Walmart-at-the-Crossroads-FINAL-06.04.15

9. Chicken Industry
The poultry industry consists of fresh, frozen, and processed chicken and turkey, as well as other
birds. While the extent of corporate consolidation in this sector is not as great as that in the beef and
pork industries, a few major companies are responsible for the vertical and horizontal integrations,
acquisitions, and mergers within the past decades.
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These actions have proliferated the existence of
monopsonies, a market condition where there is
only one buyer along a supply and market chain.
As of today, the poultry industry consists of
over 300 companies with combined annual
revenue of $52 billion. The 50 largest
companies, the largest of those supplying
Walmart, hold more than 90 percent of the
wealth.
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This concentration of power indicates
that there is a growing consolidation in the
poultry industry.
291, 292
In 2012, the four largest
companies processed 57.1 percent of all broilers
(as chickens for consumption are called) in the
U.S.
293
When 84 percent of beef slaughter is controlled by just four companies though, the poultry
sector, in comparison, is not as consolidated.
294
Without a supply management system, such as the one in Canada, this relative lack of
concentration creates a new set of issues. One of the main problems with this system is the inability to
create a price floor. Large companies will try to limit supply to stabilize price, but then in response, the
small and medium-size companies that still exist ramp up production in order to capture market share,
thereby lowering prices again.
295
This lack of price floor is one of the biggest obstacles to gaining
higher wages and stronger health and safety standards for poultry processors. One of the main issues in
the poultry industry, thus, is the absence of a fair supply management system.
Photo by ק ‏,.איתמר ITamar K. [Public domain], via
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