Tyson Oil Case

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In the year 1911, the United States Supreme court found John D. Rockefeller guilty with regards to a list of crimes including, predatory pricing, monopolization of the oil industry, and abusive action directed at smaller firms. However, though “unmoral”, these policies allowed Standard Oil to control 90% of the oil market in the early 20th century, effectively decreasing the price of oil and lighting the homes of millions of people around the world. How can the reduced price of an important commodity be a bad thing for consumers? This same question is being asked today in 2016, directed upon the agricultural industry. Specifically, should corporations such as Doll and Monsanto be held accountable for monopolizing the world’s food source? The answer to this question is straightforward, if we, the human race, wish to feed the 7.125 …show more content…
By becoming extremely efficient, these companies are able to reduce production costs and sell at lower prices. For example, in the year 2013, the company Tyson Foods sold chicken at an average price of $1.57 per pound, much less than the smaller scale competition. Tyson was able to do this because it was large enough to employ a business model known as vertical integration, resulting in lower production costs. Vertical integration involves performing all steps of production as opposed to simply packaging. For instance, Tyson has its own chicken farmers and processing plants, in addition to their packaging and retail operations. Subsequently, this leads to lower prices of goods for consumers. Moreover, the average profit for individual farmers raising free-range chickens hovers around $4, leading to exponential increases in price in order to match rising production costs. Therefore, the large market share of companies such as Tyson Foods allows for lower production costs and increased food affordability for consumers all over the
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