This week a new book called The Meat Racket by author Chris Leonard was released. The book is a critical look at the meat and poultry industry claiming that major meat companies dominate the market and restrict competition. While AMI agrees with Leonard’s assertion that today’s modern meat and poultry industry is a technological marvel, his assertions in the book are not backed up by the facts. With that in mind, here is AMI’s statement on the book:
“Chris Leonard’s new book The Meat Racket uses a series of personal stories and anecdotes to critique the U.S. meat and poultry industry. His book makes clear his nostalgic vision for the U.S. meat and poultry industry: a vision pining for a return to an earlier part of the 20th century where meat companies secured their livestock at auction barns, buying stations and from farmers they knew. Although wrapped in a ‘good old days’ theme, such a system was less efficient and less precise in delivering products consumers wanted while forcing them to pay a higher potion of their income to obtain meat and poultry products.
In fact, in a February 18 interview on Bloomberg TV after characterizing today’s meat industry as a “technological marvel,” Leonard was asked to point to a country with a better meat and poultry production system and he responded, “That nation is the United States in 1982.” In 1982, Americans spent 8.3 percent of their disposable income on food consumed at home. Today, 5.7 percent of Americans’ disposable income is spent on food consumed at home. Meat products graded at lower quality grades and the wide variety of products enjoyed today weren’t even offered. In the industry, major initiatives in food safety, worker safety and animal welfare had not yet been implemented. Perhaps Leonard wants to travel back in time to enjoy higher priced, lower quality and less convenient products, but we don’t and we are confident that our customers don’t either.
Although Mr. Leonard’s distaste for the modern U.S. meat and poultry industry is clear, the data paint a picture of a successful and innovative industry that contributes much to the nation’s nutrition, economy and communities. Consumers in the United States spend less of their disposable income on meat and poultry than in any other nation in the world while enjoying the safest meat and poultry supply. The meat and poultry industry employs approximately 500,000 people directly and contribute to jobs in foodservice and retail where its products are sold. The industry pays billions of dollars in taxes that fuel communities and donates millions of pounds of products to feed hungry people through a longstanding partnership with Feeding America and many other organizations.
Satisfying consumer demands is commonly accomplished in the supply chain through contracting and marketing arrangements with livestock producers to purchase livestock that meet the often very detailed specifications and characteristics for animals, such as a certified breed, raised without hormones or antibiotics, lean, grass fed or organic. These relationships between producers and processors are a positive development that livestock producers have said publicly they value greatly. Not only do they get paid premiums for meeting specifications, their marketing agreements are treated as assets by banks when they seek to borrow money to invest in their operations. Leonard’s view that these partnerships are somehow suspect is troubling, especially considering that the largest livestock organizations in the nation have actively opposed restrictions on marketing agreements.
Leonard makes much of the idea that four companies slaughter a large percentage of livestock and poultry in the U.S., but he ignores how similar meat and poultry processing are to many other industries and he omits or ignores data showing that numerous other industries, such as wireless communications (94.7 percent of the market share) or household appliances (90 percent of market share), have greater “four firm concentration ratios.” His book also ignores how carefully the industry’s structure and behavior have been reviewed and scrutinized repeatedly by federal agencies and independent third parties and found to be dynamic and competitive.
Mr. Leonard’s criticisms of the meat and poultry industry should be examined against its results. 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 for Mr. Leonard, then we challenge him to point to a nation with a better system. While waiting for that answer, we’ll keep on providing meat and poultry to the 95 percent of Americans who routinely make our products part of their diets.
For more information, visit www.TheMarketWorks.org .”