U.S. chicken prices may have been artificially inflated for years | Hacker News Reader

U.S. chicken prices may have been artificially inflated for years

washingtonpost.com

240 pointsendswapper151 comments

“We trust the companies we work with,” Alec Asbridge, director of regulatory compliance at Georgia Department of Agriculture, said earlier this month. “We don’t see any reason they would submit information that wasn’t truthful.”

I feel like this statement makes Asbridge unsuited for his job as director of regulatory compliance. Willful obliviousness implies a conflict of interest.

He must think everyone else is an idiot when he talks like this.

If it isn't willful obliviousness, at the very least, it is blatant incompetence.

I don't think you have to call it willful. By his own hand he wrote:

> “My training was inadequate, inconsistent and sometimes in error,” Schronce wrote of his preparation for calculating the Georgia Dock.

That quote is not from the same person.

Mr. Asbridge, have you ever heard of money? If not, do you know what the numbers on your paycheck mean?

Uh, this makes no sesne to me. He's speaking specifically about the numbers reported for the Georgia Dock, which, from the reporting in this article, could very easily be completely legitimate. You seem to be interpreting his statement as applying to everything under his job description as director of regulatory compliance.

I did not read his statement as a blanket statement; it hadn't occurred to me that anyone would until I saw your comment. As a matter of fact, the 2nd sentence seems to explicitly preclude that interpretation.

> I did not read his statement as a blanket statement; it hadn't occurred to me that anyone would until I saw your comment.

You haven't been on the internet much have you?

Get out before it sucks all the optimism out of you and replaces it with cynicism.

I feel it's a non-reversible process.

>Get out before it sucks all the optimism out of you and replaces it with cynicism.

So, get out before you actually get informed about how the world runs?

Does it make you feel any better though? Do you prefer to be continuously disappointed over things you have no control on?

Others don't give a damn, and they're happier because of it.

Bad things will happen to you personally eventually (assuming they haven't yet). I have enough of that to deal with already, why would I want more?

>Does it make you feel any better though? Do you prefer to be continuously disappointed over things you have no control on?

Who said we have no control on the world? Do you think one has to be The President or some mogul to have a say in the world? Was Rosa Parks anybody important when she did what she did?

And even if it's not about changing the world, being aware of the pitfalls instead of blindly optimistic can let people avoid lots of dangers of the "it can't happen here" or "it can't happen to me" type...

> Was Rosa Parks anybody important when she did what she did?

These are social issues. There are no monetary interests at work.

In the (very, very) long run nobody really cares who you marry.

These are just the little things given to us to fight over so we don't notice what's really going on (i.e 3 wars, but still no healthcare? Come on.)

>These are social issues. There are no monetary interests at work.

From slavery and Jim Crow laws, to seggregation and redlining, there were tons of monetary interests at keeping the blacks down.

It sounds like they're only talking to chicken producers, and the producers have a pretty obvious incentive to lie to regulators if it increases the price they get for chicken.

An easy fix would be to contact retailers like Walmart or Kroger to see what they're paying for chicken. Hopefully the liars would offset and end up closer to the truth.

Exactly. This is an excellent idea.

The article notes one of the reasons this is a big deal is that major retailers use the measure, at least in part, to set their buy contracts.

The entire article provides reasons why the companies are incentivized to inflate the prices, because those prices are used in contracts which affect them. Asbridge is either not aware of this aspect of the incentives in his industry, which would imply incompetence (whether this is a minor incompetence or a gross incompetence, I don't have the knowledge to say), or he's not speaking carefully. He might actually think that the companies don't have a GOOD reason to provide false figures, but not that they don't have ANY reason. If he's not speaking carefully, then he may be specifically minimizing concerns about the figures to the benefit of the industry he's regulating.

Since he's a political actor, and we know that regulatory capture exists, this could call into question whether it's appropriate for him to continue being a regulator. That's the argument.

To give him the benefit of the doubt (not saying it's warranted), Georgia government interactions do seem to have a tendency towards "yelled at and fixed in a back room, face saving comments at the press conference."

See the history of our JQB (before voters questionably decided to give control to the legislature this election).

> before voters questionably decided to give control to the legislature this election

I think you mean:

Before the legislatures questionably took control after putting favorable wording on a ballot that the average uninformed voter read as a no brainer.

