
Butler, Coy, 118, 119
Butler, J. Dudley, 282–83, 289, 296, 297, 298, 299, 300, 301, 302, 303
Cachu (cowboy), 207–8, 210
Caldwell, Ramona, 307, 309
Caldwell-Tyson, J. J., 307–8, 309
California, 41, 42, 296
Cardoza, Dennis, 296
Cargill Inc., 203, 208, 209, 212, 217, 218–19, 220, 225, 235, 241, 246–47, 251, 253, 257, 286
Carson, Gene, 209–11, 213–17, 220–21, 224, 226
“cash-basis” accounting, 72–75
cash crops, 54, 55, 57, 58, 64, 165, 166, 186, 229, 264–65, 308
cattle buyers, 213–16, 217–21
cattle drives, 207–8, 210, 211
cattle ranching, 1, 25, 85, 116, 140, 149, 151, 159, 170, 173, 207–8, 234, 246, 266, 288, 298
Certified Angus Beef marketing campaign of, 225
depression of prices in, 84, 208, 213, 248, 269, 294
independent businesses in, 145–46, 158, 181, 188, 190, 213, 234, 235
industrialization in, 5, 152–53, 172, 181, 208, 209, 211
legislative attempts in creating protections for, 284, 285
in pre-industrialized era, 208, 211, 213, 248
raising of cows in, 54, 172–73
see also beef industry; feedlots, cattle
Center for American Progress, 277
Chambers Bank, 1, 26, 38–39, 141, 142
chicken farming, industrial, 9, 21, 29, 68, 92, 117–18, 120–21, 135–36, 152, 153, 195, 209, 230, 272, 274, 280, 326
bankruptcies in, 9, 39, 40, 41, 42, 44–45, 46, 113, 118, 127, 137–38, 139, 140, 143, 188, 246, 256–57, 292, 293
depression of prices paid in, 31, 46, 79, 114–15, 116–18, 119, 122, 126, 127, 132, 188, 269, 275, 294, 312
diseased birds in, 9, 17–20, 27–29, 32, 36, 37, 38, 39–40, 41, 43–44, 103, 109, 118, 120, 133–35, 136, 137
federal loan program and subsidies for, 139–45
high-costs, low profitability of, 19, 22–23, 31, 32, 34, 39, 45, 69, 71, 117, 124, 126, 127, 128, 130, 131, 132, 134, 136, 137, 138, 139, 140, 143, 188, 273, 293
increasing complexity of, 70–71
labor disputes in, 84–85
Laotian immigrants in, 45–46, 113, 114–15, 118–20, 123, 124–25, 127–31, 132–37, 138–39, 141, 142–43
legislative attempts at creating protections in, 275, 284, 287–88, 291–94, 295, 299–301, 302
Northwest Poultry Growers Association in, 79, 84, 85
opposition to GIPSA rule in, 291–93
potential unionization threat in, 83–84
raising of birds in, 5–6, 18, 29–30, 59, 108, 109, 120–21, 126, 130, 150, 151, 153, 154
tournament system of pay in, 24, 33, 105–6, 114–17, 119, 120–22, 124–25, 126, 127, 130–32, 137, 139, 145, 256, 257, 284, 292, 293–94, 299–300, 301
trucking log errors in, 34–35
Tyson’s close monitoring of, 20, 24, 33, 34, 115, 126, 130, 131
Tyson’s fast-food strategy and, 30–31
Tyson’s tight control over, 17n, 21, 23–25, 33, 38, 43–44, 62, 83–84, 85, 103, 114–15, 117, 120, 131, 134, 138–39, 159, 173, 232, 237, 257, 310, 312
see also contract farmers; poultry industry
chicken farming, pre-industrial, 26, 34, 42, 52, 53, 58
chicken houses in, 52, 53, 54, 129
John Tyson in seeking control of, 54–56
riskiness and unpredictability in, 53, 54, 55, 68, 70, 122, 140
chicken houses, 9, 17, 18, 19, 20, 22, 26, 27–28, 42, 44, 68, 69
, 71, 92, 113–14, 121, 125, 138, 150, 294, 299
bank loans for, 26, 70, 127, 143, 144
equipment in, 23, 27–28, 30, 32, 41, 52, 53, 69, 123, 127, 128–30, 131, 134, 293
high costs of, 23, 26, 31, 32, 39, 41, 71, 113, 123, 127, 128, 130, 131, 134, 140, 293
hog barns as modeled on, 154, 155, 183, 192
in influencing tournament ranking, 132
of N&N Farm, 128–30, 132, 133, 134, 136
pre-industrial, 52, 53, 54, 129
size of, 23, 70, 129
chicken nuggets, 95, 106, 107, 163, 178, 265, 274
chicken tenders, 106–7
China, 305, 306
choice-grade beef, 213, 215–16, 222
Christian (cowboy), 207–8, 210
“Class B” shares, 162
Clinton, Bill, 245, 254, 262, 268, 310
Clinton, Hillary, 261, 262–63
Clinton administration, 277
Cobb, Bruce, 219
Cobb-Vantrass, 108–9
Combs, Carla Tyson, 175
Combs, Gary, 175
Communists, 123, 138
ConAgra Foods, 232, 251, 261, 263, 269, 286
Congress, U.S., 67, 72, 85, 143, 165, 229, 248, 253, 286, 296, 310, 317, 318
opposition to GIPSA rule in, 290, 291, 296, 297, 300–302
2008 farm bill in, 283
2012 farm bill in, 289, 290–91
Consolidated Beef Producer, 219
Constitution, U.S., Commerce Clause of, 253
consumer advocacy groups, 318
contract farmers, 7, 58, 80, 124, 209, 229, 231–32, 247, 272, 274, 316, 326
bank loans extended to, 23, 26, 68, 70, 125, 127, 139, 140, 141–43, 144, 156, 188, 200, 247, 317
in beef industry, 152–53, 172, 173, 209, 210, 211, 212n, 218, 219, 220, 221–23, 224, 225, 226, 227, 247, 269, 284
corporate recruiting of, 26, 45, 156, 187–89, 236, 318–19
debts and financial struggles of, 3, 10, 18, 19, 20, 23, 28, 30, 31, 32, 38–39, 40, 41–42, 44–45, 71, 83, 113, 114–15, 119, 127, 134, 136, 137–38, 143, 188, 193–94, 196, 199–200, 230, 239, 246, 257, 267, 274, 292, 293, 317
depression of prices paid to, 4, 5, 7, 25, 31, 35, 46, 79, 114–15, 116–18, 119, 122, 126, 127, 132, 168, 188, 192, 204, 236, 269, 275, 294, 312
difficulties in changing companies for, 136–37
economic pitfalls of, 229–33
emergence of, 68, 70, 71
federal loan program for, 139, 140–45
GIPSA reforms passed for, 302
inability to organize by, 37, 79, 84, 85, 244, 250, 256, 257
The Meat Racket: The Secret Takeover of America's Food Business Page 38