Big Chicken in Mississippi Politics

Neil Munro | White House Correspondent

Mississippi Sen. Thad Cochran is relying on the state’s biggest chicken salesman to help him win his fierce winner-take-all primary battle with State Sen. Chris McDaniel.

Joe Sanderson, the primary owner of the nation’s tied-for-third-largest chicken processor, is Cochran’s fundraising chairman, and he’s using his state-wide clout to win funds for Cochran’s campaign.

Chicken moguls have huge influence in southern agricultural states, but they don’t have the cachet of Silicon Valley’s software moguls, and they are rarely feted by the New York Times or Vogue magazine.

There’s a reason for that low status. The business of killing and processing chickens is so tough, horrible and poorly-paid that not even criminals will participate for more than a few days, said Haley Barbour, a former governor, a close ally of Sanderson and an insistent advocate for more immigration.

Working at a slaughterhouse is “nasty, dirty work where every day the [workers] come home covered in blood and guts, veins and feet and feathers,” Barbour said at an immigration-boosting event held by the Bipartisan Policy Center, an D.C-based business advocacy group.

Not even convicts in the state’s work-release program will do the job, Barbour added. “The inmates, they won’t stay two days, they’d rather be in a penitentiary than work in a chicken plant,” he said.

The conditions are so terrible that Americans won’t work in the slaughterhouses, and the companies have to hire illegals, Barbour suggested.

“You go into a chicken-processing plant anywhere in Mississippi, and if you can find somebody on the floor who speaks English, I’ll give you $100,” he said, before making a pitch for a new immigration reform that would allow companies to hire more foreign workers in place of Americans.

Barbour has a long history with Sanderson. As governor, he appointed Sanderson as one of six chairman or vice chairmen of the Governor’s Commission on Recovery, Rebuilding and Renewal, after Hurricane Katrina in 2005.

In Mississippi, they’re now working together for the same cause: re-electing Cochran.

In March, Sanderson — Cochran’s finance chairman — told Politico that Barbour’s Mississippi network had merged with Cochran’s re-election campaign. “I do believe they are virtually the same people,” he said.

His company, Sanderson Farms, is one of the major employers in the state, and he has a huge influence on local politicians and his myriad subcontractors throughout the state. He’s got 11,000 employees and 800 chicken growers in Mississippi, Texas and other states, who produce up to 9.4 million chickens per week. He’s also influential in the non-chicken business community, and funds a PGA tournament in the state.

Sanderson is also a GOP donor. In 2014, for example, he distributed more than $32,000 to GOP causes, plus another $5,000 to his industry’s lobbying group, the National Chicken Council. In 2011 and 2012, he donated $193,700.

The poultry and egg industry gave the GOP more than $425,000 in 2013 and 2014, but less than $50,000 to Democratic candidates.

In 2014, so far, Cochran has received $8,000 from the industry, and much more in previous years.

In Washington, Sanderson and Barbour are also working for the same cause — higher levels of immigration.

Sanderson’s main lobbyist — former Mississippi GOP Sen. Trent Lott — works Capitol Hill to get more immigrant workers, while his friend Barbour is working through the Bipartisan Policy Center.

In the last three months of 2013, for example, Sanderson paid $80,000 to Lott and two other lobbyists at Patton Boggs to lobby on various issues, including health inspections and rules that curb the hiring of illegal immigrants.

Lott, a former Mississippi GOP senator who served as Senate majority leader from 1996 to 2001, did not respond to TheDC’s request for comments.

Barbour plays a more public role, typically, by rallying home-district business interests to pressure legislators for more immigration.

“Agriculture in America has a huge dependency on immigrant labor,” Barbour said at the Bipartisan Policy Center last June.

“Mississippi is a substantial agricultural state. Believe it or not, the No. 1 commodity is not cotton, it’s chickens,” he said.

“We process $2.5 billion dollars worth of poultry,” he said.

Congressmen “have huge constituencies who are dependent on this [migrant] labor force,” Barbour told the attendees. “And they’re going to have those constituents say to them, ‘Congressman, please vote for immigration reform so that we don’t have to have people here illegally, so that we can get labor that’s here legally.'”

