Tyson-Tecumseh acquisition could lessen competition in the poultry market
“Greater consolidation by large companies including Tyson allows them to push out smaller companies or farmstead producers who would have difficulty competing with Tyson’s superior economy of scale,” said Marie Burcham, a food and farm policy analyst with the Cornucopia Institute.
Cornucopia Institute's statement says that this is true with organic chicken and turkey because small brands are more impacted by the high costs of organic grain and limited consumer recognition. Compared to the big companies in the organic industry, small companies are struggling to stay afloat, "even though their products are often of higher quality."
“We are concerned that Tyson and other large industrial livestock producers will easily be able to beat out any competition by controlling prices and squeezing more moderate-sized processors and marketers,” said Marie Burcham, who specializes in looking at livestock issues for the Wisconsin-based Cornucopia Institute. “We already see this happening in the organic poultry market. Livestock raised with true outdoor access and local feed carry the same label as birds that are confined without outdoor access, raised using industrialized methods and fed imported grain and other feed of dubious origin.”
The market for organic poultry grew in sales volume by 8.6 percent from 2016 to 2017 (more than four times the rate of conventional poultry growth). According to USDA’s Economic Research Service (ERS), the number of certified organic broilers produced in 2016 totaled more than 19 million and the number of certified organic turkeys was 410 thousand. The impressive growth of the organic poultry market in recent years made this move attractive to Tyson, with its representatives noting that the Smart Chicken brand is a leader in the organic poultry market and would give them a greater slice of that market.
The biggest players in the poultry industry, Pilgrim’s Pride, Perdue, and Tyson are heavily invested. Together they already dominate the growing organic market.
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