As Tyson Foods Inc. has tightened its grip on the poultry industry in Arkansas over the last four decades, the state has lost nearly half of its poultry farms, according to a new report by the Union of Concerned Scientists (UCS). The analysis shows how Tyson, headquartered in Arkansas, has come to dominate the state’s broiler chicken – chickens raised for their meat – processing industry, achieving concentrated market control and putting farmers, workers and communities at risk.
“Tyson’s hold on Arkansas is a perfect example of what can happen when a few corporate players are allowed to run rampant and consolidate their power,” said Rebecca Boehm, report author and economist at UCS. “Just four companies account for 87 percent of Arkansas’ poultry processing, with Tyson controlling just over two-thirds of the market. When these companies depress wages or lower grower contract prices there are few if any competitors that processing plant workers and chicken farmers can turn to, putting them at a significant disadvantage.”
“Tyson Spells Trouble for Arkansas” is the first analysis to use economic and demographic data to show Tyson’s outsized market power and highly concentrated control of the poultry processing industry in Arkansas, which leaves broiler chicken farmers with few options outside of highly consolidated and vertically integrated corporate processors. Ninety-four percent of broiler farmers in Arkansas operate through contracts with integrated corporate processors like Tyson, according to recent U.S. Department of Agriculture (USDA) data.
UCS’ analysis found that in 11 out of 14 Arkansas counties with integrated poultry processing operations, a single company controls the entire market for chicken. In seven of those counties that company is Tyson. Economists define a market in which a single company controls the buying of goods or labor as a monopsony. With unmatched local control of chicken processing and 67 percent of the state’s market, Tyson operates as a near-monopsony in Arkansas, according to UCS. Tyson’s largest competitor in the state, Ozark Mountain Poultry, operates a single plant and accounts for eight percent of the processed chicken market.
The rise of integrated corporate processors in Arkansas has coincided with the loss of nearly 50 percent of the state’s poultry farmers between 1978 and 2017, according to UCS, even as the total number of chickens raised in state has increased nearly 1,000 percent.
As Tyson Foods and other major corporations have grown and vertically integrated, they have come to control almost every part of the broiler chicken supply chain, contracting independent farmers to raise chicks they provide, with feed they source and under conditions they set. Broiler farmers have called the contract system unfair and exploitative, alleging that pricing practices by corporate integrators such as Tyson violate federal law under the Packers and Stockyards Act. Low grower prices and expensive investments mandated in processor contracts have driven farmers deeply into debt, resulting in bankruptcy or consolidation with larger farms.
“Tyson’s outsized power doesn’t just hurt farmers,” said Magaly Licolli, executive director of Venceremos, a worker-based nonprofit in Arkansas. “They’ve used their power and influence to endanger and exploit workers and their communities, denying workers a living wage, paid sick leave, and even adequate bathroom breaks. This new research from UCS reminds us we are all connected – whether you are a poultry farmer, a plant worker, or you live or work nearby, Tyson’s business model and their choices affect you.”
Arkansas has the most broiler contract farms and the most chicken slaughtering and processing plants of any state in the country. Many of these processing plants and chicken farms have clustered in several counties in Northwest Arkansas, near Tyson’s headquarters in Springdale. UCS’ analysis found that as chicken production increased and consolidated, so has chicken waste.
“When you concentrate large-scale animal production and processing, you concentrate the waste and the harm it can cause,” said Boehm. “A tremendous amount of waste is putting clean air, water and public health at increased risk in many communities in the state.”
Tyson chickens produced an estimated 49.6 billion pounds of waste in Arkansas in 2017, according to UCS’ analysis, much of it in counties with a large share of the state’s Latino and Native American populations, creating an environmental justice problem. According to a recent study, air pollution from dust and manure produced by U.S. broiler farming is responsible for 1,300 excess deaths annually, concentrated in communities where farms and processing plants are located.
The UCS report recommends strengthening antitrust laws and enforcement by the U.S. Department of Justice and the USDA, including by fully funding the USDA’s Grain Inspection, Packers and Stockyards Administration as an independent agency to ensure fair and competitive markets in the meat packing and processing industry.
In addition to stronger antitrust enforcement, UCS supports legislation aimed at leveling the playing field for small and medium-sized meat and poultry processors. The Strengthening Local Processing Act and the Agriculture Resilience Act would help expand alternative market opportunities for farmers and curb the negative effects of consolidation.