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Comment by roenxi | Hacker News Reader

The obvious thing to do is for the farmer to learn how to package their own chickens, then sell it themselves. The hard part of this should be the however-long-it-takes a chicken to grow + feed for the bird.

Since that isn't happening I'd assume that doing so has been made illegal by the regulators for some reason. Or that "chicken packaging" is wildly misnamed, because it sounds like something you can ... just do. People ate chickens for millennia without relying on 3 chicken packers.

I've had neighbours who keep their own chickens (curse them for the mice). It didn't look so hard a quasi-monopoly could form naturally.

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Meat packaging isn’t something you can “just do.” The hard part is the equipment and manpower to disinfect a meat packing plant, which is done several times a day when in operation.

The reason regulators made it illegal is basic food safety. A meat packing facility - whether that’s an industrial plant or a small group of farmers in a commercial kitchen or whatever - is a hot and humid environment that is an ideal place for bacteria to grow. Now that’s going to happen anyway, but the public safety goal here is to minimize the bacterial load that transfers to the meat so that by the time it reaches the kitchen, the pathogens haven’t reached dangerous levels. That means an entire facility that’s designed to be sprayed down with a foaming disinfectant from wall to wall and crevice to crevice. Small groups of farmers simply can’t afford that and be competitive unless they’re already selling high end organic/free range/etc meat.

Before refrigeration, people ate meat right after slaughter or cured it. They grew the animals at so low an intensity that >80% of the population were sustenance farmers that lived a precarious life prone to starvation at any time. It just makes no sense to compare the infrastructure to feed hundreds of millions in a single country to small scale pre-industrial agriculture.

Which part of that is the tricky part? Spraying down a facility sounds straightforward. Killing bacteria in food products isn't particularly novel either; there are a lot of abattoirs around the world.

We're talking about farmers here. Having to do something a couple of times a day is not going to intimidate them. In an extreme case they'd hire someone and promote them to chief sprayer. These aren't challenges of the magnitude needed to get natural monopolies to form - they're standard style challenges for running a business in an industrial sector. Challenges that farm owners are quite acutely aware of.

If there are monopolies in the US chicken supply chain it is probably just everyday regulatory capture.

Butchers and meat markets that sell meat from locally raised animals is what this looks like.

The post above yours talked about this:

> "Small groups of farmers simply can’t afford that and be competitive unless they’re already selling high end organic/free range/etc meat."

It absolutely does happen. It's at small scale with higher relative costs, so it's only profitable as a specialty product. It can't compete with industrially farmed meat on price. This would be the range of the farmer who doesn't mind doing some things a few times a day and perhaps hires a helper.

Growing beyond the small scale requires the capital to build facilities and hire staff to run them while you're getting the operation going. You might need to be cutthroat on price to be competitive with existing players, so your revenue might not be great for a long while.

How much output do you think a farmer and a helper are capable of, versus a fully staffed modern industrial poultry farm?

I don't know anything about the chicken farming business, but I imagine if there was a simple straight-forward solution for the farmers to escape the stranglehold ("just build your own packaging plant and hose it down couple times per day") then the farmers would have already done it (or rather the situation wouldn't have occurred in the first place).

I don't say this to despair but to argue that we'd need more details before we can make recommendations how to fix things. Also, there is an obvious power imbalance here, but then it's important to identity the source of that power, so you can address the imbalance.

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Agricultural co-operatives exist, even for meat packing and processing.

> then sell it themselves.

One word: “Distribution.” (The Graduate reference).

Distributors hold the most powerful hands in selling physical goods. You can’t sell something, if you can’t get it to market. These cartels (and you are hearing about them, all over. See "Big Potato"), are getting strangleholds on distribution. Amazon has turned distribution as a goad into a dark art.

That’s one reason that the Internet has upended so many industries. It’s democratized distribution of digital goods, and digital goods have become a lot more valuable (sometimes, because of the Internet). With digital goods, advertising and promotion are the new Distribution. You can’t sell your apps/music/images, if no one can find out about them.

Maybe an independent nonprofit can do the research and score food based on how much the pipeline taking it to your table is monopolized vs democratized.

Why, exactly, distributors hold so much power? They are just middlemen. Can you explain?

There's probably hundreds of reasons, and a real answer is likely worthy of a graduate-level class. Like this one[0]. ;)

But we can start with the massive capital requirements of being a logistics provider. It's not something that many farmers, shopkeepers, or even medium-sized businesses could manage.

[0] https://www.youtube.com/watch?v=uSLscJ2cY04

Big box stores want high volumes of a standardised products. This is hard to do for a lone farmer. It would be easier if they could sell to smaller supermarkets and butcher shops. Smaller supermarkets and butcher shops require walkable neighbourhoods and a vibrant down town; I call it the walkable neighbourhood theory of everything.

