Ruffled Feathers: The Chicken Cartel in the United States

Abstract

Allegations of price-fixing by U.S. chicken suppliers in violation of Section 1 of the Sherman Act date back more than a half-century. The methods to facilitate this collusion have evolved over time from conference calls arranged by the National Broiler Marketing Association to more sophisticated methods of information sharing. Amid the highest rate of inflation in nearly forty years and persistent supply-chain bottlenecks as the country emerges from the pandemic, the chicken industry has been singled out by government officials for monopolistic pricing behavior. We examine the mechanism through which the “chicken cartel” was formed and sustained and its harmful effects on consumers. The analysis indicates that as early as 2008 a plan was hatched by U.S. chicken suppliers to collude in fixing the price of chicken. According to one complaint, this collusion, in concert with increased market concentration, raised chicken prices by approximately 50 percent. The associated consumer surplus losses are estimated at $8 to $10 billion annually with cumulative losses over the duration of the cartel ranging upward of $100 billion. Numerous indictments have been handed down and settlements reached, both civil and criminal.