By Peter Whoriskey
The Washington Post
Chicken is the most popular meat in the U.S. and every year Americans spend billions on the wings and breasts and legs.
But here’s a funny thing about what American shoppers pay for all those birds: By decades of tradition, the price for chicken at many grocery stores is based on a single estimate, published weekly, that no one but a few chicken companies can be sure is accurate.
And some are wondering, maybe it wasn’t.
The U.S. Department of Agriculture now has stopped publishing the weekly price estimate — known as the “Georgia Dock.” The Georgia Department of Agriculture bases the price on reports from eight anonymous chicken companies, which are not asked to show receipts or other documentation.
In a statement, a USDA spokesperson said they discontinued publishing the Georgia Dock price “when data from the source report could not be independently verified.”
Any bias in the Georgia Dock would have had huge effects on consumers. The Georgia Dock price is frequently used in contracts between chicken producers and supermarkets and those prices, in turn, could raise or lower what supermarkets charge consumers.
Over the last two years, the Georgia Dock price has drifted significantly apart from other chicken price averages, rising roughly 20 percent out of line with a separate index maintained by the USDA. A deviation of that magnitude could have cost U.S. grocery consumers billions of dollars extra.
Officials at the Georgia Department of Agriculture said they are reviewing their processes for calculating the estimate. But, they said, they are confident in the figures they have provided.
“We trust the companies we work with,” said Alec Asbridge, director of regulatory compliance at Georgia Department of Agriculture. “We don’t see any reason they would submit information that wasn’t truthful.”
Some in the industry dismissed the complaint about the Georgia Dock, saying that it represents a different bird and a different market, and so comparisons to other chicken prices are unfair.
“The Georgia Dock has come to be a trusted reflection of the supply and demand for retail stores,” said Mike Cockrell, the chief financial officer at Sanderson Farms, Inc. The Georgia Dock represent “a different product and a different market with different supply-and-demand fundamentals.”
Asbridge and other officials noted that there are methods of preventing surveyed companies from reporting biased price estimates. If the market price reported by any individual company is significantly out of line with the others, for example, it is dropped from the average.
Regarding the anonymity of the firms surveyed, Georgia officials said state laws prevent them from disclosing the names of the eight companies.
“It seems like an extremely opaque way to determine the price of chicken,” said Thomas Gremillion, director of the Food Policy Institute at the Consumer Federation of American. He noted that the beef, pork and chicken industries have seen less competition in recent years. “When you have market concentration, there’s more opportunities for shenanigans.”
While little-known, the Georgia Dock estimate is influential because so many grocery chains use it in their contracts with chicken companies.
For example, officials at Sanderson Farms, a large chicken producer, said that with all but one of their supermarket customers, the price is based on the Georgia Dock. Tyson Foods said only a small portion of their supermarket contracts is “connected” to the Georgia Dock. Perdue declined to answer questions.
Among supermarkets, Wal-mart and Safeway confirm using the Georgia Dock, among other factors, when negotiating chicken prices.
— Washington Post
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
