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Wed Feb 14, 2018, 01:13 PM

The Price-Fixing Scandal Rocking Big Chicken


The Price-Fixing Scandal Rocking Big Chicken

Multiple lawsuits allege that top poultry companies colluded to make broilers more expensive.


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The biggest poultry processors in the United States face widespread allegations that they colluded to raise prices over the course of 10 years in the $30 billion broiler chicken market. In just three weeks, two grocery retailers and the country’s two biggest food distribution companies filed lawsuits against Tyson Foods, Perdue Farms, Pilgrim’s Pride, Koch Foods, Sanderson Farms, and others. The complaints all allege that since 2008, many top poultry companies have engaged in a price-fixing conspiracy, assisted by information-sharing software. Consequently, suppliers and retailers argue that they paid too much for chicken—a burden that has likely been felt by consumers, too.

The broiler chicken market comprises virtually all chicken consumed in the United States. Historically, broiler chicken was priced on a boom-and-bust cycle — when prices for chicken went up, so did supply; then prices would fall. Craig Watts, a former Perdue farmer, said in an interview that “prior to 2008, the chart [of broiler prices] was like an EKG.” But then, as Watts puts it, “it’s been boom for the past 10 years or so.” Plaintiffs in these lawsuits allege that starting in 2008, prices for chicken suddenly stabilized and began to rise, even as the inputs those companies sold to farmers fell. They allege that this stabilization was a result of collusion among the companies, made possible in part by a piece of database software called Agri Stats.


Through Agri Stats, poultry companies can share information about production numbers, bird sizes, financial returns, and more. The database company gathers information from 95 percent of poultry processors and tracks 22 million birds a day. Companies can then use this information, according to farmers, retailers, and distributors, to set a higher price for their products. In a 2017 report on Agri Stats, Bloomberg found that between 2009 and 2016, Tyson’s operating margins grew from 1.6 percent to 11.9 percent. At Pilgrim’s Pride, between 2012 and 2015, operating margins grew from 3.8 percent to 12.77 percent.

The first lawsuit brought against the processors was a class action filed by a food wholesaler, Maplevale Farms, in September 2016. That suit alleged that from 2008 onward, Tyson and Pilgrim’s Pride coordinated their efforts to reduce their broiler stock and forced a “nearly 50 percent increase in Broiler wholesale prices since 2008, despite input costs (primarily corn and soybeans) falling roughly 20 percent to 23 percent over the same time period.” Maplevale claimed that consequently, it paid inflated prices for chicken over the course of several years. Following that class action, other supply chain actors began to take their stand against the processors. Several farmers filed a class action lawsuit against Tyson, Pilgrim’s Pride, Perdue, Koch, Sanderson, and others in January 2017, alleging that the processors had acted as a cartel and used information from Agri Stats to keep farmers’ wages down. In April 2017, Chicken Kitchen, a restaurant franchiser, brought a similar lawsuit against Tyson Foods, alleging that the company had “conspired to fix, maintain, and stabilize the price of Broilers by limiting production with the intent of increasing Broiler prices in the United States.” On January 12, the Southern supermarket chains Winn-Dixie and Bi-Lo filed suit against Koch Foods, Tyson, Pilgrim’s Pride, and others alleging that the processors had restricted supply in order to keep prices high. US Foods and Sysco followed with their separate lawsuits on January 30.

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https://www.motherjones.com/food/2018/02/chicken-poultry-price-broilers-tyson-perdue-lawsuits/

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Reply The Price-Fixing Scandal Rocking Big Chicken (Original post)
niyad Wednesday OP
NightWatcher Wednesday #1
niyad Wednesday #2
DAMANgoldberg Wednesday #4
niyad Wednesday #5
TexasBushwhacker Wednesday #3
GusBob Wednesday #6
GusBob Wednesday #7
niyad Wednesday #8
GusBob Wednesday #9
hedda_foil Wednesday #10

Response to niyad (Original post)

Wed Feb 14, 2018, 01:15 PM

1. I thought you were talking about this Big Chicken 🐓

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Response to NightWatcher (Reply #1)

Wed Feb 14, 2018, 01:19 PM

2. are those real, or photoshopped?

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Response to niyad (Reply #2)

Wed Feb 14, 2018, 01:55 PM

4. The Big Chicken is a landmark in Marietta GA

I remember it as a kid growing up 2 hours west of there in NE AL. With urbanization (next county over from Atlanta) surprised it's still there.

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Response to DAMANgoldberg (Reply #4)

Wed Feb 14, 2018, 01:59 PM

5. that is really amazing!

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Response to niyad (Original post)

Wed Feb 14, 2018, 01:20 PM

3. Well, I can buy chicken for $2 or less a pound

Considering a chicken had to hatch, be raised to adulthood, slaughtered and packaged, I don't see how they could charge less. Even at double the price, it's still damn cheap.

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Response to TexasBushwhacker (Reply #3)

Wed Feb 14, 2018, 02:05 PM

6. Whole birds .99/lb here

They have been trying to give it away here

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Response to niyad (Original post)

Wed Feb 14, 2018, 02:15 PM

7. Did they also conspire to come up with new recipes for chicken thighs?

' cuz there is new ones one my FB feed everyday ( my FB feed is mostly food)

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Response to GusBob (Reply #7)

Wed Feb 14, 2018, 02:19 PM

8. don't know about that. I have lots of recipes for chicken thighs.

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Response to niyad (Reply #8)

Wed Feb 14, 2018, 02:27 PM

9. 10-12 years ago one of the companies had a contest

IIRC, chicken thighs were not selling well. Chicken wings did not sell at all before someone came up with the Buffalo recipe. So the company held a contest for thighs. I think that is why we see so many recipes now

I have many too since chicken is so cheap we eat a lot

I also notice at times is it easier to find chicken thighs packaged rather than the more traditional chicken quarters ( legs and thighs).

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Response to niyad (Original post)

Wed Feb 14, 2018, 03:11 PM

10. Koch chickens? nt.

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