Beak Capitalism, Part 2: The Chickenization of Everything

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1:09But besides being a good egg layer, the chicken of tomorrow will be an improved meat producer. Here's an example of the progress that's been made already. Notice how breeding has increased the amount of meat on the breast. Look at that drumstick. This bird was fattened in the same length of time and on the same amount of feed as the other one. Make your own guess as to which is the more profitable to raise. For much of America's history, chickens look different to the way they do today. They were thin, elegant even. Slim and upright, the average bird weighed about two and a half pounds in the 1920s.

1:54And chickens were raised differently, too. On small farms and homesteads, the birds and their eggs provided a valuable source of extra protein and the occasional Sunday roast for millions of Americans.

2:09But today, chickens are front-loaded, feathered freaks. After years of commercial breeding, the weight of your run-of-the-mill roaster has more than doubled to a chunky five or six pounds, way more than chickens of the past. Chickens, as our great-grandparents would have understood them, looked very different from chickens today. They were scrawny, they were rangier, they could move around a barnyard, and they could flap up into trees and avoid predators. And that's almost nothing like the chickens that we eat today. So if you went back to the time of, I guess, our great-grandparents, let's say at the beginning of the 20th century, People didn't eat chicken that often.

2:55And that seems very bizarre to us now in the era when there are a million forms of chicken nuggets in the cold case at the supermarket. And there's a chicken sandwich on every corner. But chicken used to be kind of special.

3:16Welcome to the second installment of Beat Capitalism, our Odd Lots special series in which we are examining the U.S. economy through the lens of chicken. If you haven't listened to our first episode where we talked about chicken prices and the consumer experience of eating chickens and eggs, you should definitely go back and do that. In this episode, we're going to focus on the birds themselves and the people that grow them. Because chicken actually has a lot to say about the structure of the labor market, too, and the relationship between big companies and their workers. And a lot has changed from the backyard birds of yesteryear.

3:58To understand what's happened to chickens and the people who grow them, it helps to consider where they started from. Maren McKenna is a journalist and author who specializes in public health, and she wrote a book called, appropriately enough, Big Chicken. As we said, chickens used to be a lot smaller. Families might keep a few egg layers in their backyards, and once the birds reach the end of their laying life, they might be put in the proverbial pot. One key thing is that chicken meat for a long time was a tree, not a staple. Now, as a rule, older chickens that have been running around a backyard don't usually taste as good.

4:33They're leaner, they're chewier, and there just aren't that many of them compared to today's industrial-scale farming. But things started to change in the 1920s and 1930s. To satisfy increased demand for chicken meat, farmers started scaling up and raising their birds in big chicken houses. We'll talk more about those in just a little bit. Then in the 1940s, after the Second World War, something big happened on the way to big chicken. To understand where the industrialization of chicken comes from, and after that the industrialization of almost all the other proteins that we eat, You really have to go back to the middle to the end of World War II, and a couple of things are happening at the same time.

5:18The first is that there's a war on, and there's a lot of soldiers and sailors deployed around the globe who need to be fed. So there's a great deal of pressure on meat producers to increase their production. Pressure that goes away when the war is over and when that guaranteed market from the military forces suddenly vanishes, leaving them pretty overextended. The second is that immediately after World War II, kind of extraordinarily, there are a number of extreme weather events in growing areas around the globe. There are typhoons and there are storms, and this is added to the destruction of growing areas that occurred during the war.

6:01and the destruction of naval fleets and of fishing vessels. So there's both an overextension of meat production and also a sense of fragility of the food system. It's against this backdrop that biologist Thomas Jukes entered the picture. With more and more chickens now being kept in big houses, the birds were no longer able to forage for bugs and grubs and grains on their own. They needed help to survive indoors. And that's where Jukes comes in. Jukes was attached to a team that had produced the first antibiotic of the tetracyclines that we still use today. It was called oreomycin. He also happened to have been given an assignment to address the dietary needs of chickens.

6:42Because part of the issue of the meat industry feeling overextended after the end of World War II was that they felt they needed to cut costs. This is actually the point at which we start entering into the part of American agricultural history where livestock starts getting fed a lot of grain. But there was concern that grain didn't have a full nutritional profile, and so they were looking for inexpensive supplements. And in a very famous experiment, Jukes bought a whole bunch of baby chicks, divided them into groups, gave each group some kind of supplement that was available on the market at the time.