I feel like <20% of ballot measures are clearly worded, so that wasn't any surprise to me.

More fun was that State Rep. Johnnie Caldwell of Griffin, GA (formerly Judge Caldwell before being approached by the JQB and resigning due to allegations of sexually harassing a female attorney) was one of the co-sponsors of the amendment.

  We don’t see any reason they would submit information that wasn’t truthful

This statement seems excessively naive for a Director of Regulatory Compliance.

It's one thing to suggest that in general, the companies are believed to be honest. That's a fairly reasonable statement.

It's another thing to be blind to the benefits of giving untruthful information. If all companies were honest and compliant, there would be no need for a Director of Regulatory Compliance.

Some people think that there is no need and they take political and regulatory positions specifically to undermine regulations. Something to think about when someone in a position to impact regulatory effectiveness does something that seems incomprehensible.

But it's not always the case, sometimes people are just thick or we lack a complete picture.

Didn't you know jobs are more important than regulations?

Even like a, "Trust but verify" attitude here would be more appropriate.

Like, sure, I get it, it's easier to work with companies if you demonstrate a trusting relationship, but you're in an adversarial position by the nature of your job, the companies should feel a little uncomfortable around you.

Google strawman, that may apply to you.

Next time, the right bureaucrat will be in charge!

This is classic red state governance.

Strip the organization of resources over time, put politically appointed people in charge of work that should be performed by civil servants, and create a situation where the inmates run the asylum.

Even if nobody applies pressure, there's an implied threat of reprisal when the an appointed former garden blogger turned director of whatever gives an undesired answer. That job should be a civil service gig protected from direct reprisal.

Compare this ridiculous methodology compared to something more robust like the CPI calculations performed by the US DOL.

Yeah, Georgia, what a shit hole. With its triple-AAA bond rating, below-average debt per capita, and solvent pension system!

And apparently, inflated chicken prices.

You forgot the inadequate transportation system and underfunded schools.

I'm sure those chicken companies appreciate the tax break though.

> transportation system

I assume that you're talking about Atlanta.

The Marta? Nope. Not even close. It's great if you want to go downtown, but not much else. Also it closes before the bars do.

Don't even get me started about the highways there.

Georgia's school performance is about median, in line with blue states like Connecticut, Washington, New York, and way ahead of California or Michigan: http://www.urban.org/urban-wire/how-do-states-really-stack-2....

This is classic governance in general, not just red state governance.

From 1872 to 2002 Georgia elected 37 Democrat Governors in a row. The Georgia dock chicken pricing goes back at least 56 years. So you might as well call it classic blue state governance.

Interesting theory. Besides the correlation, do you have any additional data to support it?

I think his point was that the previous poster should not have been so quick to call it out as a partisan issue, not placing blame on Democratic governance.

Point taken. I appreciate you being civil about it.

Good info, but the article isn't referring to events that took place between 1872-2002. If you look at the details of the article these anomalies in pricing began in the 2007 timeframe, and the attached chart starts in 2005.

That timeframe coincides with a wave of privatization within the state, including the divestment of IT from state governance to an outsourcing deal and broad tax cuts that devastated local government and education.

I'm not engaging in knee-jerk partisanship. The playbook for modern republican governance calls for contracting services out, diminishing the role of civil servants, and making tax reduction a cornerstone policy position. When you replace civil servants with political appointees of any party, this sort of thing happens. It just so happens that republicans are the offenders in this story.

You are blaming red state governance for a program that dates back to at least 1966, 36 years before Georgia broke a 130 years streak of consecutive Democrat governors. The article doesn't say that the program has changed, but that poultry companies started supplying bad data. You are jumping to the conclusion that this was affected by outsourcing, tax cuts, or replacing civil servants with political appointees, none of which is stated in the article.

The article doesn't claim the problem went back to '66, but rather says it's a more recent problem in a previously successful program. Are you saying the problem goes back further than the article claims, or was this just a misunderstanding on your part?

That ignores the fact that until 2010 the Ga Ag Commissioner (An elected position that is the head of the Department of AG) was a democrat.

"This is classic red state governance."

Not everything in this world requires knee-jerk political name calling.

As I read the article, the influence the industry has over prices is definitely a big problem, as are some of the statements of those in government defending the accuracy of the prices and basically covering themselves. The government officials sound like sadly typical "everything's fine, we're looking into it" language.

