Standing Up to the Chicken Industry’s Abuse of Contract Farmers
The meat industry flexes its anti-competitive market power in abusive ways. Learn how one Tyson Foods contractor featured in Super Size Me 2 is working with Public Justice to stand up to an unfair system that exploits farmers for profit.
Charles Morris is one of the lead plaintiffs in a case against Tyson Foods that Public Justice is working on as co-counsel. The suit is challenging the company’s unfair system of paying its contract growers, or farmers, known as the tournament system. There is also evidence that Tyson is colluding with other chicken companies to drive its farmers’ wages down, which has led to several legal challenges.
How did you get involved in standing up to Tyson?
Charles Morris: I had been growing chicken for years in Florida before talking to Tyson about moving to Kentucky to grow chickens for them. We were negotiating the sale price for the chicken houses, and I was about to walk away from the negotiations when they dropped the price significantly. They were almost begging me to take on these houses. That’s what they do: they offer potential growers seemingly sweet deals to get them into the business. You might even do well initially. But things go downhill fast.
“Tyson can’t grow these chickens because they don’t make money doing it. The company knows this. The industry also knows that once a contract farmer’s chicken house goes up, they’re going to grow chickens even as they sink into debt.”
Explain when you realized that the deal was no longer so sweet.
First, a couple of their employees rolled on them at the hatchery. They knew the company was treating me unfairly, and they told me, and urged me to investigate further. They said, “They are giving you old chickens and old feed because they know you’re big enough to absorb the hit.” [The industry uses the euphemism “non-prime” for old chickens and “reclaimed” for old feed.]
I had been wondering why my flocks weren’t earning as much under the tournament system, which is completely dependent upon the quality of the inputs (including chicks, medicine, feed, etc.) provided by the company. Under the tournament system, the company determines when to pick up the chicks. Everyone that delivers chicks in a week is entered into the tournament, and then the company ranks you against all the others that delivered that week. There is a baseline, and depending on the ranking, you get paid either above or below that baseline. I have multiple houses delivering in the same week, so we can show that if the same person delivers the same thing the same week, they can have very different payments.
When I found out that the company was providing me lower quality inputs, I was furious. I was trying my best, and I’d grown chickens for 25 years, so I knew what I was doing. I was doing the right thing, but Tyson wasn’t. When I asked the managers at Tyson about it, they told me that it would cost the company a lot of money to make it a fair system. So clearly, they are profiting from the abuse of farmers who are doing their best.
The industry is known for retaliating against its workers when they blow the whistle on what’s really going on. Did you receive retaliation as well when you started digging into this?
Absolutely. First of all, the people at the hatchery who alerted me that I was getting old chickens and feed have since been fired. We’ve had a couple of them got severance packages with nondisclosure agreements so they’re not throwing Tyson under the bus. The company is doing everything they can to keep them quiet.
As for me, Tyson retaliated, definitely. In the tournament system, it should be “first come, first served”. But they were holding me back and waiting for the old hens and chickens they brought from other companies, and saving them for me. They were dumping almost 90 percent of old reclaimed feed on my farm. With old feed, fat becomes rancid and protein starts breaking down, which isn’t as good nutritionally for the chickens.
They were also scheduling deliveries for the hottest part of the day, instead of the customary night time deliveries. They had one tech that would come through here and harass me for little things. They’d tell me to do this or that, so I asked them to show me documentation that these things they were dictating actually work in growing these chickens. These techs have never grown chickens. I’ve been doing it for 28 years.
How did the case come together?
You become friends with the other farmers, and you start seeing the same things. One time you’re on the top, one time you’re on the bottom, but you’re all doing the same thing. The tournament system is not fair because it doesn’t reward the hardest working farmers.
In terms of fear of retaliation, we’re all going broke — not really making it. So any fear is gone. It’s over with. There’s no do-right with these guys.
A core part of the case Public Justice is working on involves antitrust claims. Why do you think antitrust is such an important issue for contract growers?
If things don’t change, the contract growers are going to be over with. But Tyson can’t grow these chickens because they don’t make money doing it. The company knows this. The industry also knows that once a contract farmer’s chicken house goes up, they’re going to grow chickens even as they sink into debt. The company keeps its growers in debt so it can exploit and control them to maximize profits. They get farmers to grow for them with great deals in the beginning, like with me. You talk about a con job…
Also, we are actually employees, because they dictate everything we do, but then they insist on calling us independent farmers [Note: the U.S. Small Business Administration recently determined that contractors in the poultry industry are actually employees, not independent businesses.] But since contract growers only control about 2–3 percent of what goes into producing these chickens — at most 5 percent — they are under the company’s control. The industry wields incredible power over the market, and that needs to be fixed. Addressing this unfair system would make it better for the growers and the company.
Tyson is a $92 billion dollar a year company in gross receipts thanks to this system.
This case was originally filed as a breach of contract case brought by Whitfield, Bryson and Mason. David Muraskin here at Public Justice heard of the case and wanted to advise on the antitrust theory. What are some ways that Public Justice has helped advance your case?
Dave and Public Justice have added so much to the case. They’re head and shoulders above anyone I’ve ever been associated with.
Without Public Justice, we wouldn’t be where we are today. They take a different approach. I remember when this all started, I talked to Dave and he saw and understood the injustices we face in the poultry industry, and he jumped in to get involved with us.
Anyone can bring attention to the case, but the attorneys we’ve worked with at Public Justice are good. And they are honest. They are standing up for the injustices in this world. It makes us farmers feel a whole lot better with Public Justice onboard.
The release of Super Size Me 2, which featured your story, was delayed thanks to controversy around the director for his confession regarding sexual misconduct and his involvement in a sexual harassment claim that he settled. You must be glad that it’s finally being released.
I was disappointed when the movie was delayed because we really wanted this information to get out into the world. I’m going to New York this month with my daughter to do press interviews. It will open in 220 theaters across the U.S. on September 13 after a September 6 premiere in Los Angeles in New York. I’m just really happy that the story of how these companies operate will get told to a wide audience.
Learn more about the Public Justice Food Project at food.publicjustice.net.