Tyson’s stock price is way up, elevating John Tyson to billionaire status as a result. But many of the farmers raising the chickens and livestock used by the company and others in the industry continue to struggle.
John Tyson, the Chairman, former CEO, and largest stockholder of Tyson Foods (and the grandson of the company's founder) is the latest member to join the elite billionaires club. According to Forbes, a recent 27% spike in Tyson's stock price has vaulted him, at least on paper, into the magazine's billionaire bracket.
Over the last 52-weeks, Tyson's stock price has climbed precipitously, from $24.60 per share to its current price of around $40.28, an increase certain to make the company's investors happy if not also billionaires.
But while executives and stockholders are profiting from Tyson's financial performance, the farmers raising the flocks, hogs, and cattle that eventually come through the company's processing plants are not — in fact, they are seeing an increasingly smaller share of every consumer dollar spent with them. That's largely owed to the industry's vertical integration, the ownership of all the stages of production that would normally be separated amongst several companies, and a payment system that forces competition between farmers. As a result, growers have been watching their income drop, sometimes below the cost of their operations, even as the companies who sell their meat watch their profit margins rise.
"Average household income [for chicken farmers] … compares favorably to nationwide averages," a 2008 USDA study reports. However, that study, also notes that, "Net income varies widely among broiler operations, where a quarter of farms experience losses."
Farmers in the pork and beef industries are also seeing falling incomes. According to the USDA, hog farmers in 1980 earned about 50 cents for every consumer dollar spent on pork. By 2009, however, that figure fell to 24.5 cents per dollar. Similarly, cattle producers in 1980 received 62 cents of every beef dollar consumers spent, but by 2009 that number had dropped to 43 cents.
While the USDA has tracked changes in farmers' share of the consumer dollar for hogs and cattle, similar data does not exist for chicken growers because nearly all chicken farming is done under confidential contracts, whether with Tyson or one of the other three major processors. "Chicken farming is a complete black box because the business is so tightly integrated," Chris Leonard, author of The Meat Racket , an exposé of America's meat industry, tells BuzzFeed.
Both Tyson and the American Meat Institute attribute the declining earnings for cattle and hog farmers both to packers and processors adding more value to beef and pork and a changing consumer preference for ready to eat food over unprocessed products.
The National Chicken Council also explains that an average chicken farm, raising about 90,000 birds at a time, allows time for farmers to have other sources of income because it "requires less than 20 hours of work/management time per week" and even less from the "primary wage-earner" if "family members are available to support the work."
Tyson spokesperson Gary Mickelson had a similar explanation, telling BuzzFeed, "We don't track the net incomes of the independent farmers who raise chickens for us, but do know that most of them have diversified farms or also have off-farm jobs, giving them more than one source of income."
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