Not knowing the broader GA situation, can you shed light on "strip the organization of resources over time"? I don't see that in the article. It does sound like he could have used more support, but that can be the case in many jobs, in industry or government.

From what I see, Schronce has been a civil servant since October 1996.

PDF: http://atlantacityga.iqm2.com/Citizens/FileOpen.aspx?Type=4&...

Oct 1996 - August 2014 Director of Public Affairs, GA Dept of Agriculture

August 2014 - Marketing Representative for Municipal Market Board for City of Atlanta

I wasn't able to fill in the gap between working for the Municipal Market Board and returning to the Dept of Agriculture.

His blog was part of the Dept of Agriculture website. Describing the situation as "former garden blogger turned director of whatever" is an unfair characterization of the situation. I don't see in the article whether the Director of Public Affairs is an appointed position or not, nor could I find information about that online. He has a background in agriculture, a horticulture graduate of North Carolina State University. If it was an appointment, it doesn't appear to be purely political.

http://agr.georgia.gov/artys-garden.aspx

I also don't see an indication from the article that he was worried about reprisal. I agree it's important to shield regulators to let them do their jobs as free of influence as possible.

He did write a memo, raising the issue. With the light that's now been cast on the situation, hopefully it'll get fixed. No system is perfect. What makes a difference is whether it gets fixed now that the issue is known.

The particulars of the Georgia Dock aside, how does this compare with other states, red, blue, or purple?

He's hiding behind a negative proof.

And this is precisely why chickens should be traded on an exchange. It becomes much harder for a person or small group (as in this case) to corner a market and raise prices.

However, here's a good article about why there is no trading in chickens: https://www.washingtonpost.com/news/wonk/wp/2014/01/10/the-c...

Looks like the market has been generally fairly stable and dominated by big players, so there hasn't been a need for producers and consumers to hedge their prices, and therefore a futures market was never formed.

Tyson again. That name bubbles up to the top of the septic tank every few years. Tyson was one of several companies that paid millions to settle antitrust price fixing suits in the late 70's. Bill Clinton suppressed a water pollution problem for them when he was governor. One of Tyson's lawyers was the shepherd for Hillary's amazing cattle future windfall.

Our own fault really. We make reams of regulations with no accommodation for small competitors so being "To Big To Fail" becomes a requirement of doing business. Not surprisingly the resulting oligopoly quietly colludes amongst itself.

So funny. The current right wing enthusiasts don't even mention the cattle futures thing, which is the only outright crooked thing you can really hang off Hillary Clinton. It's all Benghazi all the time these days but to me the Clintons have so much of the small-time corruption in their history.

In fact, U.S. chickens themselves have been artificially inflated for years. Yum.

http://www.foxnews.com/story/2009/06/10/artificially-fattene...

You had to quote fox news for that didn't you?! You just had to...

If anything, I'd say a report from Fox News about a business doing something questionable is more reliable.

Well, it's certainly putting the fox in amongst the chickens...

I also find it interesting how much of a premium white meat commands at the grocery store. $10 might get me 1 lb (450 g) boneless chicken breast, or 3 lb (1400 g) boneless chicken thigh. Since one chicken produces slightly less thigh meat than breast meat, I can only assume that there is a huge disparity in demand.

I'm not complaining—I get the meat I prefer for a good price that way.

(Edit: To be clear, U.S.)

(Edit 2: I think I misremembered the prices: might have been 3 lb / 9 lb instead of 1 lb / 3 lb.)

Breasts go below $3 here. Boneless thighs below $2.

That's at Walmart, but that's where an awful lot of Americans are buying some of their chicken.

The inverse is true in Vietnam (not sure about elsewhere in SE Asia), where they consider the breasts to be the most undesirable part of the chicken.

It's a health thing. People have been taught that the dark meat is full of fat and the light meat is healthier.

It's kind of like choosing a Coke instead of a Mountain Dew for health reasons.

Except a moderate amount of protein and fat is good for you while highly processed sugar with little to no other nutrients in the mix is not.

I think the point of the parent comment is that choosing to eat white meat instead of dark meat for health reasons is nonsensical.