7:17cod liver oil, synthesized vitamins, brewer's yeast. And to one group, he gave the ground-up, dried remains of the growing medium in which his company's drug had been made, oreomycin. And when he assessed the results of the experiment on Christmas Day, 1948, he found that the chicks in his experiment who'd been given the oreomycin leftovers had gained more weight than any other set of animals in the experiment. And from that recognition, an entire industry of giving antibiotics to animals began. Jukes called that effect growth promotion, and they filed for a patent. So the introduction of growth promoters helped the birds survive the great indoors and get bigger, but that wasn't the last of the chicken revolution.

8:11One was that chickens themselves changed physically, thanks largely to the U.S. Department of Agriculture, which in the late 1940s and early 1950s sponsored a contest among chicken breeders called the Chicken of Tomorrow. Help in developing the chicken of tomorrow.

8:33You can't take it for granted that every hen is earning your keep, even though laying an egg ought to be easy for any chicken. That's what you think, big boy. Well, anyhow. The idea of the Chicken of Tomorrow contest was to make chickens meatier, to produce a bird that would have more breast, that would be big enough to feed a family, which was kind of hard at that point for a four - or five-person family to eat one chicken and be satisfied, and also to be very predictable in a number of ways, to be a single breed. And after a couple of years of competition, the Chicken of Tomorrow contest produced the prototype for most of the chickens that are raised today.

9:22Blocky, mussels, white-feathered, docile, not interested in running around a barnyard and flapping up into a tree, content to sit in one place. So antibiotics and breeding helped turn the chicken of tomorrow into the chicken of today? Well, that's not quite all. Actually, a lot of things were happening on the chicken innovation front around that time. The second thing that drove the difference between the chicken of yesterday and the chicken of tomorrow is that we changed our orientation to how we eat chicken from buying birds that were whole and had to be roasted or cut up into pieces and had to be pan fried or broiled into a source of protein that was disassembled at the manufacturing level into things like nuggets.

10:11so that people could consume chicken without having to deal with the physical reality of a chicken. It's hard to imagine a world without chicken nuggets now, but as Marin lays out, it wasn't until the 1960s that these became a thing. And it was a very deliberate decision. After all, if you want to sell more chicken, you have to get people to eat more chicken. And one way of doing that is giving them more options to consume it. And then boom, the chicken nugget was born. And these little nuggets of chicken prove to be pure gold for some businesses like McDonald's. McDonald's. Yes. And Joe, you might be surprised to find out that McDonald's didn't actually invent the chicken nugget.

10:55Here's Marin again. So we all think of the chicken nugget as a creation of McDonald's. And certainly McDonald's would claim that the chicken nugget is their thing. introduced in the late 70s. By 1980, they were blowing the doors off in the McDonald's restaurants where they were sort of secretly introduced. But it's pretty widely understood in the poultry industry that McDonald's shouldn't get all the credit because the prototype, the predecessor of the McDonald's chicken nugget, was actually invented by a kind of tinkerer scientist in a basement laboratory at Cornell University, a guy named Robert Baker, who was not primarily interested in chicken, but rather was interested in essentially how to avoid food waste.

11:43And he was very troubled by how much of the carcass of a chicken goes to waste. And he wanted to find ways to use as much of the carcass as possible, as much of the meat on the carcass as possible. And he came up in this basement laboratory with a bunch of graduate students with things that we now take for granted in supermarkets. Chicken, bacon, chicken cold cuts, chicken sausages. But his signature contribution to the future of chicken was a thing that he called the chicken stick, modeled to some degree on fish sticks, which had been introduced about 10 years earlier. The chicken stick was chopped, formed, pressed chicken meat, sucked off the bones, covered with a breaded coating, frozen, and frozen in such a way that when you took it out of the freezer and fried it or baked it, the coating wouldn't disassemble from the rest of the meat.

12:43That was a kind of secret process that Baker invented, but it didn't stay secret. It was released in an agricultural extension bulletin that Cornell published and sent all over the country. They didn't in any way attempt to keep any IP in this. And as a result, the idea of something that looked like a chicken nugget was out there in the world. And 17 years later, out came the McDonald's nugget. Suddenly, a lot more of a chicken could be used. And thanks to antibiotics and breeding, there was more chicken around to sell. One way to think about it is that raising chickens went from being a really small-scale agriculture process to more of an industrial thing.

13:26There's a reason it's called factory farming, after all. The idea is to produce as much meat as you can at the lowest possible cost and then use it as efficiently as possible. And to do that, you need standardization, new technology in the form of growth promoters, and scale. I really think we can say that it's because of antibiotic use that we have the modern industrial-scale meat production that we have today. Without that early use of antibiotics as growth promoters, no one would have understood that you could actually produce animals almost like widgets in a kind of Henry Ford model. And so once people moved to doing that, then it made sense for farms to get larger and for profit to increase.