That message has impacted numerous GOP legislators, including Virginia Rep. Bob Goodlatte, the chairman of the House Judiciary Committee.

Mike Cockrell, the chief financial officer at Sanderson Farms, declined to comment on Sanderson’s role in the campaign, or on the company’s operations.

Barbour is also working for Facebook billionaire Mark Zuckerberg, as a leader of “Americans for a Conservative Direction.” Like Sanderson, Zuckerberg is using his influence and money to increase the supply of available workers for his software plants.

Barbour declined to talk with The Daily Caller, after TheDC asked him to comment on Sanderson Farms’s impact on Mississippians, and about whether American workers would gain from an increased inflow of foreign labor.

“Haley told me he really doesn’t have much insight into the questions you have outlined below, so he’ll decline,” said an email from Loren Monroe, a spokesman for Barbour’s lobbying firm, BGR Group.

But Chris McDaniel is using Barbour to slam Cochran.

The push for increased immigration “is a form of crony capitalism, and Haley Barbour is dead wrong about this — and by extension Sen. Cochran is dead wrong about this,” McDaniel told Breitbart. “That’s why you see a number of those individuals [both left-wing and right-wing special interests] who normally don’t share much in common reaching across the aisle” to increase immigration, he said.

“Thad Cochran voted not to fund the border fence to stem the tide of cheap labor driving Mississippians out of work and driving down wages in Mississippi,” said an April 28 statement from McDaniel’s office. “While Thad Cochran has been soft on immigration, I will vote to fund the construction of the border fence and fight to put Americans back to work again.”

“I think it’s time for us to focus on the America worker for a change… What we’ve seen over the last many years is wage stagnation… we’ve even seen shrinking workforce participation,” McDaniel said on Laura Ingraham’s radio show.

NumbersUSA, an advocacy group that wants to reform and reduce immigration, gives Cochran a mixed grade, partly because he voted numerous times to increase and to reduce the inflow of foreign workers.

In late June, Cochran touted his opposition to the Senate bill, saying it would not do enough to block the inflow of illegal immigrants.

But he also suggested that the bill didn’t do enough to help employers hire foreign workers. “The bill the Senate approved does not contain important reforms related to agriculture worker programs, and it does not fully reform the system employers use to verify the legal status of workers before hiring them,” he said in a statement.

Cochran’s office declined an interview request, but sent a one-line statement to TheDC. “Thad Cochran has a consistent record of voting against amnesty and strongly supports enforcing our immigration laws.”

Sanderson’s company is little different from the other big slaughterhouse companies — Tyson Foods, Pilgrim’s Pride and Perdue.

It’s a business where the meat companies cut costs to the bone by trimming wages for slaughterhouse workers and by slashing payments to the farmers who grow chickens in tough, no-escape contracts.

Sanderson’s tough business isn’t nearly as lucrative as the software industry. He owns only about five percent of the company’s stock, which is worth $1.9 billion, and gets paid roughly $2.8 million per year. By the Mammon-like standards of Silicon Valley, his pay is chicken feed.

He works hard to keep the company profitable. “Joe F. Sanderson, he’ll look out for his company’s best interest, no doubt about that,” said one farmer who grows chicken for his slaughterhouses.

One way that he helps his company is by keeping wages at a minimum.

The chicken industry has “been relentlessly pushing down wages for people who work in the slaughterhouses for decades,” partly because government-subsidized labor is still cheaper than machines, said Chris Leonard, author of “The Meat Racket.” “The cheap labor is what makes the whole thing work” for the meat industry’s investors, he said.

In southwestern Mississippi, the slaughterhouse workers are paid $10.62 an hour, or $22,080 a year, according to the Bureau of Labor Statistics. State-wide, the formal unemployment rate is 7.6 percent.

But the companies supplement their employees’ wages with federal aid, such as the Earned Income Tax Credit and food stamps, said one local chicken grower who refused to talk on the record. “Companies love [the aid]… if Republicans wonder why people don’t vote for them, it’s because they know where [the money] comes from,” he said. The GOP would earn more votes if it made companies pay the full cost of its workers, he laughed.

The government subsidies for cheap labor also reduces the companies’ incentive to invest in labor-saving chicken-processing gear. Outside the United States, in Europe and Japan, companies are training and hiring engineers to develop and sell robotic chicken-processing gear, instead of hiring more low-wage laborers to slice chickens by hand.