I'm not sure that's true - in the UK at least. Brits just seem to have a general aversion to anything other than breast meat as the other parts are considered "yucky" etc

My Korean friend had the same attitude (and claimed it was common in Korea). After several "correctly" cooked chicken breasts he changed his attitude.

Breast meat takes far less heat/time to cook than the rest of the chicken (comparatively) making it very easy to over cook. Rubbery chicken breast is much less appetizing than chicken thighs (etc).

Also beast meat in stew/soup is difficult (impossible?) to do right (so so easy to end up rubbery). But thighs in a stew are perfectly fine (can't really overcook).

I think it's really hard to get chicken breast wrong when you brine it. Brining is really the key to tastiness. Saltiness = Tastiness

Not necessarily saltiness, I usually marinate chicken breast in a mix of olive oil, lemon juice and various herbs. The taste is so much better than the "plain" one.

Even fresh whole squids are only $5-6 a pound. I'm guessing 95% of U.S. food consumption patterns are determined by people being too lazy or dumb to spend thirty seconds googling for how to prepare basic food items.

$10/lb for chicken breast is really high. I can get unpacked chicken breast for ~2 dollars a pound or the packaged Perdue breasts for 6.

In Berkeley I was getting squid for like $2/lb. It was great.

That's simple supply and demand. American customers prefer white meat because it's lower in calories, and therefore viewed as healthier. It's also considered better for people on a low cholesterol diet. Outside the US, a higher premium is placed on taste, and so dark meat is preferred.

This does vary somewhat - when chicken thighs became a more trendy ingredient a few years ago prices for chicken thighs rose pretty dramatically. I mostly noticed because I was semi-regularly making a very simple slow-cooker chicken chili that used boneless skinless chicken thighs.

Also, where in the US are you paying $10/pound for chicken breast? In the Chicago area even "boutique" organic boneless/skinless chicken breast is seldom above $6/pound, regular full-price conventional chicken breast is typically $3-4 depending on where you shop, and B/S breast is often on sale for at or below $2/pound (rarely below $1.49/pound).

Perhaps OP was referring to the pre-cooked chicken available at the deli counter? That's typically a lot more expensive than buying it raw.

$10/lb seems insane to me. I routinely pay $2/lb for mine at Costco ($20 for a 10lb bag of frozen boneless/skinless chicken breast).

Even at Whole Foods the air cooled chick breast are rarely over 6.99 a pound and it seems like the norm for "boutique" chicken.

I think I got bone in breasts for around $3.79 a pound at publix this week.

I'm in upstate ny.

Small packages of chicken breast are typically $7/lb. Large packages at a wholesale club are $3/lb for Perdue, $2/lb for the mystery brand. Whole Foods is much higher.

We have a supermarket oligopoly that keeps prices high, I noticed supermarket prices in a few NYC stores were in line with warehouse clubs at home.

Oregon checking in.

Usually prices are:

(boneless/skinless) breast - $1.99/lb

(boneless/skinless) thighs - $2.29/lb

On sale, they are sub $2 a pound, like $1.69. This is at Fred Meyers, quality chicken - that I can tell you.

Who in the hell would pay ten bucks for a pound of chicken, I'd switch to salmon fulltime at that rate.

Lobster prices are considered high when they wholesale for $10 a pound.

http://www.cnbc.com/2015/07/17/lobster-prices-are-getting-wi...

Santa Barbara - $4.99-11.99/lb for chicken breast. I imagine real estate has a lot to do with pricing.

I was going to post that the price of dark meat is actually inflated because we export it to Russia and other countries, it could be even cheaper! But then I saw this article: http://www.slate.com/articles/life/food/2011/01/the_dark_sid... which says that Russia is not importing as much of our chicken. Good! I prefer dark meat and I want it to be as cheap as possible for me in the US.

$11.99/lb at Harris Teeter for my locality. Thighs are $7.99.

http://grocery.harristeeter.com/pd/Smart-Chicken/Organic-Bon...

Those are some overpriced organic ones, though. While a valid choice, they're not representative of the norm.

That grocer has regular breasts at $3.99/lb:

http://grocery.harristeeter.com/pd/Harris-Teeter/Chicken-Bre...

or thighs at $3.49.

I too get the meat I prefer ever since I found this recipe,

https://www.buzzfeed.com/emilyhorng/travel-to-new-york-city-...

