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(NPR)   A look at the system that pits farmer against farmer. WELCOME TO THE CHICKENDOME   (npr.org) divider line 10
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706 clicks; posted to Business » on 20 Feb 2014 at 9:32 AM (22 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-02-20 10:09:32 AM
i.chzbgr.com
 
2014-02-20 10:13:06 AM
Chicken farmers are a....unique sort of person. Spend 30 seconds on a chicken farm without a respirator, and you'll know why.

What I'm saying is, "Chickendome" may not be as far from reality as you might think.
 
2014-02-20 10:15:11 AM
That's typically how a market works. What is the story here?
 
2014-02-20 10:19:03 AM

SigmaAlgebra: That's typically how a market works. What is the story here?


actually it's not how it works normally. The chicken farm industry isn't mimicked elsewhere except in the pork industry. They have actually perfected a way to get farmers to keep their equipment up to date and try and stay on top of everything.

They truly have a unique business model
 
2014-02-20 10:35:49 AM

somedude210: SigmaAlgebra: That's typically how a market works. What is the story here?

actually it's not how it works normally. The chicken farm industry isn't mimicked elsewhere except in the pork industry. They have actually perfected a way to get farmers to keep their equipment up to date and try and stay on top of everything.

They truly have a unique business model


The point I was making is that in a market, producers (in this case chicken farmers) are supposed to compete against each other, and there will be winners and losers. If they were all co-operating, that would be a cartel.
 
2014-02-20 11:19:14 AM
I now know I should feel sorry for the farmers that entered into these contracts expecting to be paid in the top percentile while in reality the mean corps screw them over by paying them in the bottom percentile when they do not produce up to snuff..... and for god sake the corps snowjobed them by not mentioning the cost of maintaince, evil I tells ya, evil.
 
2014-02-20 11:19:37 AM

SigmaAlgebra: somedude210: SigmaAlgebra: That's typically how a market works. What is the story here?

actually it's not how it works normally. The chicken farm industry isn't mimicked elsewhere except in the pork industry. They have actually perfected a way to get farmers to keep their equipment up to date and try and stay on top of everything.

They truly have a unique business model

The point I was making is that in a market, producers (in this case chicken farmers) are supposed to compete against each other, and there will be winners and losers. If they were all co-operating, that would be a cartel.


Wait, you think that the chicken industry ISN'T basically a cartel? Sure, the farmers at the bottom may compete with each other, but at the top of the pile there isn't a lot of competition. Just 4 companies control around 60% of the entire market.

As far as the farmers' complaints, these stories are always just vague enough to make it hard to decide which side to be on. On the one hand, the formula sounds like a fairly sound theory. The farmer who makes the most efficient use of the feed gets the most profit. That's how it would work if the farmers owned the chickens and supplied the feed - the guy who uses less feed to get the same gain is going to make a better profit. It also removes a lot of the risk for the farmer. If feed prices spike or chicken prices crash, the farmer is still guaranteed a set amount per chicken, and the company has to eat the loss.

On the other hand, we really have no idea what the formula that is used to determine the amount paid really looks like, so it's hard to know if it is fair or not. I certainly wouldn't put it past Tyson to screw over producers without a moment's hesitation. Clearly some of these people are making good money, or nobody would be doing it. It's easy to write off the complainers as the losers of the game who thought that they would sign up for some easy money and then got out-performed by other players. That's the thing about these stories. You get a few snapshots, some anecdotes, but the big picture never really comes into full focus.
 
2014-02-20 11:56:14 AM

mod3072: On the other hand, we really have no idea what the formula that is used to determine the amount paid really looks like, so it's hard to know if it is fair or not. I certainly wouldn't put it past Tyson to screw over producers without a moment's hesitation. Clearly some of these people are making good money, or nobody would be doing it. It's easy to write off the complainers as the losers of the game who thought that they would sign up for some easy money and then got out-performed by other players. That's the thing about these stories. You get a few snapshots, some anecdotes, but the big picture never really comes into full focus.


That's really the only issue here.  What is their criteria?  What is the formula?

Then again, why would you get in business doing something if you didn't know what the product of your labor is worth?  Don't like the system, do something else...then the "chicken cartel" will face a shortage and with that, escalating costs.
 
2014-02-20 12:13:46 PM

mod3072: but at the top of the pile there isn't a lot of competition. Just 4 companies control around 60% of the entire market.


During the big hayday of the CPU chip wars, how many companies controlled the market? Intel and AMD, and the consumer benefited greatly

slayer199: That's really the only issue here.  What is their criteria?  What is the formula?


I'm sure it's part of the contract somewhere.  It can't be made up as they go.

The most important part of this story is: , the Obama administration proposed new rules to address them. The rules were supposed to give contract farmers more predictable minimum pay,

Umm why? It's two businesses dealing with one another, why does the Obama administration need to get involved?

If the farmers don't want to deal with the formula, perhaps they should process and sell their own chickens.
 
2014-02-20 12:36:51 PM

mod3072: That's the thing about these stories. You get a few snapshots, some anecdotes, but the big picture never really comes into full focus.


there was also the notable statement in the article that the chicken council would likely retaliate against anyone who rocked the boat.  for which reason, most chicken farmers refused to participate in that survey, and I would bet, many chicken farmers refused to speak to this reporter.  and those that did, likely couched their true feelings.
 
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