14:10And for farms to get larger, you had to protect animals against being held in more crowded conditions than they traditionally would have been in smaller open farms. The upside of all of this is that we get plentiful white meat, all the stuff that goes into delicious sandwiches and convenient chicken nuggets. The downside is a lot of that comes at the expense of the animals themselves and, as we're about to see, also the farmers who grow them.

14:44Your best bottling plant employs 3 ,300 people. How do you get 3 ,300 people working at peak efficiency? Your best store has reduced waste, water, and energy usage. How do you make every store like your best store? Your best property has every guest raving. How do you make every property like your best property? The answer is Ecolab. Better performance, better outcomes, better impact. Ecolab. Now every location is your best location. For enterprise organizations, managing all your food needs is a tall order. But with EasyCater, you get a single workplace food vendor with the tools and resources to make it easy.

15:25Giving teams across your organization an easy way to order from a huge variety of restaurants, all on one platform. All while consolidating your corporate food spend so you can control costs, streamline billing and payment, and simplify reporting. Easy Cater, your business tool for food. To learn more, visit easycater.com slash podcast. There's another seminal moment in the transformation of America's chicken industry, one that has more to do with where they're grown and by whom. In 1923, a Delaware housewife by the name of Cecile Longsteele, by the way, great name, got a surprise in the mail.

16:07She had ordered 50 baby chicks, but the mailman came to her door with 500 chicks instead. Instead of sending the hundreds of extra chicks back in the mail, Cecile decided to make do. She kept them in a cardboard box and set about building a shed to house them. Over the next five months or so, she raised the chicks to adulthood, fattening them up and eventually selling them to local hotels and restaurants as a delicious meal. Then she decided to do it all over again. Soon she was ordering 1 ,000 chicks, then 10 ,000, and then she just kept going. So what Cecile pioneered is the first broiler house, a big step in the history of poultry farming.

16:45Today, chickens are raised in huge barns that cost large amounts of money to build. And in order to keep these big barns filled with chickens, farmers have to participate in something called the tournament system. In fact, everything about modern chicken is big. In the tournament system, farmers get baby chicks from large chicken breeders. They're called integrators. Companies like Tyson, Purdue, or Pilgrim's Pride. And then they raise them using feed and growth promoters sent to them by those same companies. Eventually, the mature birds are handed back to the chicken company that sold them as babies.

17:18And they fulfill their chicken destiny of becoming sandwiches, nuggets, or other snacks. Basically what we do is we supply the buildings and the labor and all the stuff needed to actually raise birds for these big, what they call integrators or chicken companies like a Tyson or Purdue. Tyson or Purdue actually owns the chicks and they actually own the feed and vaccinations and that sort of thing. Meet Craig Watts. He's a former contract poultry producer who raised chickens in North Carolina as part of the tournament system. We just basically get them on, for lack of better terms, consignment. They're just a few hours old when we get them.

17:58And we raise them up to market age. They give us some guidelines on doing that. And then they come pick them up. And then we get ready and start all over again. It all sounds pretty simple and efficient. And the integrators themselves argue that they're basically taking on the messier, more difficult, and more capital-intensive parts of the chicken business, like hatching chicks, transporting them back and forth to farmers, and then processing them into chicken nuggets and so on. So that's the tournament system. But Craig, Craig calls it something different. Basically what it boils down to is who can get the chicken to the plant the quickest.

18:34Who can get that chicken the fattest on the least amount of feed? Least amount of feed meaning least amount of cost. So, and that sounds perfect. I mean, you figure things out, you grasp concepts, you tweak things, do what you have to do. and if you work smarter and you work harder than the next guy, you're going to get compensated a little more. Perfect, right? The only problem is there's a flaw in this whole tournament system scenario. I call it Thunderdome. It's 10 men enter and 5 men leave because every week if you have 10 growers go out, you're going to have some that make at or above the base pay, which my base pay I think was around$0.05 a pound at that time.

19:14Then you're going to have 5 or so out of the 10 that are at base or below. Right. So they take the bonuses to the five growers that are above average is taken from the pay of the growers that are below average. So for the company, it's a zero sum game. They're only going to have a nickel invested in a pound. The pie, so to speak, is finite. The size of the pie is finite. The farmer is fighting for the slice. So in the tournament system, you're basically graded on a curve. If you're a chicken farmer who does well relative to other growers in the area, you'll get more money from the pot. And the ones who do badly get less money from the same pot.