I never realized how much more flavour your able to get out of chicken thighs. I highly recommend it!

There is a huge disparity in demand due to the perceived health benefits (which I think are essentially illusory). They used to ship unwanted dark meat to Russia but now they've gotten a taste for white meat as well.

It's not uncommon to see thighs on sale for prices as low as $.79/pound, in my experience. There is more waste, with the skin, gristle and bone, compared to boneless breasts, but still.

The one that gets me is that you can often get boneless pork chops or loins for around $2/pound. Even the cheaper chuck cuts of beef that I like are usually double or triple the cost of pork.

Maybe klodolph is talking about fresh while some others are reporting on frozen.

Here where I am, Ordinary chicken breast is $6-8 /lb. Organic breasts: $8-10 /lb. Frozen breasts can be $2.50-4 /lb.

I prefer to get misery-free local chickens whole for $4.50 /lb. Then I can make stock. Yum!

I was talking about fresh.

The prices I mentioned are the typical prices for larger packages, not a special or whatever.

Price of 'commodity chicken' is largely set internationally, as has fascinating disparities, especially due to cross-pacific preferences.

An example is chicken feet. Around 300,000 tons of chicken feet are exported from the US mainly China, as a lot of Chinese cuisine has ways to cook these into something tasty. Think about how little chicken feet weigh, and how many make up a ton. That's a lot of feet. Necks too.

The contrast in prices for chicken breast and chicken wings seems most stark. Chicken wings are popular all over the world, but breast mainly in the Anglo world (US, US, AU, CA, NZ) and some of Europe. China doesn't have much frontness for breast. Here, chicken wings retail for 4 times the price of breast (wings about USD6 per kilo and breast USD1.5 per kilo) despite breasts being bone/skin free - commodity, non-brand chicken, a price disparity that is surely a function of cost of arbitrage (shipping and refrigeration). These are retail prices, largely frozen or pre-frozen.

I prefer a free range bird, chicken, duck, pheasant, from the farmyard. As in friend's parent's farm in the countryside. These go at a huge premium to factory stuff, but are also much longer lived and much tastier. Around USD 15-20 per bird depending on size and type.

Edit: Article on chicken and ratio of wing to breast prices http://freakonomics.com/2011/12/09/the-economics-of-chicken-...

> ...a lot of Chinese cuisine has ways to cook these into something tasty.

Not exactly. They just like chicken feet. Cultural palate. You can go to a dim sum place (if you have one available in your US town) and get dim sum. If you don't like them already, pretty good chance you won't like them off the cart.

> Not exactly. They just like chicken feet. Cultural palate.

ish.

Depends. Also true of tripe (dim sum example, usually also black bean and/or chili). Trust the taste buds. A good restaurant shouldn't serve something that's not good. So take anything off the cart, or menu. If it doesn't taste good, the restaurant isn't doing something right.

Disclaimer: I eat anything that is cooked with love and/or care, and other stuff too.

Another LIBOR-style scandal. This asking for an unverifiable number from people with an interest in that number being high is an ideal vehicle for collusion. If yesterday's average turned out to be higher than the number you reported yesterday, just up your number to the average. If you feel the market can bear a price rise, just up your number well above the average for a time and see if everyone follows, then lower your number the closer the average gets to your ideal number. The only risk you take is that to push the average up enough that others adjust, you take the risk of reporting a price high enough to attract attention - but if companies trade off on leading the charge, it just looks like a high variance. Each supplier has a different set of contract relationships, so any short-term variance could be rationalized.

In the end, it works out like a perfect continuous democratic system for price-fixing.

LIBOR-style indeed.

What's wrong with market based prices?

The other issue with LIBOR is that it fails to take into account the volume that a supplier can move. Taking the average/median of a number of suppliers that are willing to sell one chicken doesn't say much.

> What's wrong with market based prices?

Both LIBOR and this chicken price are _supposed_ to be market-based; however the price negotiations are all confidential. An alternative is to mandate total visibility of all bids and offers, as is generally done in equity markets. This brings its own distortions: you have to pay people to operate the public venue; it enforces a bid-offer spread. And many people don't like regulations forcing them to do business a certain way.

Isn't American chickens treated horribly and living in awful conditions to drive the price down? If the price is inflated there should be economic room for better conditions instead.

