“To say that the poultry contract takes the risk out of production is a bunch of baloney.”
“To say that the poultry contract takes the risk out of production is a bunch of baloney.”
Robert Taylor is an Agricultural Economist at Auburn University in Alabama. And he is a tremendously valuable resource for poultry farmers in America. Among the voices in the academic realm of economics, he is one of the few who writes about the practical experience of farmers in poultry contracts, instead of relying on theoretical models or industry approved data.
We stopped in Auburn and had a long chat with Taylor. He explained the more complicated aspects of the contract system to us in economic terms, starting with the rapid increase in concentration. As companies merged and the control of the marketplace rested in fewer and fewer hands, a monopsonistic marketplace evolved. This means that producers in an area now often have only one buyer to sell their chickens to. Without the power of farmer choice, companies gained the power of control over contract terms.
He also gave us a wonderful explanation of tournament payment, a tricky system used to determine the paychecks of contract farmers. We are saving these details for a later update when we can put together a longer film for the explanation – look for that soon!