19:51So you want to be ranked higher relative to other growers. When Craig decided to become a farmer, competing against his fellow chicken growers for pay wasn't quite what he had in mind. In fact, let's go back to how Craig got into the chicken business in the first place, back when he saw a big opportunity when Purdue started building a processing plant just seven miles south of his home. They were looking for farmers to contract with to build buildings to raise their birds. I saw an advertisement in the paper. I called the representative. We had a meeting. He gave me an income and expense kind of pro forma sheet.

20:28It wouldn't get rich quick. I took it to my accountant. He cash flowed it. There again, it was steady, but it wouldn't get rich, but it was enough. And the guy at Farm Credit was excited about the possibility of poultry moving into our area. He told me it was the best thing that might be the best thing that It never happened to farm in Robson County. Things went OK at first. Craig spent his days monitoring his birds, making sure they weren't overheating or getting sick or eating too much or too little, basically following the instructions and the chicken growing rules sent by Purdue. Well, the first thing I would do, I would wake up and I would go and I would open all the houses up and I would just basically stick my head in and look.

21:08and then we had a control room that I monitored things from and I would make sure that the controller was set properly. They call it a computer, but it's basically a glorified thermostat, basically where you can control all the temperature settings, fan settings, that kind of stuff from a central location. So I would look at all that and make sure everything was right. You know, take a sniff test, you know, is the ammonia up? Is it good? You know, is the house too humid? You know, and what do the birds look like? Are they spread out, comfortable? Are they active or are they just huddled up or are they panting?

21:40I mean, it was just a lot of observations initially. I would have to run the kids to school, but then when I'd come back, the next thing I would do, I'd actually physically walk through the houses and I would look for birds that had died or maybe were deformed or just maybe weren't performing as they should. And either I'd pick up the dead or we would have to call out and just a nice word for kill, birds that weren't going to make it the entire six weeks, you know, for whatever reason. But there was a limit to what Craig could do for his flock. After all, the integrators are the ones sending him the baby birds themselves.

22:12They own the chickens, and they're the ones making decisions about what they eat, what medicines they get, what conditions they're kept in, and how much room they have to grow up in. The deal was each of my houses were 20 ,000 square feet. Well, they put 30 ,000 birds in every house. So when those chickens were, they had this same amount of space all the time, But when they got market age, I mean, it was wall to wall, end to end, just a sea of white chickens. So if you do the math, 30 ,000 chickens in 20 ,000 square feet is 0.67 square foot per bird. So there's issues within the structure of the system that I had no control over.

22:52It's not cruel, but it's not about quality of life for an animal by any means. It's about homogenizing a widget and getting it to the plant. These chickens' traits have been selected over the years. What they are, the American's desire for white meat is what drove what we call the franken chicken. The breast is very large. It's oversized compared to the rest of its body. They do have trouble standing, and they're very docile. They're not a hardy breed. I mean, they're bred to just barely stay alive long enough to get to the plant. So what they do is they take a bite of feed, they take a drink of water, they sit down.

23:28I call it three steps and flop. Boom, boom, boom, boom. Sit down. That's what they do all day. In 2008, Craig reached a tipping point. Frustrated by a particularly feeble flock of floppy chickens sent to him. Say that 10 times fast, Joe. Frustrated by a particularly feeble flock of floppy chickens, he filmed the conditions in his own chicken house and uploaded them to YouTube to send to his production manager at Purdue. Soon after, he partnered with a reporter and an animal rights activist to produce an expose on chicken farming. Craig has no control over the health or genetics of the chicks that are delivered to him by Purdue.

24:08Bound by contract, Craig is not even allowed to give them sunshine or fresh air. Just 37 days later, they are a sea of panting birds. Panting indicates birds are overheated. These birds find it too painful to bear the weight of their unnaturally large breasts on their legs. Craig Watts ultimately proved to be something of a renegade. For its part, a Purdue spokeswoman said it works with over 1 ,800 poultry farmers, and the retention rate with those contracts is around 98%. In a statement to OddLots, they also said it's been nearly 10 years since Watts was a farmer for Purdue, and in that time it has established farmer advisory councils to gather important feedback and insights from them on how the company can improve.

24:55But Craig's complaints about the imbalance of power in the poultry industry and the health of the birds are things that come up again and again in our conversations with chicken farmers. For instance, Karen Crutchfield, she goes by Susie, was a contract grower for Tyson for many years, but she started out raising cows. We already had a cattle farm, and so we wanted to kind of expand out and add something else, some more income coming in. The difference in farming cattle and farming chickens is farming cattle, you own all the inputs. You own the cattle, you own the feed, you decide what type of cattle you're going to buy, you decide what time they leave your farm, you decide the breeding periods.