It drives cost down.

price − cost = profit

Right. I'm willing to PAY for better conditions for chicken. Who's with me?!

Should be, but then shareholders wouldn't get as fat of a dividend, and the board members might have to live with a 20' yacht instead of a 27' one.

It's the same with GMO food. It's advertised as a way for cheaper food (that will "feed the world"), but instead it's mostly a way for higher margins (more profit) for the same inflated prices (besides the DRM/IP-like control on the seeds).

How do you figure? We farmers spend most of our time not producing food, but sharpening our pencils. If the higher cost of the seed wasn't offset in other ways, we wouldn't consider using it in the first place. It has to pay. The grain business, where I operate, is so competitive that even a small amount of overspending will result in losing money. Do that too many times and you'll be out of business completely.

To add to that, the market requires quite a bit more for non-GMO food. Right now I can tell you that non-GMO soybeans carry a $2.50/bu. premium. That gives you a pretty good idea of how much more it costs to grow non-GMO food, at least as far as soybeans go, as that is what it is taking to attract farmers to consider growing those varieties. That is after factoring in DRM/IP-like costs.

>How do you figure?

Well, e.g:

"Farmers are reconsidering the use of biotech seeds as it becomes harder to justify their high prices amid the measly returns of the current farm economy" http://www.wsj.com/articles/behind-the-monsanto-deal-doubts-...

"The introduction of genetically engineered (GE) crops has corresponded with increasing monopolization of seed by biotechnology companies and higher seed costs. This has led to tragedies in some countries, while pushing out conventional, non-GE seeds and reducing farmer seed choices." http://www.fooddemocracynow.org/blog/2013/oct/4/the_gmo_seed...

"Angelika Hilbeck, senior scientist at the Institute of Integrative Biology at ETH Zurich (Swiss Federal Institute of Technology), and several other researchers analyzed seed catalogs in Spain, Germany, Austria, and Switzerland. They found that in Spain—the largest European country to adopt GM corn—farmers’ seed choices declined overall and increasingly became a choice among GM varieties.

“Non-GM cultivars of maize were replaced with fewer GM cultivars,” Hilbeck said. But, in three EU countries that ban plantings of GM corn—Germany, Austria, and Switzerland—farmers have either many more corn seed varieties available to them now than in the 1990s (Germany and Austria) or at least the same number (Switzerland). Hilbeck presented their findings at a conference on GM crop cultivation in Bremen, Germany in June 2012." http://non-gmoreport.com/articles/march2013/farmers-seed-opt...

I mean, I agree that we are backing away from GMOs to some extent. That $2.50/bu premium is worth it. On my farm, we haven't grown GMO soybeans in almost 10 years because of it.

But the fact remains that it takes that additional $2.50+ to cover the costs of non-GMOs. If you took that away, it'd be pretty difficult to not return back to growing GMOs. The costs are lower, and the savings really are being passed on to the customer, in this case – to the tune of $2.50/bu.

I'm still interested in your analysis of how it directly applies to our farms, rather than a bunch of random links. We don't need third-party media to have a discussion with each other. I'm sure you have some good points of your own.

I have some bad recollections of some criticisms of GMO optimism I've heard:

* Current GMOs do not increase yields so significantly as to be considered a necessity for competitive efficiency

* Generally fewer GMO strains are available than non-GMO strains, lowering biodiversity on GMO fields, and some GMO plants (such as Roundup Ready) don't make sense to plant on mixed GMO/non-GMO fields, lowering biodiversity

* GMOs cost extra money (for research, production, quality control, profits)

Overall it is possible that the downsides may outweigh the benefits, and particularly since the benefits (of increased yields/decreased pest issues) are uncertain it is possible for farmers to make "losing bets" which is unfortunate particularly given the use of the "banner of science" to advertise the hypothetical promise of GMOs. While there are still significant advantages to many GMOs, the popular-among-nerds meta-contrarian position that GMOs represent a new lease on the Green Revolution and a necessity for the survival of human life has rather shaky epistemic footing.

> Current GMOs do not increase yields so significantly as to be considered a necessity for competitive efficiency

I think that's mostly a fair assertion. The traits that are on the market are focused more on reducing operational costs (fewer trips over the field) and opening new opportunities for management practices (cover crops are all the rage these days). While those practices might help introduce a small yield bump, the biggest gains are on the reduction of costs. Again, about $2.50/bu when we're talking about soybeans.

