Arty G. Schronce and the Price of Chicken
December 7, 2016 7:42 AM   Subscribe

Are chicken prices artificially high? “I have come to question the validity of some of the information provided,” [Schronce] wrote [PDF] in September in preparation for a meeting at the Georgia Department of Agriculture. “I do not think I am getting actual weighted average prices from some companies.”

How chickens are priced has been a contentious topic for the last three decades as the industry has consolidated. Only a handful of companies now sell most of the country’s poultry. You Might Be Paying Too Much for Your Chicken (NY Times)

Over the past two years, the price estimate, known within the industry as the “Georgia Dock,” has drifted significantly upward from other chicken price averages, rising about 20 percent or more out of line with a separate but lesser known index maintained by the USDA. A deviation in supermarket chicken prices of that magnitude would have cost U.S. grocery shoppers billions of dollars in recent years. If you thought you were paying fair prices for chicken at the supermarket, think again (Washington Post)

The gauge has been used widely to help formulate some of the sales contracts between producers and consumers. The wholesale value of the U.S. chicken industry’s annual shipments is $60 billion, according to the National Chicken Council. Georgia Suspends Chicken Price for First Time in Over 40 Years [AgWeb]

"We’ve used it for 40 years and everybody’s always had a lot of confidence in it,” Sanderson Chief Financial Officer Mike Cockrell said of the index in a Nov. 23 telephone interview. “I hope they get this right because as I say, we’ve used it so long.” Chicken Producers Asked for Affidavits Confirming Price Data (Bloomberg)

If you followed the Libor story at all, you know how this one goes. Chicken producers have an incentive not to be entirely honest with Arty Schronce, and "critics say the index does not do enough to verify the data it receives." And the Georgia Dock price -- which is "widely used by grocery stores in America when buying chicken from producers" -- is now significantly higher than other, more trade-based chicken indexes. There's a class-action lawsuit alleging a conspiracy. It is "Chicken Libor."
Source Code and Chicken Indexes (Bloomberg)

Arty G. Shronce also writes the "Arty's Garden" feature for the Georgia Dept. of Agriculture Bulletin

[Note, most of these articles feature pictures of dead chickens and/or crowded conditions]
posted by chavenet (11 comments total) 6 users marked this as a favorite
I'm trying and failing to make a clever portmanteau from 'chicken' and 'LIBOR'

LIBroiler, maybe?
posted by leotrotsky at 8:03 AM on December 7, 2016 [2 favorites]

On the other hand, the price of boneless, skinless chicken breast (when it's on sale, which is when most people I know buy it) has remained at $1.99/lbs for around two decades. I recognize the sales like that may be a minor loss leader for the grocery stores, but I suspect that we may not be paying enough for chicken and that the way that price has not marched up with inflation has been on the backs of non-unionized grocery and food processing employees.
posted by Candleman at 8:04 AM on December 7, 2016 [4 favorites]

Free range chickens here in France, bought from producers via the FoodAssembly platform (La Ruche Qui Dit Oui en France), are around 16-20 euros per kilo, or about 7-9 euros a pound. So yeah, two dollars a pound for the priciest cut of chicken is definitely not helping chicken welfare or anything surrounding it.

Also I can attest that a small free range chicken is SO MUCH BETTER, no seriously unimaginably better, than the poor things sold in US supermarkets.
posted by fraula at 8:09 AM on December 7, 2016 [9 favorites]

What the company that's been redacted? Tyson?
posted by Diablevert at 8:11 AM on December 7, 2016

Can someone explain the key point I'm missing, which is why exactly is Georgia publishing this information in the first place?

Is it just something their Department of Agriculture started collecting for internal use that came to be used by others? Do they collect it solely for the benefit of the companies who are using it?

I understand that poultry is a big industry in Georgia and collecting prices for yearly statistics is part of that, but I'm trying to figure out how publishing unverified spot prices could be used for anything other than collusion.
posted by madajb at 8:50 AM on December 7, 2016

Michigan Poultry Report here: I recently paid 69 Cents a pound for dressed whole chickens, averaging 4.5 to 6 pounds each. 69 CENTS A POUND! If there is artificial price inflation, I'm not seeing it here.

Though I will say that the price for breasts and boneless, skinless thighs does fluctuate mightily (between 1.99 up to 3.99 per pound) over the course of the year, so perhaps the inflation is built into that sector of the market. ¯\_(ツ)_/¯
posted by Chrischris at 8:54 AM on December 7, 2016 [1 favorite]

meanwhile in Canada thanks to supply management I get excited to see BL/SL breasts for twelve bucks a kilo.
posted by Sternmeyer at 9:15 AM on December 7, 2016

As a 25+ year buyer of food for DoD I can tell you I'm sure there's a level of collusion between big protein producers and there always has been. They belong to trade industry association groups, they get together periodically to discuss items of interest to the industry like perhaps pricing. The consolidation in the industry doesn't help the consumer either.
posted by fixedgear at 9:32 AM on December 7, 2016 [3 favorites]

I don't want to completely derail with, "but chicken is cheap." With the volume of chicken that the big producers move, even a penny or two per pound is big money, so if they are conspiring to do so in a deceitful manner, there should be consequences.
posted by Candleman at 11:52 AM on December 7, 2016 [2 favorites]

NW Washington State here; as in the older thread about the price of rotisserie chickens vs. raw whole chickens, I have noticed the price of raw whole chickens to be fairly high, at $3-$5/lb ($13-$20 for a bird), compared to the "Five Buck Cluck" ready to eat rotisserie chicken; while BLSL breasts have been right around $1.99-$2.49/lb for as long as I can remember.
posted by xedrik at 12:52 PM on December 7, 2016

Safeway prices, CA bay area:
$1.29/lb drum sticks or thighs
$0.79/lb whole chicken
$0.69/lb whole turkey

$1.99/lb pork shoulder (the other cheap meat)

$2.67/lb roasted chicken ($5 for 30 oz.)

These chicken prices don't seem out of line (other than maybe in a "meat shouldn't be that cheap" way).
posted by ryanrs at 12:48 AM on December 8, 2016

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