From Claire Kelloway <[email protected]>
Subject Food & Power - Talking Turkey
Date November 24, 2021 5:42 PM
  Links have been removed from this email. Learn more in the FAQ.
  Links have been removed from this email. Learn more in the FAQ.
Did someone forward you this newsletter?

Get your own copy by subscribing here [[link removed]], and to share this story click here. [[link removed]]

Photo courtesy of iStock

Talking Turkey: An Anti-Monopoly Thanksgiving

Turkey is generally the biggest expense on the Thanksgiving table. While last year’s turkeys reached their lowest price since 2010 [[link removed]], according to American Farm Bureau Federation estimates, bird costs are up this year by 24% [[link removed]]. There are many factors driving up prices, including higher transport costs [[link removed]], supply chain [[link removed]] disruptions, and high turkey feed prices driven by drought [[link removed]]. Because of rising production costs, turkey producers do not expect [[link removed]] to see much benefit from this year’s higher prices.

While this may be consumers’ first turkey price spike in a decade, a class action lawsuit [[link removed]] brought by wholesale turkey buyers argues that there has been trouble in turkey production long before the pandemic. Food wholesalers have alleged [[link removed]] that nine turkey processors representing approximately 80% of the market conspired to cut production and raise wholesale prices since at least 2010. Their claims mirror similar price-fixing scandals [[link removed]] in the chicken and pork [[link removed]] industry and hinge on a data-sharing service, AgriStats [[link removed]], that meat corporations allegedly used to monitor each other’s production and catch potential deviants from the conspiracy. Industry consolidation can make price-fixing easier. The three largest turkey corporations, Cargill, Hormel, and Butterball, control roughly half [[link removed]] of the turkey market.

The case argued that before 2009, turkey production generally tracked with changes in wholesale turkey prices and feed costs, but starting around 2010 turkey production fell and prices “spiked to an unprecedented level,” the complaint said [[link removed]]. From 2000 to 2009, the average wholesale price for a turkey hen ranged between $0.55 and $0.85 per pound, according to USDA data. Starting around 2010, the price steadily rose every year reaching $1.15 per pound in 2016, a 35% increase from 2009. Turkey production was also below the 2000-2008 average each year between 2009 and 2018. This discrepancy between elevated wholesale prices and decreased turkey production continued until 2016 — coincidentally when the first AgriStats price-fixing case was filed against chicken processors. “Defendants clearly changed their behavior after the commencement of the Broilers litigation,” the plaintiffs allege.

Thanksgiving turkey prices didn’t track [[link removed]] with these wholesale price increases, in part, because retailers willingly [[link removed]] lose money on Thanksgiving turkeys [[link removed]] to bring in customers to do the rest of their holiday shopping ( Amazon’s $1 a pound turkey deal [[link removed]], anyone?).

A judge permitted this turkey price-fixing case to go forward in October 2020, and at least one turkey processor, Tyson Foods, has since paid $4.6 million [[link removed]] to settle the allegations. It remains to be seen if more processors follow their lead. Given these allegations, and similar charges made against chicken processors, Sen. Elizabeth Warren requested that the Justice Department “open a broad investigation into the impact of price-fixing, wage fixing, and consolidation in the poultry industry” in a letter sent [[link removed]] Tuesday.

Find and share this story originally published on [[link removed]] Food & Power [[link removed]] . [[link removed]]

Additional Thanksgiving-Related Reading

In addition to price-fixing charges, turkey processors face a legal challenge for allegedly misleading consumers. Earlier this year a group of farmer, worker, and environmental advocates [[link removed]] alleged that Cargill misled consumers by claiming that their turkeys were raised by “independent family farmers.” Cargill sources their turkeys from contract growers who have little meaningful independence, the suit alleges. This case follows a recent rise [[link removed]] in lawsuits charging food companies with inaccurate or misleading labeling. (The New York Times)

A report by Food & Water Watch [[link removed]] published last week assessed market concentration in 55 grocery categories and found that “tight oligopolies/monopolies” controlled more than 60% of these product segments. Some standout findings: The top four companies in each industry sold 74% of all yogurt, 80% of all baby food, and 92% of all soda. A handful of firms such as Kraft-Heinz and General Mills commanded leading positions in multiple categories. (Food & Water Watch)

A review of corporate earnings calls [[link removed]] by More Perfect Union [[link removed]] suggests that large food corporations, among others, may be taking advantage of inflation expectations to raise prices and boost profits. Nearly 100 of the largest publicly traded U.S. corporations reported profits for 2021 that were 50% above profit margins from 2019.

(The New Republic)

About the Open Markets Institute

The Open Markets Institute promotes political, industrial, economic, and environmental resilience. We do so by documenting and clarifying the dangers of extreme consolidation, and by fostering discussions of ways to reestablish America’s political economy on a more stable and fair foundation.

Follow F&P on Twitter [[link removed]] | Subscribe [[link removed]] to this Newsletter | F&P Website [[link removed]] | Contact Us [[link removed]]

Tweet [link removed] Share [[link removed]] Forward [link removed]

Written by Claire Kelloway

Edited by Phil Longman and LaRonda Peterson

Open Markets Institute

655 15th St NW Suite 800

Washington D.C., xxxxxx

Unsubscribe [link removed]
Screenshot of the email generated on import

Message Analysis