As long as Sanderson can hire replacement foreign workers as they come over the border, he’s under less pressure to raise wages or buy chicken-slicing machinery.

“A lot of them are there like that,” but many workers are Americans, said one grower who has visited the Sanderson slaughterhouses, and met the illegals working alongside Americans.

Barbour’s offer of a $100 for finding an English-speaker in the slaughter houses exaggerates the number of illegals in the various companies’ slaughterhouses, said Lawrence Abernathy, a lawyer in Laurel, Miss., home base for Sanderson Farms. “I would take the bet from Haley Barbour [because the workers] speak fine English,” he said.

The company’s spring 2013 publication, Sanderson Farms News, includes comments from Americans working on the line. When asked what they enjoy most about their job, the Americans responded: “My vacation … My co-workers. I thank God for my job … Getting paid every Friday … My supervisor … Learning something new everyday … It’s a great job. There is an opportunity to move up if you choose to.”

Eight of the 11 slaughter-line workers shown in the newsletter at African-Americans. Three are Hispanic.

Conditions for Americans at the slaughterhouses get little media coverage, partly because university-trained journalists pay little attention to blue-collar concerns. Instead, much coverage about the industry focuses on hygiene, pollution, fights over water and the plight of legal and illegal immigrants. That’s a shift from the early 1900s, when “muckraker” journalists exposed cruel treatment of the workers in slaughterhouses and canneries.

Sanderson’s cost-cutting efforts have paid off spectacularly for Wall Street investors and their university-class customers. The company’s stock price has risen from $10 in 2003 up to $82 in 2014 — boosting Joe Sanderson’s share to around $60 million — and delivering roughly $1 billion to investors.

Sanderson also cuts his costs by tightly controlling the supposedly independent growers who grow his chickens. The growers periodically fight to win a better deal, but the companies usually win battles.

Sanderson won big victories in 2011 and in 1996 when he and other chicken moguls quashed reforms intended to help chicken farmers get a better deal from chicken processors.

Growers want the proposed reforms because they have no power against the chicken processors, say farms and their advocates.

Since the 1960s, most growers are bound into the “vertically integrated” system. The growers agree to raise chickens for a company, and the company helps them get federally guaranteed loans to build new, efficient chicken-houses, costing roughly $2 million.

When the houses are ready, the processors give the growers a shipment of young chickens and feed plus instructions on how to raise the chickens. “They tell you everything about how to grow that chicken — you have no leeway whatsoever,” said one grower who works for Sanderson. The growers are paid for adding meat to the chickens, usually at a rate of just over four cents per pound.

The process has made chicken cheaper, safer and more plentiful.

In the 1920s, a farmer needed 112 days to grow a two-and-a-half pound chicken, while using almost five pounds of feed.

Now, the growers use high-tech chicken houses and carefully designed feed to grow chicklets into nine-pound chickens, in only 60 days. The processed, distributed and roasted chickens cost consumers only $7 in Fairfax County, Va., and $7 in Hamilton, Ohio.

Per-capita consumption of chicken has risen from 38 pounds in 1965, to 84 pounds in 2013, according to the National Chicken Council.

“The system has worked well for decades and has kept tens of thousands of families on small farms who otherwise would have had to get out of agriculture altogether,” the council says. “Most companies have waiting lists of people who want to become growers and lists of existing farmers who want to add capacity by building more growout houses.”

But the system binds growers to a single a large company, stifles competition and transfers much wealth — largely via stock prices — from poor rural families to higher-income professionals, say critics.

“We saw a wave of mergers in the poultry industry in the 1970s, 1980 and 1990s… [and growers] lost choice about who to do business with,” said Leonard, the author of “The Meat Racket,” and a writer at the D.C.-based New America Foundation. The top four processors control about 55 percent of the centralized market, so growers have little chance of switching companies.

This means the processors have enormous power over the growers, the growers complain. For example, some processors force growers to compete with each other, by promising higher payments to the more productive growers and lower payments to the less productive growers. Periodically, processors also instruct their growers to borrow more money to upgrade their chicken houses.

