Tyson Moves to Increase Lion’s Share of Market Control
Purchase of Keystone Foods gives Tyson unparalleled market; leaves growers feeling uneasy.
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PITTSBORO, N.C., August 29, 2018 — According to Bloomberg, Tyson Foods closed a deal to purchase Keystone Foods LLC from Marfrig Global Foods SA for a reported $2.16 billion. Tyson, along with three other companies (Pilgrim’s Pride, Sanderson Farms, and Perdue Farms), currently controls more than half of the U.S. poultry industry. With this purchase, Tyson will now have a larger global reach as Keystone Foods is a main supplier of chicken nuggets to McDonald’s Corp. The sale includes processing facilities and innovation centers in Alabama, Georgia, Kentucky, North Carolina, Wisconsin, and Pennsylvania as well as international innovation centers in China, Thailand, South Korea, Malaysia, and Australia. Therefore, the purchase of Keystone poses a significant threat of further consolidation within the already highly vertically integrated poultry industry.
“The acquisition of Keystone Foods by Tyson is yet another example of the consolidation and concentration taking place in the food service industry, which should concern every American. Not only does this place the security of our food supply in the hands of a few companies, this consolidation also has the effect of taking a larger percentage of the food dollar away from our family farmers and contributes to an ever worsening farm crisis.
America should be very concerned about the rapidly disappearing family farmer who are stewards of the land and food which feeds American families, as opposed to corporations which care only about making money to line their own pockets.” – Mike Weaver, contract poultry farmer & President of the Contract Poultry Growers Association of the Virginias
“Tyson gobbles up another property on the Monopoly board.” – Anonymous contract poultry farmer
RAFI is also concerned due to apparent overlap and competition issues related to Keystone broiler complexes being located too close to Tyson facilities. Keystone Foods operates broiler complexes in Eufaula, Alabama, Camilla, Georgia and Albany, Kentucky with other operations in Huntsville and Gadsden, Alabama and Reidsville, North Carolina.
In Alabama, Tyson has processing facilities in Albertville, feed and hatchery operations in Albertville and Blountsville, and other hatcheries, grow out facilities, etc. located across the state. In Georgia, Tyson operates plants in Buena Vista, Cumming, Dawson, and Vienna along with various feed mills and hatchery facilities. Tyson also has processing/freezing plants and at least two hatch/feed complexes in Kentucky as well as complex facilities in Harmony, Monroe, Sanford, and Wilkesboro, North Carolina.
Tyson’s purchase of Keystone Foods marks another example of the dangerous amount of consolidation within agribusiness. Mergers of this kind lead to the creation of monopsonies and unbalanced market power between farmers & agribusiness firms and consumers & food suppliers. Only proper government regulation can stem this tide of consolidation and even the playing field in our food system. This is an issue with wide-reaching implications and effects well beyond the contract poultry industry, reaching into every American’s home and onto their dinner plate. We urge our elected representatives in federal and state government to stand up to these firms and protect American families from power hungry firms like Tyson Foods.
We call upon the Department of Justice to preemptively extend the review period for this merger under Hart-Scott-Rodino Antitrust Improvement Act to allow sufficient time to examine issues of competition and antitrust violations. Additionally, it is the opinion of RAFI-USA that the purchase of Keystone Foods LLC by Tyson Foods would dramatically reduce competition within the live poultry production market, negatively impact the financial wellbeing of contract poultry farmers and rural communities, and therefore should be blocked by the Department of Justice.
To learn more about RAFI’s Contract Agriculture Reform Program, visit www.rafiusa.org/programs/contract-agriculture-reform
About the Rural Advancement Foundation International-USA
The Rural Advancement Foundation International-USA mission is to cultivate markets, policies and communities that sustain thriving, socially just, and environmentally sound family farms. RAFI-USA works nationally and internationally, focusing on North Carolina and the southeastern United States. RAFI-USA is a 501(c)(3) nonprofit organization based in Pittsboro, North Carolina and incorporated in 1990.
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