Having said that, there is an element of competition at play. Yields of all types, GMO and not, are up significantly. It may be that GMOs did introduce the yield bumps first, forcing those producing non-GMO varieties to up their game. I don't follow that end of the business close enough to say for certain. Something is driving significant increases in yield though.

> Generally fewer GMO strains are available than non-GMO strains, lowering biodiversity on GMO fields, and some GMO plants (such as Roundup Ready) don't make sense to plant on mixed GMO/non-GMO fields, lowering biodiversity

You mean planting many different varieties all in the same field? We actually do that on our corn ground, where we still use GMO varieties. In soybeans, where we haven't used GMOs in years, that would be a big no-no. The market wants to buy soy on specific varieties. The wheat market, where there is no such thing as GMOs, is starting to go in this direction as well.

So, if I understand you correctly, the reality is actually reversed. At least on my farm and many of the farms near mine.

> GMOs cost extra money

Often true, but I don't see how this is much of a criticism? They cost extra money because they are worth more. A business charges what someone is willing to pay, and farmers are willing to pay it because they've done the math.

> Overall it is possible that the downsides may outweigh the benefits

We've touched on some of the upsides: Lower market price, ability to improve soil health through no-till and cover crop practices, reduced use of fossil fuels by reducing the number of trips over the field. I don't know what downsides you are referring to?

There may be room, but you still need a market demand. The chickens were pushed into awful living conditions because those were the chickens that people were buying.

I'm always amazed at how cheap meat (especially chicken) is in the USA. Here in New Zealand we pay over NZ$10 per kg (US$3 per lb).

And unlike our beef, which would understandably command a premium being grass fed (like they're supposed to), our chicken is made the same way as the USA, in cages.

At least we can get reasonably cheap pork shoulder, sometimes it's as low as $7 per kg (US$2.25 per lb). I can also get lamb chops for less than NZ$10 per kg (US$3 per lb).

These prices are actually in line with what we spend in the US

His prices for pounds are off because his math is wrong. $10/kg is actually $4.53/lb, not $3.

You missed the currency conversion. 10 NZD ~= 7 USD.

So what, then, has prevented new startup chicken ranchers from popping up all over the US to capitalize on the overpricing?

I assume (not knowing anything about the industry), is that there is a ton of capital required to enter the market. Combine that with a substantial amount of regulation and it is a difficult market to get into. Besides, even if you did join, you are better off selling at the "monopoly" price even if you don't sell all of your product.

Except you would sell more if you were undercutting the competition pricewise.

You'd sell more, until the competition lowered their prices to compete. At that point, everyone in the industry (including yourself) would be making less profits. Great for consumers, bad for your business.

Well of course you sell at the monopoly price, thats why you entered the market in the first place. I would not think the capital would be particularly outsized compared to similar venture.

Can confirm on the regulatory aspect - factory farms are terribly difficult to get cities to approve zoning for.

Easier said than done.

If a group of big players are keeping the price high artificially then it will be easy for them to drop the price until the "startup chicken ranchers" go out of business. I'm sure there are economies of scale involved, and they can probably drop to the true market price while still keeping a better profit margin than the startup chicken farmers.

Huge economies of scale, existing relationships, need for a lot of startup capital, likely local resistance to establishing a meat-packing plant, etc.

Cause startups are not the answer to everything. Find me a VC who's willing to invest in a chicken ranch, and maybe I'll change my tone.

The Buffett family (yes, that Buffett family) is big into farming. While grain seems to be more up their ally, operating several thousand acres of corn and soybeans, expansion may be appealing to them. Warren's grandson's VC firm is known to invest in progressive agriculture-related businesses. If the right opportunity arrived, I don't see why they wouldn't take up the opportunity.

And if we are willing to be lenient on what VC means, Warren's son is known to have invested in chicken ranches for humanitarian reasons.

>So what, then, has prevented new startup chicken ranchers from popping up all over the US to capitalize on the overpricing?

Capitalism. Which is less about "free trade" and disruption, and more about big players securing any niche for themselves as best as they can (government regulations not required for that either -- they can also do it with buying out smaller competitors to prevent disruption, dividing the market between themselves and forging cartels, playing retailers against one another and taking advantage of their economies of scale, undercutting on price while smaller competitors die and then jacking it, etc).