Processors can also punish growers who perform poorly or who complain publicly. For example, growers say they can be given substandard chickens or poor feed if they refuse to upgrade their chicken houses with expensive new equipment.

“You’re going to have a hard time talking to current chicken farmers [because] they’re scared of retaliation,” said J. Dudley Butler, a Mississippi lawyer who helped push through some federal regulations in 2009 and 2010, while working as an official in the Department of Agriculture.

“If you get into it, and don’t part your hair just right, they can force you out of the chicken business and there’s nothing you can do about it,” said Roy Fortenberry, a former chicken grower in Pinola, Miss. “You’re a sharecropper as long as they got you in debt.”

“Contract farming is another word for feudalism — it take a proud farmer and make an assembly line worker out of him,” said Fred Stokes, a retired signals-intelligence expert and a cattle producer. He live in Porterville, Miss., and is a director of the Organization for Competitive Markets.

Fortenberry said he got out of the business by quickly paying down his debt before the company forced him to buy new chicken houses. A friend of his escaped the business when Katrina destroyed his chicken houses and his insurance company paid off his debts, Fortenbery said. “The Good Lord helped him — that’s about the only way you can get out if you’re in debt,” he said.

The local banks don’t care if growers’ debts go bad, said one chicken grower who refused to be identified, because their losses are insured by the federal government. “Within two miles of here, one, two, three, four, five farms went under, and the government came in” to cover the banks’ losses, he said.

“If you have 40 acres, a bank will loan you enough money to build six chicken houses … for several million dollars,” said Abernathy.

The federal guarantee ensures processors get free investment, the taxpayers get the bill, and the growers get the shaft, said the Sanderson grower. “No one cares,” he said, adding that system is a rural version of the government-fueled real-estate bubble in the 2000s.

In 1996, Mississippi growers persuaded state legislators to pass a reform bill, but it was vetoed by GOP Gov. Kirk Fordice after the chicken industry intervened. After the veto, Fordice arranged talks that won some concessions for growers, including a promise by Sanderson to sign stable, 15-year contracts with growers.

In 2009 and 2010, the Department of Agriculture proposed regulations that would have curbed the processors’ power over the growers, but those regulations were opposed by many rural Democratic and GOP legislators, and were effectively killed after the GOP took the House in 2010.

“It was a classic fight between people who want to keep the system we have not — the industrialized agricultural system — versus people who wanted to level the playing field” between buyers and sellers, said Butler.

A few improvements got through, including the removal of the much-hated arbitration clauses in company contracts. “That’s good,” said a Sanderson grower. “That lets you have you day in court, with a jury of your peers.”

But more should be done to level the playing field, Butler said. A fair market would encourage more people to become growers, and improve communities, he said.

The U.S. Department of Agriculture has curbed construction loans to new growers who don’t have contracts lasting at least three years. But the department should demand 10-year contracts before guaranteeing loans, Butler said.

Cochran played a mixed role in the many fights between the state’s growers and Sanderson’s chicken industry.

He didn’t visibly help the farmers in their 1996 fight in the state house, said growers. At first, “we thought Cochran was on our side,” said Fortenberry. “You think they’re on our side, but they did go in the room and go out … [and] you couldn’t tell from our side where he did or didn’t” try to help the growers, he said.

But Cochran didn’t give the chicken industry all it wanted in the federal fights. He was the senior GOP senator on the agriculture committee, and the industry persuaded Congress to block any spending needed to carry out the reform regulations in 2011. But Cochran was one of the four top legislators who collectively refused to include permanent anti-reform language in the five-year farm bill signed in February 2014.

McDaniel doesn’t have much of a record on this issue, but his press secretary did release a generic statement supporting the growers. “Poultry growers are vital for Mississippi’s economy and to feeding Americans… [I will] fight to put Americans back to work again by helping contract farmers who are in the poultry houses every day.”

The Mississippi growers and activists don’t expect much change. The meat companies are too powerful in too many states, and have too many friends in Congress, they say.

But without a change, rural communities will be made subservient to the companies, they say. “I don’t believe in [marketplace] guarantees, but I think the game ought to be fair,” said Stokes, the retired cattle producer. “Contract agriculture is replacing independent family agriculture and rural America is dying.”

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