How Four Companies Came to Rule U.S. Meat Industry

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Feb. 18 (Bloomberg) -- Christopher Leonard, author of “The Meat Racket,” looks at how only four companies hold the majority control of the U.S. meat packing industry on Bloomberg Television’s “Bloomberg Surveillance.”

Industry on this?

It is starting to trickle in.

We will see how it goes after talking about it this week.

Tell us more about the book.

What inspired you to write it?

I have been covering the meat industry for a while.

For newspapers and for the associated press.

The final conclusion of the book is not how the book started.

I was just reporting on the industry, but the more learned about it, the more learned that four companies control the market today in a way that they have never controlled it at any point in history, including than 100 years ago.

To take it back to upton sinclair and "the jungle," these meatpackers deliver to adam johnson that overpriced beef, kobe beef.

Whether it is wagu ribeye for adam johnson or dark meat, we deliver fresh food to americans every day.

The modern meat industry is a technological marvel.

It does a fantastic job of delivering meat to u.s. cities seven days a week, 365 days he year.

The industry has become highly consolidated.

We opened with a story about comcast and the cable industry.

It was a similar merger spree, similar wave of consolidation in the meat is mess in the 1980's and 1990's. what is the relationship between these businesses and local farmers?

They do not actually farm themselves.

They farm out the farm.

The typical system you're going to see today is so-called contract farming.

A person like me who lives in arkansas might borrow $500,000 to $2 million to build a giant factory farm and then i sign a contract with tyson foods.

Tyson will deliver the chickens, the feed.

I grow these birds under the exact specifications of tyson foods.

It is a remarkable model.

It is like a franchise.

Exactly.

Like a mcdonald's franchise.

There is nothing inherently wrong with this.

This allows these companies to orchestrate their supplies.

What has happened though is that you have this sort of vertical integration, if you will, coupled with horizontal immigration and the issue is, in these towns were spent months and years reporting, there is no competition.

Companies like tyson have monopolies where they operate because they bought up all the local chicken plants.

These farmers do not have a choice if they are treated orally by the company.

It happens all across rural america.

They can keep the profits and depressed with the pay for mates.

-- emeats.

They did send us a quote, talking about your book.

Saying, if a competitive industry that operates under the most intensive regulatory and inspection regime in america and still produces the safest, most varied, most abundant, and most affordable food supply in the world isn't good enough, then we challenge them to point to a nation with a better system.

Well said.

Europe is a third more expensive for food.

What are they doing wrong versus europe versus asia?

I don't point to another nation that does it much better.

That nation is the united states in 1982. the top four meatpackers controlled 26% of the market.

Today they control 86%. if the quality better or worse than it was versus 1982? when you industrialize meat supply, you are not shooting for high-quality and high variability, you are shooting for the middle range.

I have seen that again and again.

Chicken, pork, or beef.

They started using a growth struck a couple of years ago.

That has been outlawed since then.

It has.

Animal welfare concerns came up.

They fed this drug to the animals even though it was proven to produce lower quality steak.

They're driving directive is high-volume, consistent delivery, and cheap price.

Interesting.

We have to leave it there.

No doubt this debate will continue here on surveillance.

"the meek racket" -- "the meat racket." the controversial book to say the least.

The forex report.

Moves in japan.

Yen weaker, euro stronger.

140.55. i would also look at sterling.

Sterling is stronger.

Look at that as a trend as well.

Adam?

Coming up on the next hour on

This text has been automatically generated. It may not be 100% accurate.

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