So unless I am misunderstanding the article, the prices on the Georgia Dock are based on the prices reported by the chicken companies. The prices on the Georgia Dock are then used by the grocery stores to negotiate their prices with the chicken companies.

Would not those negotiated prices then affect the prices that get reported to the Georgia Dock? Am I missing something that prevents this from becoming a circular dependency?

With government subsidies, you might say that the cost of chicken has been artificially kept low.

Or the subsidy's been applied to the vendor as pure profit, instead of reducing the market rate.

I get chicken (leg quarters) for .39 a pound regularly.

Normal grocery store prices are insane.

This implies you do not buy your chicken from a "normal" grocery store. If that is the case, where are you buying your chicken?

The two places that jump out at me as possibilities would be restaurant supply places (for example, Gordon Food Service has storefronts in my area though I don't believe they actually sell to the general public) or "ethnic" markets - often small-chain grocers often listed as "produce" or "carniceria" though they are often full service groceries.

Gordon Food Service storefronts all sell to the general public as of a recent rebranding. They're actually very accessible - though like Costco or Sams Club, more applicable to feeding a large group. Some prices are up at https://ads.gfsstore.com/.

In New Orleans, one sees these prices at local chain supermarkets (i.e., not Winn-Dixie or Whole Foods but Dorignac's or Canseco's) as well as what could be politely termed bodegas in the middle of urban food deserts with crime challenges (one local chain of which has the incredibly apt moniker Chicken Mart)

There is an immensely profitable niche finding regulatorily dictated pricing schemes like this, or LIBOR, or various other "one true commodity price" setups, and mercilessly arbitraging them.

Americans should love this. Artificially inflated food prices are what tariffs and a lack of trade agreements are for. That causes local consumers to pay more to support local producers rather than paying a fair international price. How can someone complain about this article's kind of cheating and at the same time want to restrict cheap imports - which has the same effect of artificially inflating prices?

The prices are artificially set anyway.

I don't think animal friendly practices, environmental issues, waste, health-care (antibiotics), etc. is factored in.

At least superficially, this seems to be "LIBOR fixing, but for chicken."

There's a price index that was created for informational purposes but gradually becomes more financially consequential as it is written into big commercial contracts. Finally, it's revealed that one or more players are submitted self-serving information.

Meanwhile, the high beef prices of the last few years, which as far as I know were due to an actual shortage, have gone back down. I'm glad, I was expecting they were going to stay at the higher prices forever.

An article on artificially inflated chicken prices and no mention of the water scams? Perhaps the purpose of the article has a political objective besides commodity prices.

Like chicken meat is not cheap already.

There are an awful lot of people that would love to eat 20% more chicken.

Meat in general is expensive these days. Chicken has traditionally been a low-cost alternative to beef but in recent years the price has come closer to parity with ground beef.

I don't know where you get that idea. The prices of turkey and pork have remained stable, while the price of beef has declined . It's chicken that has raised in price.

https://www.washingtonpost.com/news/wonk/wp/2014/01/10/the-c...

Isn't that what I said? That's what I meant to say.

think he was responding to:

>> Meat in general is expensive these days

not the other part

I see. What I was saying, that overall price of meat is really low and accessible and this stimulates overconsumption.

...that will be a day when we see this headline regarding health care prices :-)

So has the prices of cane sugar, but not corn and soybeans.

Multi-billion dollar class action suits, incoming...

Aren't all prices "inflated"?? Therefore inflated = market price = fair price. Capitalism

how is this relevant to HN?

Just like the chickens...

Hacker News and chicken problems.... ;)

What's wrong with "Trust, but verify" ?

similar to healthcare and education

"may"

I also find prices of gasoline highly inflated as well as price of dry fruits and beef.

Authorities suspect fowl play in the bookkeeping, but companies refuse to apollogize.

Well I appreciated the puns...

The regulators are probably just chicken.

Eggsactly.

Seriously? We're getting the reddit-level pun threads now?

Yes. Let's refrain from one-line puns.

I'd hate to open a HN thread in the near-future only to have the top-rated comments be puns. Good, on-topic forums are as rare as hens teeth these days.

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