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1-Page Summary of The Meat Racket

Overview

Have you ever eaten meat from Tyson Foods? No? Well, if you’ve ever had a Chicken McNugget, or a hamburger in your staff cafeteria, it turns out that they probably contain meat from Tyson Foods!

Tyson Foods is the largest meat company in the US. In 2011, they raised 2.1 billion chickens and slaughtered 7.2 million cows and 20.5 million pigs for consumption by Americans.

The reason why you don’t know much about them is because they’re not very vocal about their business practices. This passage will help to change that by explaining how the company has risen to the top of its industry, and it shows that while they have brought cheap prices for consumers, it spells disaster for farmers.

In this passage, Tyson foods force their farmers to take part in a tournament. Chickenization is another name for vertical integration. The meat industry’s plans to reduce the amount of antibiotics they give animals have failed because it was too complicated and costly.

Big Idea #1: The secret to Tyson Foods’ huge success was vertical integration.

How can a company increase its profits without improving the product? One way is to improve the marketing campaign. Another might be streamlining processes. For a huge company, however, these small-time solutions won’t cut it; something grander is needed.

For Tyson Foods, vertical integration was a grand idea that helped the company control its independent partners. In this case, companies throughout the meat supply chain were placed under Tyson’s tight grip by virtue of their contractual relationships. They had to follow Tyson’s strategy and prices as well as work with other Tyson companies.

Vertical integration helps mitigate competition and unify strategy. If one company controls the entire supply chain, it’s difficult for a competitor to enter that market because there will be no farmers or meat processing facilities to work with.

Furthermore, if you control the entire production process and there’s no competition, then farmers, butchers and processors have nowhere to go when they oppose Tyson’s practices.

For example, Tyson Foods prefers quantity over quality in its production. It has forced farmers to use Zilmax, a drug that makes cattle grow faster and bigger. Farmers either agree to this practice or get cut out of the business. For Tyson Foods, it’s incredibly profitable – for its suppliers, not so much. In 2010 alone, Tyson sold $28 billion worth of meat products earning $780 million in profit.

Big Idea #2: Tyson Foods’ success was built upon the insecurity that farmers experienced during the Great Depression.

Until the first decades of the 20th century, small family farms were dominant in America. Nowadays, large industrial farms dominate American farming.

The Great Depression was a time of great economic hardships. Many farmers were struggling to make ends meet, and many others had lost their farms. Tyson Foods saw this as an opportunity (or “savior”) to build their chicken empire by making chickens more popular with the masses. This required that they find a way for chicken to be mass produced effectively on farms so it could be shipped easily without losing mass or going bad before reaching its destination.

Tyson Foods Inc. bought a food mill, chicken hatcheries and slaughterhouses to help solve the problem of getting enough chickens for its factory. However, it still needed farmers.

Farmers were desperate for work during the Great Depression. Instead of buying out their farms, Tyson came up with a different strategy: “Work for us and do what we say, and you will earn a steady paycheck.”