People who live in walkable neighborhoods will always drive to big box grocery stores to buy most of their chicken. The local butcher shops charge too much, and for busy families it's a huge hassle to have to visit multiple small shops for meat, dairy, produce, bread, etc. The big box stores are a huge time saver.

Yes, reverting food distribution to the pre-car situation is a lost cause that would also create plenty of problems anyway.

Given that, it's a market in dire need of governments messing with it. The current situation is really bad.

Around here there's a trend for the local butchers, veggie and dairy farmers etc to do doorstep delivery.

Bingo! It's also an antitrust thing but yes, look up the number of grocery stores in a northeast city 100 years ago vs now, it's mind boggling. Like at least 25x difference, maybe more, I can't recall.

> Since that isn't happening I'd assume that doing so has been made illegal by the regulators for some reason.

the lack of antitrust action and the price of entry in the market are a market failure modes that could bring in the same final result. Especially, if the packagers are forming exclusive deals with the distributors to prevent new entrants from achieving market share.

Theoretically a lot of stuff can happen. As a practical matter, this has to be regulatory. Eggs and chicken meat is a very well understood product and by nature a completely normal market. I've literally been offered chicken meat by roadside sellers who butcher them on the spot and cook up a meal; it is a bit gruesome but not outside the complexity of operation that one family can manage.

The part of the supply chain acting as a "monopoly" is too simple to replace. Someone can literally set up a new local butchery, buy directly from the farmers and the exclusive dealership network is broken. Probably need some know-how and a refrigerated truck. It is barely possible that the sort of monopoly structure being described could have been built over the entirety of the US without regulatory support. It'd require something approaching a mind control ray to keep the competition under control.

I believe the other comment saying that chickens are a bad business, competition would tear through the margins like a rooster eating a mouse. But a country wide monopsony on chicken purchases is absurd (unless the regulators are pushing it). If nothing else there are a bunch of low-income people who'd be happy to buy and butcher their own chickens if it cut out a middle man. It isn't feasible to build a natural monopoly.

Theoretically, it is possible to do anything of that, but what is missing from your business plan is selling a commodity product at scale on a competitive price. And if you somehow manage to do something like that, nothing stops the big player of your region from going to any of your clients and offer them dumping prices for ditching you or going to the local vendors of animal antibiotics and offering them premium price if they supply only chosen farmers thus squeezing you and your suppliers from both ends.

If you have a market with low margin and no differentiation between the offered stock, the gains are in size and it logically leads to a few players in the market so I doubt that the independent butchery has to be butchered and won't die of natural causes due to high costs or because a few of its partners are having a bad year.

The horrible thing is there can be lots of differentiation here. I grow my own meat birds for my own consumption, and they taste radically better than anything I’ve ever had in America. (Barring when I eat my friends’ birds.) Artisanal chicken could definitely be a thing, although it would definitely cost more.

I feel that regulatory capture is part of the problem - processing your own birds is safely is definitely possible, but what is required to process them for sale makes it so the local USDA butcher would have to charge as much for a chicken as for a sheep, and that’s just not viable.

Aren't both of the examples of what they could do illegal ?

You saying that consumers having meet on dumping/low prices is illegal? You are a communist! /s You saying that a businessman is obliged to go against their own interest in stead of selling their meds to the highest bidder? You are a communist! /s Free market without regulation is exactly that - freedom for those who can shape the market as they wish and no government violence necessary so it is kosher.

setting aside regulatory issues (and not commenting on whether any of that is good or bad), there is no universe where independent chicken farmers, solo or in a group, are going to compete with a group like Perdue in the industrial foodstuff space. maybe you get a cottage industry farmer's market business going or whatever but you aren't going to see Farmer Bob's Foghorn Leghorn Boneless Breasts on shelves in the local Wally World any time soon.

My impression (partly from reading Zephyr Teachout's excellent book Break Em Up) is that a farmer cooperative would not find the big grocery stores willing to carry their products. Those stores are intimidated by whichever of the big-3 processors is active in their region. Selling at a farmers market or mom & pop store may be totally feasible, but the grower had better be sure that was a long-term solution, because the big processor will blackball them for trying.

The only winning move is not to play. My grandfather tried his hand at chicken farming about 100 years ago (didn't go well). It was a bad business then and it’s a bad one now.

If it is bad for humans, imagine what it must be like for the chickens.

Well, if you or one of your loved ones is considering going into the being-a-chicken business, I would hope that HN would likewise dissuade you.

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